front 1 Environmental scanning is the monitoring, evaluating, and disseminating of information from the external environment to key people within the corporation. | back 1 TRUE |
front 2 A corporation uses environmental scanning to avoid strategic surprise. | back 2 TRUE |
front 3 Political-legal forces regulate the values, mores, and customs of society. | back 3 FALSE |
front 4 The societal environment includes the economic, technological, political-legal, and sociocultural forces. | back 4 TRUE |
front 5 Industry analysis was popularized by Michael Porter. | back 5 TRUE |
front 6 In dynamic environments, the CEO's focus is on forces in the societal environment. | back 6 FALSE |
front 7 Today's organizations must scan the natural environment for factors that might previously have been taken for granted. | back 7 TRUE |
front 8 The transferring of profits from a foreign subsidiary to a corporation's headquarters is known as repatriation of profits. | back 8 TRUE |
front 9 An example of an economic variable in the societal environment is interest rates. | back 9 TRUE |
front 10 The growing health consciousness is an example of a political-legal force. | back 10 FALSE |
front 11 One of the demographic variables in the societal environment is the changing household composition. | back 11 TRUE |
front 12 One of the breakthrough developments in technology is the portable information device and electronic networking. | back 12 TRUE |
front 13 A multinational corporation is a company with significant assets and activities in multiple countries. | back 13 TRUE |
front 14 The origin of competitive advantage lies in the ability to identify and respond to environmental change well in advance of competition. | back 14 TRUE |
front 15 Strategic myopia is the willingness to reject unfamiliar as well as negative information. | back 15 TRUE |
front 16 Booz & Company found that companies that are most successful at avoiding surprises had a well-defined system that integrated planning, budgeting, and business reviews. | back 16 TRUE |
front 17 An industry is a group of firms producing a similar product or service. | back 17 TRUE |
front 18 According to Michael Porter, the weaker each of the competitive forces, the more limited companies are in their ability to raise prices and earn greater profits. | back 18 FALSE |
front 19 According to Michael Porter, a high force can be regarded as a threat because it is likely to reduce profits. | back 19 TRUE |
front 20 An entry barrier is an obstruction that makes it difficult for a company to enter an industry. | back 20 TRUE |
front 21 One of the possible barriers to entry is product differentiation. | back 21 TRUE |
front 22 The need to invest huge financial resources in manufacturing facilities in order to produce large commercial airplanes creates a significant barrier to entry to any competitor for Boeing and Airbus. | back 22 TRUE |
front 23 Governments can do little to erect barriers to entry in an industry. | back 23 FALSE |
front 24 NutraSweet can serve as a product substitute for sugar satisfying the same need. | back 24 TRUE |
front 25 A buyer may be powerful when changing suppliers costs a great deal. | back 25 FALSE |
front 26 A fragmented industry is dominated by a few large firms, each of which struggles to differentiate its products from the competition. | back 26 FALSE |
front 27 Multidomestic industries are specific to each country or group of countries. | back 27 TRUE |
front 28 The only factor used to determine whether an industry will be primarily multidomestic or primarily global is the pressure for local responsiveness. | back 28 FALSE |
front 29 McDonald's and Olive Garden are in the same strategic group. | back 29 FALSE |
front 30 According to Miles and Snow, reactors are companies with a limited product line that focus on improving the efficiency of their existing operations. | back 30 FALSE |
front 31 In hyper-competitive industries, competitive advantage comes from an up-to-date knowledge of environmental trends and competitive activity coupled with a willingness to risk a current advantage for a possible new advantage. | back 31 TRUE |
front 32 Key success factors seldom vary from industry to industry. | back 32 FALSE |
front 33 An industry matrix summarizes the key success factors within a particular industry. | back 33 TRUE |
front 34 Competitive intelligence is a formal program of gathering information on a company's competitors. | back 34 TRUE |
front 35 Business intelligence is one of the fastest growing fields within strategic management. | back 35 TRUE |
front 36 A.C. Nielsen is an example of an outside organization providing a firm with competitive intelligence. | back 36 TRUE |
front 37 To combat the increasing theft of company secrets, the U.S. government passed the Economic Espionage Act in 1996. | back 37 TRUE |
front 38 Faulty underlying assumptions are the most frequent cause of forecasting errors. | back 38 TRUE |
front 39 Extrapolation rests on the assumption that the world is relatively dynamic and changes quickly in the short run. | back 39 FALSE |
front 40 Statistical modeling is a quantitative forecasting technique that attempts to discover causal or at least explanatory factors that link two or more time series together. | back 40 TRUE |
