question

1) The competitive strategy followed by an organization is derived from its ________. A) function B) structure C) profits D) goals

answer

B) structure

question

2) The competitive strategy of an organization determines its ________. A) industry rivals B) short-term goals C) value chains D) structure

answer

C) value chains

question

3) In which of the following situations would the suppliers have the strongest bargaining power? A) coffee planters during a season of frost that decreases production B) companies negotiating compensation during a booming economy C) providers of logistic support during an economic slowdown D) a wholesaler declaring a stock-clearance sale

answer

A) coffee planters during a season of frost that decreases production

question

4) Porter originally developed the five forces model to determine ________. A) the potential profitability of an industry B) the nature of competitive industrial environments C) the reason why certain industries collapse D) the means by which to improve industrial viability

answer

A) the potential profitability of an industry

question

5) Simpson's Lawn Services decides to offer two free mowing services for all customers who booked garden landscaping in the fall. By doing this, which of the following forces is Simpson's addressing? A) the control exercised by Acme Corp. who supplies Simpson with lawn mowers B) the power held by the landlord of the Simpson office space C) the threat posed by Roger's Landscapes, a new competitor D) the bargaining power of the City Football Club who are their customers

answer

C) the threat posed by Roger's Landscapes, a new competitor

question

6) Porter's five competitive forces can be grouped into two types: forces related to ________ and forces related to supply chain bargaining power. A) pricing B) labor C) competition D) consumers

answer

C) competition

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7) Porter's model includes the bargaining power of which of the following groups as one of the five factors? A) investors B) competitors C) employees D) customers

answer

D) customers

question

8) In Porter's five factor model, each of the three competitive forces concerns the danger of ________. A) suppliers favoring rival companies B) customers taking their business elsewhere C) investors refusing to back up new projects D) employees not working towards organizational goals

answer

B) customers taking their business elsewhere

question

9) Two strength factors that relate to all three competitive forces are ________ and customer loyalty. A) market forces B) nature of products C) customer satisfaction D) switching costs

answer

D) switching costs

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10) In which of the following cases is the strength of competitive forces low? A) when switching costs are high B) when rival products are priced low C) when customer loyalty is low D) when the product is unique

answer

A) when switching costs are high

question

11) If customers perceive the benefits of a substitute to be similar to that of a product then ________. A) the threat of the substitute is weak B) the price should be increased to retain market C) the threat from the substitute is strong D) there is no threat from the substitute

answer

C) the threat from the substitute is strong

question

12) The strength of bargaining power forces depends on the availability of substitutes and ________ compared to the size of suppliers or customers. A) the amount of profit made annually B) the relative size of the firm C) the presence of competitors in the market D) the threat of new competitors

answer

B) the relative size of the firm

question

13) An organization responds to the structure of its industry by choosing a ________ strategy A) competitive B) growth C) leadership D) operational

answer

A) competitive

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14) If a company produces a uniquely formulated anti-ageing face cream targeted at women above the age of forty, which of the following competitive strategies is it following? A) industry-wide low cost B) industry-wide differentiation C) focused low cost D) focused differentiation

answer

D) focused differentiation

question

15) Which of the following is an example of a competitive strategy employed by a firm? A) increasing the price of its product when raw material prices increase B) laying off staff in order to cut down costs during a recession period C) advertising its products nationwide like its competitor organizations D) launching a unique product targeted at a section of consumers

answer

D) launching a unique product targeted at a section of consumers

question

16) According to Porter, to be effective the organization's goals, objectives, culture, and activities must be consistent with the ________. A) organization's structure B) organization's competitors C) organization's strategy D) organization's workforce

answer

C) organization's strategy

question

17) Porter defined ________ as the amount of money that a customer is willing to pay for a resource, product, or service. A) margin B) profit C) price D) value

answer

D) value

question

18) Which of the following is true of a value-chain? A) It is a network of value-creating activities. B) It consists of only primary activities. C) It is specific to manufacturing industries. D) It nullifies the importance of support activities.

answer

A) It is a network of value-creating activities.

question

19) A business that selects a differentiation strategy would ________. A) add cost to an activity provided it has a positive margin B) provide essential functions at lowest costs C) imitate rival companies' strategy and products D) aim to please stockholders with highest dividends

answer

A) add cost to an activity provided it has a positive margin

question

20) The difference between the value that an activity generates and the cost of the activity is called the ________. A) equity B) liability C) overhead D) margin

answer

D) margin

question

21) Collecting, storing, and physically distributing the product to buyers describes which of the following primary activities? A) inbound logistics B) sales and marketing C) outbound logistics D) operations/management

answer

C) outbound logistics

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22) Inducing buyers to purchase the product and providing a means for them to do so describes which of the following primary activities? A) inbound logistics B) sales and marketing C) outbound logistics D) operations/management

answer

B) sales and marketing

question

23) Each stage of the value chain not only adds value to the product but also ________. A) attracts buyers B) accumulates costs C) devalues the final product D) attracts competitors

