Question 1

Which of the following reasons is not a reason that Atlas Door could lose competitive advantage?
A) Its technologies are non-proprietary.
B) A rival easily could hire away its talented employees.
C) A new rival with a strong resource base could undercut its prices.
D) It has strong power over its distributors.

Accepted Answer

Having strong power over distributors is actually a factor that can increase competitive advantage, as it allows a company to effectively control its distribution channels and reach customers more efficiently. Therefore, this is not a reason that Atlas Door could lose competitive advantage.

Question 2

Which of the following is not a reason for the possible erosion of company competitive advantage?
A) rapid change in technology
B) globalization
C) actions by rivals from within and outside of the industry
D) company commitment to innovation

Accepted Answer

Company commitment to innovation is actually a reason for sustaining or enhancing competitive advantage, not erosion of it. Rapid change in technology, globalization, and actions by rivals are all potential factors that can erode a company's competitive advantage.

Question 3

Atlas Door created competitive advantage by reducing the time to receive and process an order and through installing a just-in-time logistics operation. Which of the following is not areason for their favorable position relative to the five forces of industry competition?
A) The service was easily imitable.
B) It created high entry barriers for new entrants.
C) The integration of many company value-chain activities provided causal ambiguity and path dependency.
D) It exerted power over its customers.

Accepted Answer

The fact that the service was easily imitable is a reason that Atlas Door's favorable position relative to the five forces of industry competition could be challenged. The other options (B, C, and D) are all reasons that Atlas Door's position is favorable. B describes high entry barriers, C describes the complexity and interdependence of Atlas Door's activities, and D describes their bargaining power over customers.

Question 4

Outside the flight experience itself, airlines are generating revenue by charging fees for credit cards, frequent-flyer programs, and access to airport lounges. This serves to
A) increase competition.
B) expand the profit pool.
C) provide better customer service.
D) satisfy regulators.

Accepted Answer

By charging these fees, airlines are able to increase their revenue streams and expand their profit pool beyond just the flight experience itself. This allows them to earn more money and potentially invest in improving their services or expanding their network.

Question 5

Mass customization permits companies to manufacture unique products in relatively ________ quantities at ________ costs.
A) large; higher
B) large; lower
C) small; higher
D) small; lower

Accepted Answer

Given the advances in manufacturing technologies such as CAD-CAM (computer aided design and computer aided manufacturing) as well as information technologies, many firms have been able to manufacture unique products in relatively small quantities at lower costs. This is a concept known as mass customization.

Question 6

Atlas Door relies on technologies that are rather well known and non-proprietary. This opens it up to the potential of
A) imitation by rivals.
B) customer abandonment.
C) increased supplier power.
D) government regulation.

Accepted Answer

Since Atlas Door uses non-proprietary technologies, it may be imitated by rivals, who can easily replicate their products or services. This may result in increased competition, reduced market share, and potentially lower profits.

Question 7

Underestimating expenses associated with coordinating value-creating activities in the extended value chain can be a result of ________ integration of cost leadership and differentiation.
A) good
B) poor
C) intentional
D) structured

Accepted Answer

Poor integration of cost leadership and differentiation can lead to underestimating expenses associated with coordinating value-creating activities in the extended value chain. When cost leadership and differentiation strategies are not aligned, coordination costs can rise unexpectedly, leading to cost overruns and missed targets. This highlights the importance of integrating cost leadership and differentiation strategies in a structured manner to avoid such issues.

Question 8

The Yoox algorithm permits it to predict which products will sell at which times and where, thus allowing effective stocking to meet customer needs. This a result of
A) purchasing patterns.
B) data analytics.
C) physical plant.
D) flooding the market with ads.

Accepted Answer

The Yoox algorithm uses data analytics to predict which products will sell at which times and where. It does not rely on purchasing patterns or flooding the market with ads. Physical plant may be relevant for some aspects of stocking, but it is not mentioned as the primary factor in this scenario.

Question 9

Atlas Door created competitive advantages in overall low cost and differentiation by creating ________ among value-chain activities.
A) substitutes
B) advantages
C) disadvantages
D) linkages

Accepted Answer

Atlas Door created competitive advantages by creating linkages among value-chain activities, such as integrating its supply chain management and production processes to reduce costs and improve efficiency. This allowed them to offer competitive pricing while also offering unique customization options and high-quality products.