front 41 An industry scenario is a forecasted description of a particular industry's likely future. It is developed by analyzing the probable impact of future societal forces on key groups in a particular industry. | back 41 TRUE |
front 42 The combination of the degree of complexity and the degree of change existing in an organization's external environment is/are called A) strategic factors. B) strategic issues. C) environmental uncertainty. D) strategic fit. E) scenarios. | back 42 Answer: C |
front 43 According to the text, one reason environmental uncertainty is a threat to strategic managers is because A) it is a costly and time-consuming process. B) it creates a new playing field in which creativity and innovation can play a major part in strategic decisions. C) it forces the strategic manager to be more stable. D) it hampers their ability to develop long-range plans. E) there are too many uncontrollable variables. | back 43 Answer: D |
front 44 Which of the following is NOT descriptive of external environmental scanning? A) used as a tool to ensure a corporation's long-term health B) used to monitor, evaluate, and disseminate information relevant to the organizational development of strategy C) used to identify major stockholders D) used as a tool for corporations to avoid strategic surprise E) used to determine a firm's competitive advantage | back 44 Answer: C |
front 45 The corporation's task environment A) encompasses the physical working areas of the organization. B) includes those elements or groups within an organization's industry. C) is an advisory committee to top management. D) is an accounting of the many jobs within an organization. E) is the job requirement specification listing necessary skills and abilities. | back 45 Answer: B |
front 46 Which of the following is NOT an element of the organization's task environment? A) local communities B) trade associations C) governments D) technological developments E) special interest groups | back 46 Answer: D |
front 47 Which environment was generally perceived by business people to be something to exploit, not conserve until the twentieth century? A) the task environment B) the natural environment C) the internal environment D) the societal environment E) the external environment | back 47 Answer: B |
front 48 Which of the following is NOT a major force in the societal environment? A) political-legal forces B) labor forces C) economic forces D) technological forces E) sociocultural forces | back 48 Answer: B |
front 49 All of the following are technological breakthroughs already having a significant impact on many industries EXCEPT A) growing health consciousness. B) alternative energy sources. C) genetically altered organisms. D) smart, mobile robots. E) virtual personal assistants. | back 49 Answer: A |
front 50 Which societal force includes demographic trends? A) political-legal forces B) labor forces C) economic forces D) technological forces E) sociocultural forces | back 50 Answer: E |
front 51 Which of the following is NOT one of the eight current sociocultural trends mentioned in the text? A) increasing environmental awareness B) growth of the seniors market C) decline of the mass market D) increasing food consumption E) impact of Generation Y boomlet | back 51 Answer: D |
front 52 Which is the largest of the current U.S. generations? A) Baby Boomers B) Woofies C) Silent Generation D) Gen X E) Gen Y | back 52 Answer: A |
front 53 A company with significant assets and activities in multiple countries is known as a(n) A) multinational corporation. B) repatriated corporation. C) transferable corporation. D) duplicate corporation. E) emancipated corporation. | back 53 Answer: A |
front 54 When strategic managers have a willingness to reject unfamiliar as well as negative information it is referred to as A) strategic paralysis. B) corporate inertia. C) management indifference. D) strategic myopia. E) corporate apathy. | back 54 Answer: D |
front 55 The origin of competitive advantage lies in the ability to A) gain major stockholders. B) identify and respond to environmental change well in advance of competition. C) launch products quickly. D) serve customers faster. E) create surprise for others. | back 55 Answer: B |
front 56 According to Porter, seeing clothing firms such as Under Armour enter the athletic shoe industry would reflect a
| back 56 Answer: A |
front 57 Industry analysis is primarily concerned with a corporation's A) societal environment. B) task environment. C) sociocultural environment. D) economic environment. E) internal environment. | back 57 Answer: B |
front 58 According to Porter, the corporation is most concerned with A) the intensity of competition within its industry. B) the aggregate level of demand for a product line. C) a market's position on its life cycle. D) the amount of pressure from the societal environment. E) the level of government action in an industry. | back 58 Answer: A |
front 59 In addition to Porter's Five Forces, another force added in the text is A) bargaining power of unions. B) other stakeholders. C) threat of prospects. D) threat of shareholders. E) bargaining strength of employees. | back 59 Answer: B |
