question

A competitive strategy followed by an organization is derived from the ----- of its industry:

answer

structure

question

A competitive strategy of an organization determines its -----:

answer

value chains

question

Porter originally developed the five forces model to determine the -----:

answer

potential profitability of an industry

question

What statement describes suppliers in a position of strong bargaining power?

answer

coffee planters during a season of frost that decreases production

question

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

answer

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

question

Porter's five competitive forces can be grouped into two types: forces related to ----- and forces related to supply chain bargaining power:

answer

competition

question

What groups bargaining power is considered as one of the five competitive forces in Porter's five forces model?

answer

customers

question

In Porter's five factor model, each of the three competitive forces concerns the danger of -----:

answer

customers taking their business elsewhere

question

The two strength factors that relate to all competitive forces are ----- and customer loyalty:

answer

switching costs

question

In what case is the strength of competitive forces low?

answer

when switching costs are high

question

If customers perceive the benefits of an alternative to be similar to that of a product, then the -----:

answer

threat from the substitute is strong

question

What is true if the threat from substitutes is strong?

answer

customers are likely to switch to competitors' products

question

What is true about new entrants?

answer

they are yet to develop relationships with suppliers

question

The strength of bargaining power depends on the availability of substitutes and ----- compared to the size of suppliers or customers:

answer

the relative size of the firm

question

What statement describes a scenario in which the bargaining power of a supplier is strong?

answer

the availability of raw materials is less

question

The bargaining power of a customer is weak if -----:

answer

the availability of a rival product is limited

question

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

answer

competitive

question

Which of the 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

focus differentiation

question

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

answer

focus low cost

question

What is an example of a competitive strategy employed by a firm?

answer

launching a unique product targeted at a section of consumers

question

According to Porter, to be effective, the organization's goals and activities must be consistent with the organization's -----:

answer

strategy

question

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

answer

value

question

What is true about a value chain?

answer

Support activities facilitate the primary activities

question

A business that selects a differentiation strategy would -----:

answer

add cost to an activity provided it has a positive margin

question

The difference between the value that an activity generates and the cost of the activity is called the -----:

answer

margin

question

What primary activity describes collecting, storing, and physically distributing products to buyers?

answer

outbound logistics

question

Which primary value chain activity induces buyers to purchase a product and provides a meaning for them to do so?

answer

sales and marketing

question

What statement describes a customer service activity?

answer

assisting with the use of the product

question

What is true of supporting activities?

answer

Negotiation of prices is considered a supporting activity

question

Each stage of the value chain not only adds value to the product but also -----:

answer

accumulates cost

question

What is a primary activity in the value chain?

answer

delivering products to consumers

question

-----includes general management, finance, accounting, legal, and government affairs:

answer

Firm infrastructure

question

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

answer

linkages

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. What is being used to reduce the inventory cost?

answer

linkages

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

What statement is true of business processes?

answer

the processes implementing a value chain must create sufficient value to cover their costs

question

What is a product implementation principle of competitive advantage?

answer

enhance products or services

question

What strategy is also called establishing high switching costs?

answer

locking in customers

question

What is a process implementation principle of competitive advantage?

answer

establishing alliances

question

What is least likely to be an outcome of organizations forming alliances with each other?

answer

increase in purchasing costs

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. What statement describes the use of IS by Jupiter Shop to lock-in customers?

answer

saving the delivery addresses

question

Competitive strategy determines an organization's value chain (T/F):

answer

True

question

Porter originally developed the five forces model in order to understand organizations' competitive environment (T/F):

answer

False

question

According to Porter's five forces model, a company is profitable if all the five competitive forces are strong (T/F):

answer

False

question

The bargaining power of competitors is one of the competitive forces identified by Porter (T/F):

answer

False

question

The three competitive forces in Porter's model concern the danger of customers taking their business elsewhere (T/F):

answer

True

question

If the costs of switching to another vendor are high, then the strength of the competitive forces is low (T/F):

answer

True

question

The strength of bargaining power forces does not depend on the availability of substitutes (T/F):

answer

False

question

Typically, as an individual, a customer has substantial bargaining power over a large manufacturing industry (T/F):

answer

False

question

Availability of substitutes plays a role in determining the bargaining power of suppliers (T/F):

answer

True

question

Vendor knowledge and vendor relationships serve as a barrier to entry for new competitors (T/F):

answer

True

question

An organization can choose to either minimize cost or maximize differentiation to gain a competitive advantage (T/F):

answer

True

question

Focus differentiation is a strategy in which a product is unique and is used by a wide range of consumers (T/F):

answer

False

question

According to Porter, to be effective, an organization's goals and activities must be consistent with the organization's strategy (T/F):

answer

True

question

Organizations analyze the structure of their industry and use that analysis to formulate a competitive strategy (T/F):

answer

True

question

A business that selects a differentiation strategy will always structure itself around least-cost activities (T/F):

answer

False

question

The difference between the value that an activity generates and the cost of the activity is called the margin (T/F):

answer

True

question

Customer service falls under the category of supporting activities in a value chain (T/F):

answer

False

question

Procurement falls under the category of primary activities in a value chain (T/F):

answer

False

question

Porter's definition of technology is narrow because it only includes research and development (T/F):

answer

False

question

Support activities are business functions that relate directly to the production of the organization's products or services (T/F):

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 (T/F):

answer

False

question

Each stage of the generic value chain accumulates costs and subtracts value from the product (T/F):

answer

False

question

The support activities in the generic value chain facilitate the primary activities and contribute only indirectly to a product's value (T/F):

answer

True

question

Receiving, storing, and disseminating inputs to a product is an operations function (T/F):

answer

False

question

A company uses the outbound logistics activity to deliver the finished product to a customer (T/F):

answer

True

question

Porter's model of business activities includes linkages, which are interactions across value activities (T/F):

answer

True

question

Firm infrastructure excludes general management, finance, accounting, legal, and government affairs (T/F):

answer

False

question

Supporting activities are easier to calculate than primary activities (T/F):

answer

False

question

Value chain analysis has a direct application to manufacturing businesses (T/F):

answer

True

question

Manufacturing systems avoid linkages to reduce inventory costs (T/F):

answer

False

question

Value chains exist in service-oriented companies (T/F):

answer

True

question

Inbound and Outbound logistics are the primary value generators in a service-oriented company (T/F):

answer

False

question

Business processes implement value chains or portions of value chains (T/F):

answer

True

question

Each value chain is supported by one or more business processes (T/F):

answer

True

question

No matter what competitive strategy is used, the value chain activities remain the same (T/F):

answer

True

question

Two companies with the same value chain activities will have the same business processes (T/F):

answer

False

question

If a value chain's margin is negative, the company must make some change (T/F):

answer

True

question

An information system can be part of a product, but it cannot provide support for a product or service (T/F):

answer

False

question

Raising barriers to market entry is a product implementation principle (T/F):

answer

False

question

Establishing alliances with other organizations promotes product awareness (T/F):

answer

True

question

Information systems can be a part of products (T/F):

answer

True

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