Question 10

Ryanair and Spirit Airlines depend upon revenue from services not related to the actual flight. These services increase their
A) costs.
B) services.
C) profit pool.
D) difficulties.

Accepted Answer

Ryanair and Spirit Airlines generate a significant amount of revenue from services like baggage fees, priority boarding, and in-flight purchases. These additional services increase their profit pool beyond just the revenue from the actual flight ticket prices.

Question 11

Many firms have achieved success by integrating activities throughout the extended value chain by using ________ to link their own value chain with the value chains of their customersandsuppliers.
A) customization
B) information technology
C) human resources
D) competitive advantage

Accepted Answer

Integrating activities throughout the extended value chain is most effectively done using information technology to link the various value chains together. This allows for more efficient communication and coordination between the different parties involved.

Question 12

Rivals would find it difficult to challenge Atlas Door in the short run because of
A) strong customer loyalty.
B) low barriers to entry.
C) high threat of substitution.
D) low buyer switching costs.

Accepted Answer

The question asks about the difficulty of rivals challenging Atlas Door in the short run. Option A states that Atlas Door has strong customer loyalty, which would make it difficult for rivals to attract and retain customers. This would give Atlas Door an advantage in the short run. Option B (low barriers to entry), Option C (high threat of substitution), and Option D (low buyer switching costs) would not necessarily make it difficult for rivals to challenge Atlas Door in the short run.

Question 13

Company competitive advantages can be eroded by all the following except
A) rapid changes in technology.
B) globalization.
C) actions by rivals within the industry.
D) actions by workers outside of the industry.

Accepted Answer

Actions by workers outside of the industry are unlikely to erode a company's competitive advantage, as they are not directly related to the industry or the company's performance. Rapid changes in technology, globalization, and actions by rivals within the industry are all potential threats to a company's competitive advantage as they can affect the company's ability to differentiate itself, reduce costs, or access markets.

Question 14

BlackBerry lost its competitive advantage by 2016 because it
A) did not deliver innovations to respond to changing market demand.
B) developed a highly performant just-in-time delivery system.
C) did not reward its employees.
D) let suppliers have dominant power.

Accepted Answer

BlackBerry failed to innovate and bring new products to the market to meet consumer demand, which ultimately led to its downfall. Its competitors, such as Apple and Samsung, were able to keep up with the evolving market and offer new features and technologies that BlackBerry could not.

Question 15

Barnes and Noble lost its market share in book retailing to Amazon. It tried to regain market share by offering a similar electronic reader, the Nook, to the Amazon Kindle series. Thisdemonstrates that Barnes and Noble lacked
A) a short-term strategy.
B) a company-wide strategy.
C) a sustainable competitive advantage.
D) good suppliers.

Accepted Answer

Barnes and Noble's attempt to compete with Amazon by offering a similar product (the Nook) indicates that the company lacked a sustainable competitive advantage. A sustainable competitive advantage is a unique advantage that a company has over its competitors, which is difficult or impossible for other firms to replicate. In this case, Barnes and Noble did not have a unique advantage, but rather tried to mimic Amazon's success by offering a similar product.

Question 16

In evaluating the sustainability of the Atlas Door competitive advantages over the long run, it is important to evaluate the ability of rivals to
A) easily imitate its strategy.
B) communicate with its customers.
C) consistently overprice their products.
D) find new suppliers.

Accepted Answer

The ability of rivals to easily imitate Atlas Door's strategy is important in evaluating the sustainability of its competitive advantages over the long run. If competitors are able to replicate Atlas Door's strategy, they can offer similar products at lower prices, eroding Atlas Door's market share and competitive advantages.

Question 17

Caterpillar collects and analyses large volumes of data about how customers use their tractors. This permits them to ________ the cost of new product development efforts and to better________ their products.
A) increase; differentiate
B) reduce; differentiate
C) position; understand
D) identify; disperse

Accepted Answer

By collecting and analyzing data about customer usage of their tractors, Caterpillar can identify areas where they can reduce the cost of new product development and better differentiate their products from competitors.