front 60 According to Porter, the collective strength of the interaction of potential entrants, buyers, substitutes, suppliers, firm rivalry, and other stakeholders determine A) the level of government action in an industry. B) the probable industry attractiveness and business strength position. C) the ultimate profit potential in the industry measured in terms of long-run return on invested capital. D) the aggregate level of demand for a product line. E) the amount of pressure from the societal environment. | back 60 Answer: C |
front 61 According to Porter's model, a strong or high force is likely to reduce profits and can be regarded as a(n) A) benefit. B) opportunity. C) advantage. D) threat. E) risk. | back 61 Answer: D |
front 62 According to Porter's model, a low force can enable the company to earn greater profits and can be regarded as a(n) A) benefit. B) opportunity. C) advantage. D) threat. E) risk. | back 62 Answer: B |
front 63 Which of the following is NOT descriptive of the "threat of new entrants"? A) depends on the presence of entry barriers B) have a desire to gain market share C) depends on the reaction of existing competitors D) does not impact industry attractiveness E) brings new capacity and substantial resources | back 63 Answer: D |
front 64 Which barrier to entry do corporations such as P&G use to force new entrants to spend heavily to overcome existing customer loyalty? A) rivalry among existing firms B) switching costs C) capital requirements D) product differentiation E) access to distribution channels | back 64 Answer: D |
front 65 Which barrier to entry uses cost advantages associated with large size? A) rivalry among existing firms B) switching costs C) cost disadvantages independent of size D) capital requirements E) economies of scale | back 65 Answer: E |
front 66 Which barrier to entry is demonstrated by Microsoft's MS-DOS operating system? A) government policy B) access to distribution channels C) cost disadvantages independent of size D) capital requirements E) economies of scale | back 66 Answer: C |
front 67 Intel was able to gain a significant cost advantage over its competitors in the production and sale of microprocessors because of A) capital requirements. B) product differentiation. C) switching costs. D) economies of scale. E) access to distribution. | back 67 Answer: D |
front 68 Which of the following is NOT descriptive of intense rivalry among firms? A) slow industry growth B) high fixed costs C) high exit barriers D) few competitors or competitors that are roughly equal in size and power E) product offerings that are highly differentiated | back 68 Answer: E |
front 69 Which of the following is NOT descriptive of the threat of substitute products or services? A) Substitute products appear to be different, but satisfy the same need as another product. B) If the cost of switching is low, substitutes may have a strong effect on an industry. C) Identifying substitutes is relatively easy since they look similar. D) Possible substitute products or services may not appear to be easily substitutable. E) Substitutes limit the potential returns of an industry. | back 69 Answer: C |
front 70 A sugar company that is worried that consumers may buy artificial sweetener instead of sugar is concerned about the A) threat of new entrants. B) rivalry among existing firms. C) threat of substitute products. D) bargaining power of suppliers. E) bargaining power of buyers. | back 70 Answer: C |
front 71 Which of the following is NOT descriptive of a high level of bargaining powers of buyers? A) Changing suppliers costs very little. B) Alternative suppliers are plentiful because of standardization of the product. C) The purchased product represents a high percentage of buyer's costs. D) The buyer buys a large proportion of the seller's product or service. E) A buyer earns high profits and is very insensitive to costs and service differences. | back 71 Answer: E |
front 72 When General Motors considers making its own automotive parts, Delphi Automotive Supply Company would be concerned with the A) bargaining power of suppliers. B) bargaining power of buyers. C) rivalry among existing competitors. D) threat of substitutes. E) threat of new entrants. | back 72 Answer: B |
front 73 Which of the following is NOT descriptive of a high level of bargaining power of suppliers? A) Substitutes are readily available. B) The product or service is unique. C) The supplier industry is dominated by a few companies, but sells too many. D) The purchasing industry buys only a small portion of the supplier group's goods and services. E) Suppliers are able to integrate forward and compete directly with their present customers. | back 73 Answer: A |
front 74 Other software companies could not compete with Microsoft based on the hesitation of consumers to try a new software. Which of Porter's forces does this reflect? A) exit barriers B) bargaining power of buyers C) threat of substitutes D) bargaining power of suppliers E) rivalry among existing firms | back 74 Answer: D |
front 75 A company or an industry whose product works well with a firm's product and without which the product would lose much of its value is considered to be a(n) A) complementor. B) oligopoly. C) strategic group. D) industry leader. E) staggered company. | back 75 Answer: A |
