Deck 3: Organizational Strategy, Information Systems, and Competitive Advantage

Question 1

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 1

D

Question 2

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 2

A

Question 3

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 3

C

Question 4

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.

Question 5

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

Question 6

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

Question 7

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

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

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

Question 10

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

Question 11

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

Question 12

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

Question 13

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

A) function
B) structure
C) profits
D) goals

Question 14

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

Question 15

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

Question 16

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

Question 17

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

Question 18

The competitive strategy of an organization determines its ________.

A) industry rivals
B) short-term goals
C) value chains
D) structure

Question 19

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

Question 20

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

A) competitive
B) growth
C) leadership
D) operational

Question 21

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

Question 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

Question 23

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

A) linkages
B) evaluations
C) support
D) operations

Question 24

Competitive strategy determines an organization's value chain.

Question 25

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

Question 26

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

A) Human resources
B) Research and development
C) Firm infrastructure
D) Operations management

Question 27

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

Question 28

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

Question 29

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

Question 30

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

Question 31

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

Question 32

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

Question 33

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.

Question 34

Manufacturing systems use ________ to reduce inventory costs.

A) linkages
B) margins
C) value chains
D) support activities

Question 35

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

Question 36

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

Question 37

Manufacturing systems that include linkages,use ________ to plan production.

A) prior profits and losses
B) sales forecasts
C) competitor's information
D) software packages

Question 38

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

Question 39

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

Question 40

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

Question 41

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

Question 42

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

Question 43

Business processes implement value chains or portions of value chains.

Question 44

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

Question 45

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

Question 46

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

Question 47

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

Question 48

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

Question 49

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

Question 50

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

Question 51

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

Question 52

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

Question 53

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

Question 54

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

Question 55

Manufacturing systems avoid linkages to reduce inventory costs.

Question 56

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

Question 57

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

Question 58

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

Question 59

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

Question 60

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

Question 61

Distinguish between a primary and a support activity in the value chain.

Question 62

Describe using an example,the primary activities in a value chain.

Question 63

Describe some competitive advantage strategies that are based on business processes.

Question 64

What are the four competitive strategies based on Porter's five forces model?

Question 65

Briefly describe how organizational strategy determines the structure of information systems.

Question 66

What is the criterion on which business processes should run?

Question 67

Describe Porter's five forces model.

Question 68

Raising barriers to market entry is a product implementation principle.

Question 69

Differentiate between value and margin.

Question 70

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

Question 71

What is a value chain? List the primary activities in a value chain.

Question 72

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

Question 73

How can one develop competitive strategies using products? How can information systems help in the process?

Question 74

How did Porter define technology,human resources and firm infrastructure?

Question 75

Establishing alliances with other organizations promotes product awareness.

Question 76

How does competitive strategy determine value chain structure?

Question 77

Explain value chain linkages.

Question 78

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

Question 79

Describe the support activities in a value chain.

Question 80

Value chain analysis has a direct application to manufacturing businesses.