question

Customer service falls under the category of supporting activities in a value chain.

answer

False

question

________ includes general management, finance, accounting, legal, and government affairs.

answer

Firm infrastructure

question

According to Porter, all information systems in the organization must facilitate the organization's competitive strategy to be effective.

answer

True

question

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

answer

False

question

Business processes implement value chains or portions of value chains.

answer

True

question

Each stage of the value chain not only adds value to the product but also ________.

answer

accumulates costs

question

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

answer

False

question

Which of the following is true if the threat from a substitute is strong?

answer

Customers are likely to switch to competitors' products

question

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

answer

True

question

Procurement falls under the category of primary activities in a value chain.

answer

False

question

Establishing alliances with other organizations promotes product awareness.

answer

True

question

Value chain analysis has a direct application to manufacturing businesses.

answer

True

question

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

answer

False

question

A business that selects a differentiation strategy will always structure itself around least-cost activities.

answer

False

question

Value chains exist in service-oriented companies.

answer

True

question

The availability of substitutes plays a role in determining the bargaining power of suppliers for industrial clients.

answer

True

question

The threat of substitution in Porter's model concerns the danger of customers taking their business elsewhere.

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

Receiving, storing, and disseminating inputs to a product is an operations management activity.

answer

False

question

Each stage of the generic value chain reduces the value of the product.

answer

False

question

Substitutions may not be viable options for some industrial clients due to ________ or physical distance limitations.

answer

the lack of internal technical expertise

question

Porter originally developed the five forces model in order to understand organizations' workforce.

answer

False

question

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

answer

True

question

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

answer

strategy

question

If the costs of switching to another vendor are high, then the bargaining power of the customer is low.

answer

True

question

It is easier to calculate the margin of supporting activities than primary activities.

answer

False

question

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

answer

True

question

Manufacturing systems avoid linkages to reduce inventory costs.

answer

False

question

Organizations analyze the structure of their industry and use that analysis to formulate a competitive strategy.

answer

True

question

Which of the following primary activities describes collecting, storing, and physically distributing products to buyers?

answer

outbound logistics

question

Each value chain is supported by one or more business processes.

answer

True

question

Enhancing existing products and services is a competitive advantage created by the implementation of business processes.

answer

False

question

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

answer

False

question

The bargaining power of ________ is one of the five competitive forces in Porter's five forces model.

answer

customers

question

If a value chain's margin is negative, the company must reduce the cost of the value chain.

answer

True

question

Porter identified the bargaining power of competitors as one of the forces in his five forces model.

answer

False

question

Two companies with the same value chain activities will have the same business processes.

answer

False

question

Competitive strategy determines an organization's value chain.

answer

True

question

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

answer

True

question

Surplus of a product serves as an example of weak force for the bargaining power of suppliers.

answer

True

question

Which of the following statements describes a scenario in which the bargaining power of a supplier is strong?

answer

The availability of raw materials is limited

question

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

answer

True

question

Which of the following competitive strategies does a company follow if it produces a uniquely formulated anti-aging face cream targeted at women above the age of forty?

answer

focusing on product differentiation within an industry-segment

question

Which of the following is a product implementation principle of competitive advantage?

answer

enhance existing products or services

question

Inbound and outbound logistics are the primary value generators in a service-oriented company.

answer

False

question

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

answer

False

question

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

answer

False

question

The difference between the value that an activity generates and the value of its competitor is called the margin.

answer

False

question

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

answer

False

question

Which of the following primary value chain activities induce buyers to purchase a product and provide a means for them to do so?

answer

sales and marketing

question

Raising barriers to market entry is a product implementation principle.

answer

False

question

Which of the following statements describes a customer service activity?

answer

assisting customers with the use of the product

question

Value chain activities are not dependent on the competitive strategies used by organizations.

answer

True

question

Which of the following statements is true of business processes?

answer

???

question

If the price of an alternative is lower than the price of an existing product, and customers perceive similar benefits from both the products, then the ________.

answer

threat from the substitute is strong

question

An organization responds to the structure of its industry by choosing a ________ strategy.

answer

competitive

question

A business that selects a differentiation strategy ________.

answer

adds cost to an activity, provided it has a positive margin

question

The competitive strategy followed by an organization is derived from the ________ of its industry.

answer

structure

question

According to Porter, the processes and systems in an organization pursuing differentiation strategy must ________ to avoid negative margins.

answer

create sufficient value to cover their costs

question

The difference between the value that an activity generates and the cost of the activity is called the ________.

answer

margin

question

Which of the following is a product implementation principle of competitive advantage?

answer

enhance existing products or services

question

Which of the following is a primary activity in the value chain?

answer

delivering products to consumers

question

Porter's five competitive forces can be grouped into forces related to competition and forces related to supply chain ________ power.

answer

bargaining

question

e's Lawn Services decides to offer two free mowing services for all customers who booked garden landscaping in the fall. Which of the following forces is Simpson's Lawn Services addressing?

answer

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

question

The competitive strategy of an organization determines its ________.

answer

value chain

question

Porter developed the five forces model to help organizations determine the ________.

answer

potential profitability of an industry

question

Which of the following is least likely to be an outcome of organizations forming alliances with each other?

answer

increment of purchasing costs

question

In which of the following situations is the strength of competitive forces low?

answer

when switching costs are high

question

Which of the following is a process implementation principle of competitive advantage?

answer

establishing alliances with other organizations

question

Which of the following is true of a value chain?

answer

It is a network of value-creating activities.

question

A manufacturing system uses sales forecasts to plan production. It uses the production plan to determine raw material needs and then uses the material needs to schedule purchases. This ultimately leads to reduced inventory costs. Which of the following is being used to reduce the inventory cost?

answer

???

question

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

answer

linkages

question

Porter defined ________ as the amount of money that a customer is willing to pay for a resource, product, or service.

answer

value

question

The bargaining power of a customer is weak if ________.

answer

the availability of a substitute is limited

question

A firm introduces a new range of laptops that concentrate on delivering good graphics performance. Which of the following competitive strategies has the firm adopted if these laptops have relatively low prices?

answer

focused low cost

question

Which of the following is an example of a competitive strategy employed by a firm?

answer

launching a unique product targeted at a section of consumers

question

Which of the following is true of supporting activities?

answer

Negotiation of prices is considered as a supporting activity.

question

In Porter's five forces model, the intensity of each of the five forces determines the characteristics of the industry, how profitable it is, and ________.

answer

how sustainable that profitability will be

question

Jupiter Shop is an online store. Customers have to create an online account to purchase products. The purchased products are delivered free of cost. The address of delivery is stored, so that customers can choose the same address for future purchases. Jupiter Shop features seasonal discounts and exchange offers. It also accumulates redeemable points for regular shoppers. Which of the following statements describes the use of information systems (IS) by Jupiter Shop to lock in customers?

answer

saving the delivery addresses

question

Which of the following strategies is also called establishing high switching costs?

answer

locking in customers

question

Which of the following is true of new entrants?

answer

They can capture the market with new and innovative services.

question

Which of the following describes suppliers in a position of strong bargaining power?

answer

coffee planters during a season of frost that decreases production

CIS 243- Ch. 3 – Flashcards

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