Deck 3: Organizational Strategy information Systems and Competitive Advantage

Question 1

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 1

D

Question 2

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 2

D

Question 3

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 3

B

Question 4

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

Question 5

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 6

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

Question 7

If customers perceive the benefits of a substitute to be similar to that of a product,then ________.

A)the threat from the substitute is weak
B)the price of the product should be increased to retain market share
C)the threat from the substitute is strong
D)there is no threat from the substitute

Question 8

The competitive strategy of an organization determines its ________.

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

Question 9

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 10

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

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

Question 11

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

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

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

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 14

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 toward organizational goals

Question 15

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 high
C)when customer loyalty to the brand or company is low
D)when finding rival products is easy

Question 16

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 17

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 18

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's office space
C)the threat posed by Roger's Landscapes,a new competitor
D)the bargaining power of the City Football Club who are Simpson's customers

Question 19

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 20

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 21

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)establishment of standards
D)increase in purchasing costs

Question 22

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

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

Question 23

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

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

Question 25

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 26

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 27

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

Question 28

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

Question 29

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

Question 30

Manufacturing systems that use linkages also use ________ to plan production.

A)past reports
B)sales forecasts
C)competitors' information
D)software packages

Question 31

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

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 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

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

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

Competitive strategy determines an organization's value chain.

Question 37

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

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

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 product implementation principle of competitive advantage?

A)raise barriers to market entry
B)enhance products or services
C)establish alliances
D)lock in customers and buyers

Question 41

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

Question 42

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

Question 43

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

Question 44

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

Question 45

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

Question 46

Value chain analysis has a direct application to manufacturing businesses.

Question 47

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

Question 48

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

Question 49

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

Question 50

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

Question 51

Manufacturing systems avoid linkages to reduce inventory costs.

Question 52

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

Question 53

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

Question 54

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 55

Business processes implement value chains or portions of value chains.

Question 56

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

Question 57

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

Question 58

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

Question 59

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

Question 60

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

Question 61

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

Question 62

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

Question 63

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

Question 64

Explain value chain linkages.

Question 65

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

Question 66

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

Question 67

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

Question 68

Establishing alliances with other organizations promotes product awareness.

Question 69

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

Question 70

Raising barriers to market entry is a product implementation principle.

Question 71

Describe Porter's five forces model.

Question 72

Describe the support activities in a value chain.

Question 73

What is the criterion on which business processes should run?

Question 74

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

Question 75

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

Question 76

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

Question 77

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

Question 78

Differentiate between value and margin.

Question 79

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

Question 80

How does competitive strategy determine value chain structure?