front 76 A relationship that illustrates the term "complementor" is A) Microsoft and Intel. B) General Motors and Ford. C) Hewlett Packard and Compaq. D) Gateway and Dell. E) America Online and CompuServe. | back 76 Answer: A |
front 77 The strength of each of the six driving forces of industry competition varies according to the A) effectiveness of the strategic planning. B) stage of industry evolution. C) capital requirements. D) changes in the political environment. E) amount of government regulation. | back 77 Answer: B |
front 78 In a fragmented industry A) no firm has large market share. B) prices drop as new competitors enter the market. C) economies of scale are used to reduce costs. D) companies integrate to further reduce costs. E) all of the above | back 78 Answer: E |
front 79 The U.S. major home appliance industry is an example of an industry A) that has evolved from an oligopoly to a monopoly. B) in which each company maintained a distinct product line. C) that was once fragmented, but now is consolidated. D) that has experienced consistent, increasing sales. E) experiencing a successful strategy of product specialization because of product differentiation. | back 79 Answer: C |
front 80 An industry dominated by a few large firms, all of which struggle with product differentiation, is known as A) multidomestic. B) consolidated. C) global. D) indigenous. E) worldwide. | back 80 Answer: B |
front 81 In which type of international industry do corporations tailor their products to the specific needs of consumers in a particular country? A) consortium industry B) global industry C) indigenous industry D) multidomestic industry E) worldwide industry | back 81 Answer: D |
front 82 Which type of international industry manufactures and sells the same products with only minor adjustments made for individual countries around the world? A) consortium industry B) global industry C) indigenous industry D) multidomestic industry E) worldwide industry | back 82 Answer: B |
front 83 Which of the following is an example of a global industry? A) retailing B) banking C) tires D) insurance E) health care | back 83 Answer: C |
front 84 The two factors that tend to determine whether an industry will be primarily multidomestic or primarily global are (1) the pressure for coordination within the MNCs operating in that industry and (2) A) the pressure for local responsiveness on the part of individual country markets. B) the power of the local country governments to restrict MNC actions. C) the need for brand management in the various MNCs operating within that industry. D) the importance of differentiating with integrating mechanisms in regional cooperatives. E) the likelihood of terrorist activity impacting that industry. | back 84 Answer: A |
front 85 When the pressure for coordination is strong and the pressure for local responsiveness is weak for multinational corporations within a particular industry, the industry will tend to become A) global. B) consolidated. C) multidomestic. D) risky. E) indigenous. | back 85 Answer: A |
front 86 When the pressure for local responsiveness is strong and the pressure for coordination is weak for multinational corporations in an industry, the industry will tend to become A) global. B) consolidated. C) multidomestic. D) risky. E) indigenous. | back 86 Answer: C |
front 87 What is a set of business units or firms that "pursue similar strategies with similar resources"? A) strategic group B) collective collaboration C) cooperative D) integral association E) strategic assembly | back 87 Answer: A |
front 88 Which of the following is NOT one of the general strategic types according to Miles and Snow? A) initiators B) reactors C) analyzers D) prospectors E) defenders | back 88 Answer: A |
front 89 According to Miles and Snow, which strategic orientation is demonstrated by companies that have a limited product line and focuses on improving the efficiency of their existing operations? A) initiators B) reactors C) analyzers D) prospectors E) defenders | back 89 Answer: E |
front 90 According to Miles and Snow, a company that operates in at least two different product-market areas in which one product is stable and the other one is variable, reflects which strategic orientation? A) initiators B) reactors C) analyzers D) prospectors E) defenders | back 90 Answer: C |
front 91 According to Miles and Snow, companies with fairly broad product lines that focus on product innovations and market opportunities such as Frito-Lay, reflect which strategic orientation? A) initiators B) reactors C) analyzers D) prospectors E) defenders | back 91 Answer: D |
front 92 According to Miles and Snow, most major U.S. airlines have reflected which strategic orientation? A) initiators B) reactors C) analyzers D) prospectors E) defenders | back 92 Answer: B |
front 93 To succeed in a hypercompetitive industry, companies must be willing to A) cut prices below marginal costs. B) pursue market share instead of profits. C) operate in the ethical gray zone. D) cannibalize their own successful product lines. E) reduce spending on research and development. | back 93 Answer: D |
front 94 A table which summarizes the key success factors within a particular industry is called a(n) A) EFAS Table. B) IFAS Table. C) SFAS Table. D) TOWS Matrix. E) industry matrix. | back 94 Answer: E |
