True or False $($and explain why$)$:

$1.$ Managers often have little direct influence over a firm$$s general environment.

$2.$ We can use the PESTEL model to analyze a company$$s strengths and weaknesses.

$3.$ Level of unemployment is a legal factor in the PESTEL model.

$4.$ Demographic trends are political factors in the PESTEL model.

$5.$ Industry is a group of companies facing more or less the same set of suppliers and buyers.

$6.$ The five forces model identifies factors that determine the profit potential of an industry and shape a firm's competitive strategy.

$7.$ The stronger the five forces, the higher the industry$$s profit potential.

$8.$ The threat of substitutes is from products or services from outside the focal industry.

$9.$ A major difference between perfect competition and monopolistic competition is that a monopolistically competitive industry has differentiated products.

$10.$ The bargaining power of suppliers tends to be high when the supplier$$s industry is concentrated.

$11.$When customer switching costs are high, the threat of entry is high.

$12.$Working capital $=$ current liabilities $-$ current assets

$13.$ ROA indicates how much of a firm$$s sales is converted into profits.

$14.$Using accounting data alone to measure firm performance has limitations$,$ such as showing only the history and focusing mainly on tangible assets.

$15.$ Inventory turnover $=$ COGS$/$inventory

$16.$ Financial leverage index $=$ total equity$/$total assets

$17.$ Market cap $=$ Number of outstanding shares X Share price

$18.$ Total return to shareholders is stock price appreciation.

$19.$ The balanced scorecard is a framework to help managers achieve strategic objectives more effectively. It includes four key questions: $1)$ How do customers view us; $2)$ How do we create value; $3)$ what core competencies do we need; $4)$ How do shareholders view us$.$

$20.$ When evaluating firm performance, we need to compare the performance to competitors or industry average.

$21.$ Using shareholder value creation alone to measure performance has limitations such as volatile stock prices and irrational stock market activities.

$22.$ Strategic management is an integrative management field that combines analysis, formulation, and ideation in the quest for competitive advantage.

$23.$ Strategy is the set of goal$-$directed actions a firm takes to gain and sustain superior performance relative to competitors.

$24.$ Competitive advantage is what makes a firm unique.

$25.$ A good strategy contains a diagnosis of the competitive challenge, a guiding policy and a set of coherent actions to implement the guiding policy.

$26.$ Competitive parity is outperforming competitors or the industry average over a prolonged period of time.

$27.$ Firm effect is firm performance attributed to the structure of the industry in which the firm competes.

$28.$ Stakeholders are organizations, groups and individuals that can affect or are affected by a firm$$s actions.

$29.$ Board members are external stakeholders.

$30.$ Managers must pay attention to these three attributes of a stakeholder: legitimacy, urgency and popularity.

$31.$ Strategy is the art and science of success and failure.

$32.$ Strategy formulation concerns the choice of strategy in terms of where and when to compete.