answer

B) accumulates costs

question

24) Which of the following is a primary activity in the value chain? A) processes of finding vendors B) setting up contractual arrangements C) negotiating prices D) delivering products to consumers

answer

D) delivering products to consumers

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25) ________ includes general management, finance, accounting, legal, and government affairs. A) Human resources B) Research and development C) Firm infrastructure D) Operations management

answer

C) Firm infrastructure

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26) Porter's model of business activities includes ________, which are interactions across value activities. A) linkages B) evaluations C) support D) operations

answer

A) linkages

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27) Manufacturing systems that include linkages, use ________ to plan production. A) prior profits and losses B) sales forecasts C) competitor's information D) software packages

answer

B) sales forecasts

question

28) Manufacturing systems use ________ to reduce inventory costs. A) linkages B) margins C) value chains D) support activities

answer

A) linkages

question

29) As Porter says, the processes and systems in an organization pursuing differentiation must ________. A) create sufficient value to cover their costs B) provide products at lowest costs to customers C) make it easy for products to be duplicated D) give stiff competition to other similar products

answer

A) create sufficient value to cover their costs

question

30) If a value chain's margin is positive, the company must ________. A) try to increase the value B) reduce the cost of the value chain C) retain its present practices D) change its present practices

answer

C) retain its present practices

question

31) Organizations gain a competitive advantage by creating new products or services, ________ and by differentiating their products and services from those of their competitors. A) advertising products and services B) imitating existing products and services C) promoting products and services D) enhancing products and services

answer

D) enhancing products and services

question

32) Which of the following is a product implementation principle of competitive advantage? A) Raise barriers to market entry. B) Enhance goods or services. C) Establish alliances with firms. D) Lock in customers and buyers.

answer

B) Enhance goods or services.

question

33) Which of the following strategies is also called establishing high switching costs? A) establishing alliances B) locking in suppliers C) reducing costs D) locking in customers

answer

D) locking in customers

question

34) Which of the following is a process implementation principle of competitive advantage? A) creating a new product B) enhancing a product C) establishing alliances D) differentiating a product

answer

C) establishing alliances

question

35) Which of the following is least likely to be an outcome of organizations forming alliances with each other? A) promotion of product awareness B) development of market size C) reduction in purchasing costs D) increase in mutual competitiveness

answer

D) increase in mutual competitiveness

question

Competitive strategy determines an organization's value chain.

answer

true

question

Porter originally developed the five forces model in order to understand organizations' competitive environment

answer

false

question

According to Porter's five forces model, a company is profitable if all the five competitive forces are strong

answer

false

question

The bargaining power of competitors is one of the competitive forces identified by Porter

answer

false

question

The three competitive forces, in Porter's model, concern the danger of customers taking their business elsewhere

answer

true

question

If the costs of switching to another vendor are high, then the strength of the competitive forces is low

answer

true

question

The strength of bargaining power forces does not depend on the availability of substitutes

answer

false

question

Typically, as an individual, a customer has substantial bargaining power to a large manufacturing industry

answer

false

question

An organization can choose to either minimize cost or maximize differentiation to gain a competitive advantage

answer

true

question

Focused differentiation is a strategy in which the product is unique and is used by a wide range of consumers

answer

false

question

According to Porter, to be effective the organization's goals, objectives, culture, and activities must be consistent with the organization's strategy

answer

true

question

A business that selects a differentiation strategy would structure itself around least-cost activities

answer

false

question

Organizations analyze the structure of their industry, and, using that analysis, they formulate a competitive strategy

answer

true

question

Support activities are business functions that relate directly to the production of the organization's products or services

answer

false

question

A business with a cost strategy will add cost to an activity only as long as the activity has a positive margin

answer

false

question

Each stage of the generic value chain accumulates costs and subtracts value from the product

answer

false

question

The support activities in the generic value chain facilitate the primary activities and contribute only indirectly to production, sale, and service of the product

answer

true

question

Receiving, storing, and disseminating inputs to the product falls under the operation function of primary activity

answer

false

question

The company uses the outbound logistics activity to deliver the finished product to a customer

answer

true

question

Porter's definition of technology is narrow as it only includes research and development.

answer

false

question

Porter's model of business activities includes linkages, which are interactions across value activities

answer

false

question

Firm infrastructure excludes general management, finance, accounting, legal, and government affairs

answer

false

question

Business processes implement value chains or portions of value chains

answer

true

question

Supporting activities contribute to a margin and are easier to calculate than primary activities

answer

false

question

Manufacturing systems avoid linkages to reduce inventory costs

answer

false

question

No matter what competitive strategy is being used, the value chain activities remain the same

answer

true

question

Value chain analysis has a direct application to manufacturing businesses

answer

true

question

If the value chain's margin is negative, the company must make some change

answer

true

question

An information system can be part of a product but it cannot provide support for a product or service

answer

false

question

Raising barriers to market entry is a product implementation principle

answer

false

question

Establishing alliances with other organizations promotes product awareness

answer

true

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