front 95 Those variables that can affect significantly the overall competitive positions of companies within any particular industry are known as A) external strategic factors. B) internal strategic factors. C) matrix factors. D) key success factors. E) industry scenario. | back 95 Answer: D |
front 96 A formal program of gathering information on a company's competitors is referred to as A) statistical modeling. B) competitive intelligence. C) competitive strategy. D) quantitative forecasting. E) qualitative matrix. | back 96 Answer: B |
front 97 Which of the following is true in regards to competitive intelligence? A) The Economic Espionage Act makes it illegal to steal any material that a business has taken "reasonable efforts" to keep secret. B) The Society of Competitive Intelligence Professionals urges strategists to stay within the law and to act ethically when searching for information. C) The Society of Competitive Intelligence Professionals states that illegal activities are foolish because the vast majority of worthwhile competitive intelligence is available publicly via annual reports, websites, and libraries. D) A number of firms hire consultants with questionable reputations who do what is necessary to get information when the selected methods do not meet SPIC ethical standards or are illegal. E) all of the above | back 97 Answer: E |
front 98 The primary activity of a competitive intelligence unit is to A) monitor competitors. B) engage in corporate espionage. C) survey stakeholders. D) determine industry R&D statistics. E) reverse engineer competitors' products. | back 98 Answer: A |
front 99 A study of nearly 500 of the world's largest corporations indicated which of the following to be the most widely practiced form of forecasting? A) statistical modeling B) scenario-writing C) delphi technique D) brainstorming E) trend extrapolation | back 99 Answer: E |
front 100 Over ________ of large companies use trend extrapolation for forecasting. A) 20% B) 30% C) 40% D) 50% E) 70% | back 100 Answer: E |
front 101 Trend extrapolation is A) the process of converting intuition and hunches into reality. B) the extension of present trends into the future. C) the process of asking some authorities in the area to make an "informed guess" about the future. D) given a large amount of historical data on certain interrelated factors, one attempts to conceptualize alternative futures. E) detecting faulty underlying assumptions before forecasting errors can occur. | back 101 Answer: B |
front 102 A non-quantitative approach to forecasting that requires simply the presence of people with some knowledge of the situation to be predicted to propose ideas without first mentally screening them is called A) simulations. B) the delphi technique. C) brainstorming. D) signal monitoring. E) scenarios. | back 102 Answer: C |
front 103 One ground rule necessary for effective brainstorming is A) scrutinize each idea generated. B) propose ideas without mentally screening them. C) calculating future earnings of each idea. D) critique each idea for rationality. E) forecast the success of each idea. | back 103 Answer: B |
front 104 Regression analysis is an example of which quantitative forecasting technique? A) the delphi technique B) statistical modeling C) brainstorming D) trend-impact analysis E) morphological analysis | back 104 Answer: B |
front 105 The most widely used forecasting technique used after trend extrapolation is A) statistical modeling. B) simulations. C) scenario-writing. D) expert opinion. E) brainstorming. | back 105 Answer: C |
front 106 Which one of the following is NOT part of the process of industry scenarios? A) Examine possible shifts in societal variables. B) Identify uncertainties in each of the six forces in the task environment. C) Generate at least 15 scenarios. D) Make a range of plausible assumptions about future trends. E) Analyze the industry situation that would prevail under each scenario. | back 106 Answer: C |
front 107 The technique recommended by the text to organize an analysis of external strategic factors is called A) IFAS. B) EFAS. C) SFAS. D) SWOT. E) the issues priority matrix. | back 107 Answer: B |
front 108 In the EFAS Table, the indicator of how well a particular company is responding to current and expected factors in its external environment is characterized by the A) IFAS score. B) industry matrix. C) total weighted score. D) SWOT score. E) SFAS score. | back 108 Answer: C |
front 109 Describe the four general forces in the societal environment. | back 109 Answer: The four general forces in the societal environment are economic, technological, political-legal, and sociocultural. Economic forces regulate the exchange of materials, money, energy, and information. Technological forces generate problem-solving inventions. Political-legal forces allocate power and provide constraining and protecting laws and regulations. Sociocultural forces regulate the values, mores, and customs of society. |
front 110 List eight current sociocultural trends in the United States that are transforming North America and the world. | back 110 Answer: Eight current sociocultural trends in the United States that are transforming North America and the world are as follows: Increasing environmental awareness Growing health consciousness Expanding seniors market Impact of Millennials Decline of the mass market Changing pace and location of life Changing household composition Increasing diversity of workforce and markets |