Question 18

Atlas Door tightly controlled logistics so that it always shipped only fully complete orders to construction sites. In regard to the five forces model, which of the following is a reason this might give them competitive advantage?
A) It helps to reduce the threat of new entrants.
B) It created low entry barriers for new entrants.
C) It created a high threat of substitution.
D) It gave more power to buyers.

Accepted Answer

By tightly controlling logistics and only shipping complete orders, Atlas Door is reducing the likelihood of new competitors being able to enter the market. They have a competitive advantage in terms of efficiency and reliability, which can be difficult for new entrants to match. This helps to reduce the threat of new entrants by establishing a barrier to entry.

Question 19

Andersen Windows lowered costs, enhanced quality and variety, and improved its response time to customers by
A) creating a new paper-based catalog.
B) creating an interactive computer version of its paper catalogs.
C) creating an integrated computer system of catalogs, products, orders, and manufacturing.
D) creating a manufacturing system for ordering parts.

Accepted Answer

Creating an integrated computer system of catalogs, products, orders, and manufacturing would allow for streamlined processes and efficient communication throughout the company. This would lead to lower costs, enhanced quality and variety, and improved response time to customers. The other choices (creating new paper-based catalog, creating an interactive computer version of paper catalogs, creating a manufacturing system for ordering parts) do not address all three aspects (lower costs, enhanced quality and variety, improved response time) in the same comprehensive manner as an integrated computer system.

Question 20

A risk for a firm that tries to attain both cost and differentiation advantages is that it can be stuck in the middle. An example of this is supermarkets because their ________ structure is ________ than discount retailers, and customers do not value their products and services as being high-end such as those offered by Whole Foods.
A) cost; higher
B) price; higher
C) price; lower
D) cost; lower

Accepted Answer

The question is talking about a firm trying to attain both cost and differentiation advantages, meaning it wants to offer products at lower prices than high-end competitors but still differentiate itself from low-end competitors. Supermarkets are an example of a firm that may fall into this category because their cost structure is higher than discount retailers (such as Walmart or Aldi), but their products and services are not as high-end as Whole Foods. Therefore, their pricing and differentiation strategies may not be as effective, and they may be stuck in the middle without a clear competitive advantage. Choice A is the best answer because it describes this situation accurately.

Quiz 5: Business-Level Strategy Creating and Sustaining Competitive Advantages

Which of the following reasons is not a reason that Atlas Door could lose competitive advantage?

Which of the following is not a reason for the possible erosion of company competitive advantage?

Atlas Door created competitive advantage by reducing the time to receive and process an order and through installing a just-in-time logistics operation. Which of the following is not areason for their favorable position relative to the five forces of industry competition?

Outside the flight experience itself, airlines are generating revenue by charging fees for credit cards, frequent-flyer programs, and access to airport lounges. This serves to

Mass customization permits companies to manufacture unique products in relatively quantities at costs.

Atlas Door relies on technologies that are rather well known and non-proprietary. This opens it up to the potential of

Underestimating expenses associated with coordinating value-creating activities in the extended value chain can be a result of ________ integration of cost leadership and differentiation.

The Yoox algorithm permits it to predict which products will sell at which times and where, thus allowing effective stocking to meet customer needs. This a result of

Atlas Door created competitive advantages in overall low cost and differentiation by creating ________ among value-chain activities.

Ryanair and Spirit Airlines depend upon revenue from services not related to the actual flight. These services increase their

Many firms have achieved success by integrating activities throughout the extended value chain by using ________ to link their own value chain with the value chains of their customersandsuppliers.

Rivals would find it difficult to challenge Atlas Door in the short run because of

Company competitive advantages can be eroded by all the following except

BlackBerry lost its competitive advantage by 2016 because it

Barnes and Noble lost its market share in book retailing to Amazon. It tried to regain market share by offering a similar electronic reader, the Nook, to the Amazon Kindle series. Thisdemonstrates that Barnes and Noble lacked

In evaluating the sustainability of the Atlas Door competitive advantages over the long run, it is important to evaluate the ability of rivals to

Caterpillar collects and analyses large volumes of data about how customers use their tractors. This permits them to the cost of new product development efforts and to better their products.

Atlas Door tightly controlled logistics so that it always shipped only fully complete orders to construction sites. In regard to the five forces model, which of the following is a reason this might give them competitive advantage?

Andersen Windows lowered costs, enhanced quality and variety, and improved its response time to customers by