front 111 Describe Porter's approach to industry analysis. | back 111 Answer: Michael Porter contends that a corporation is most concerned with the intensity of competition within its industry. The level of this intensity is determined by basic competitive forces. These are the threat of new entrants, rivalry among existing firms, threat of substitute products or services, bargaining power of buyers, bargaining power of suppliers, and relative power of other stakeholders (added later by the authors). New entrants to an industry typically bring to it new capacity, a desire to gain market share, and substantial resources. The threat of entry depends on the presence of entry barriers and the reaction that can be expected from existing competitors. A competitive move by one firm can be expected to have noticeable effect on its competitors and thus may cause retaliation or counter efforts. Intense rivalry is related to the presence of the number of competitors, rate of industry growth, product or service characteristics, the amount of fixed costs, capacity, the height of exit barriers, and the diversity of rivals. Substitute products are those products that appear to be different but can satisfy the same need as another product. Buyers affect an industry through their ability to force down prices, bargain for higher quality or more services, and play competitors against each other. Suppliers can affect an industry through their ability to raise prices or reduce the quality of purchased goods and services. The sixth force includes a variety of stakeholder groups from the task environment. The importance of these stakeholder groups varies by industry. |
front 112 Distinguish between a fragmented and consolidated industry. | back 112 Answer: A fragmented industry has no firm with a large market share and each firm serves only a small piece of the total market in competition with others. As new competitors enter the industry, prices drop as a result of competition. A consolidated industry is dominated by a few large firms, each of which struggles to differentiate its products from the competition. The automobile, petroleum, and major home appliance industries are examples of mature, consolidated industries each controlled by a few large competitors. |
front 113 What are the two factors that tend to determine whether an industry will be primarily multidomestic or primarily global? | back 113 Answer: The factors that tend to determine whether an industry will be primarily multidomestic or primarily global are pressure for coordination within the multinational operations operating in that industry and pressure for local responsiveness on the part of individual country markets. A multidomestic industry is one in which companies tailor their products to the specific needs of consumers in a particular country. A global industry is one in which companies manufacture and sell the same products, with only minor adjustments made for individual countries around the world. |
front 114 Describe the four strategic types of the Miles and Snow typology. | back 114 Answer: According to Miles and Snow, there are four general types of firms based on their general strategic orientation. Defenders are companies with a limited product line that focus on improving the efficiency of their existing operations. Prospectors are companies with fairly broad product lines that focus on product innovation and market opportunities. Analyzers are corporations that operate in at least two different product-market areas, one stable and one variable. Reactors are corporations that lack a consistent strategy-structure-culture relationship. |
front 115 Define competitive intelligence. | back 115 Answer: Competitive intelligence is a formal program of gathering information on a company's competitors. Often called business intelligence, it is one of the fastest growing fields within strategic management. Most companies use outside organizations (such as A.C. Nielsen Co.) to provide them with environmental data. The Internet provides the quickest means to obtain data. Some companies choose to use industrial espionage or other intelligence-gathering techniques to get their information straight from their competitors. |
front 116 Discuss the most commonly practiced form of forecasting. | back 116 Answer: Trend extrapolation is the most widely practiced form of forecasting with over 70% of the world's largest firms using this technique either occasionally or frequently. Extrapolation is the extension of present trends into the future. It rests on the assumption that the world is reasonably consistent and changes slowly in the short run. Time-series methods are approaches of this type: they attempt to carry a series of historical events forward into the future. The basic problem with extrapolation is that a historical trend is based on a series of patterns or relationships among so many different variables that a change in any one can drastically alter the future direction of the trend. As a rule of thumb, the further back into the past you can find relevant data supporting the trend, the more confidence you can have in the prediction. |