Question 1

Callie Crystal owns and operates one of the most successful local coffee shops in Denver, called The Edgewater Café. Each time a customer purchases their 100th cup of coffee at The Edgewater Café they receive a free pound of coffee of their choice. What is Callie attempting to create with her unique "Free Pound of Coffee" marketing program?
A)Reducing buyer power with a loyalty program.
B)Increasing buyer power with a loyalty program.
C)Decreasing supplier power with a differentiated product.
D)Creating a substitute product.

Accepted Answer

One way to reduce buyer power is with a loyalty program which is a program to reward customers based on their spending.

Question 2

What includes all parties involved, directly or indirectly, in obtaining raw materials or a product?
A)Support chain.
B)Supply chain.
C)System chain.
D)Supply choice.

Accepted Answer

Supply chain includes all parties involved, directly or indirectly, in obtaining raw materials or a product.

Question 3

Imagine you are creating a new product to sell in an up-and-coming market. Which of the below statements indicates that it would be easy for you as the new entrants to compete in this market?
A)The threat of new entrants' force is high in the up-and-coming market.
B)The threat of new entrants' force is low in the up-and-coming market.
C)The threat of new entrants' force is impossible to define in the up-and-coming market.
D)All of the above depending on the time of year.

Accepted Answer

The threat of new entrants is high when it is easy for new competitors to enter a market and low when there are significant entry barriers to joining a market.

Question 4

Which of the following offers an example where Porter's five forces are mostly weak and competition is low?
A)An international hotel chain purchasing milk.
B)A coffee shop.
C)A single consumer purchasing milk.
D)A dog walking business.

Accepted Answer

With Porter's five forces model, these are all examples of weak forces, where it decreases competition: 1)an international hotel chain purchasing milk, 2)a company that makes airline engines, 3)cancer drugs from a pharmaceutical company, 4)a professional hockey team, and 4)department of Motor Vehicles.

Question 5

Shawn McGill is on the executive board for ABC pharmaceuticals. The company produces the number one selling cancer fighting drug on the market. Due to its incredible success ABC pharmaceuticals has decided to increase the cost of the drug from $8 a pill to $15 a pill. Which force is ABC pharmaceutical using to increase its drug price?
A)Supplier power.
B)Buyer power.
C)Threat of false entrants.
D)Business power.

Accepted Answer

Supplier power is One of Porter's five forces, measures the suppliers' ability to influence the prices they charge for supplies (including materials, labor, and services).

Question 6

The banking industry has implemented several competitive advantages including ATM's, online bill pay services, and electronic statements. Of course, these competitive advantages were quickly duplicated by any competitor that wanted to remain in the banking industry. These were all examples of ________ competitive advantages.
A)Acquiring new technology products and services
B)Hiring new employees
C)Reducing expenses
D)Gaining invaluable feedback from customers

Accepted Answer

The banking industry, for example, has utilized competitive advantage by all now offering ATM's, online bill pay services, and e-statements are all examples of ways they duplicated each other by acquiring new technology products and services.

Question 7

How can a company reduce the threat of substitute products or services?
A)Market the product to less than ten customers.
B)Ignore competitive forces.
C)Offer additional value through wider product distribution.
D)Offer less value making the product far more generic and similar to the competition.

Accepted Answer

One way a company can reduce the threat of substitute products or services is to offer additional value through wider product distribution.

Question 8

What is a feature of a product or service that customers have come to expect and entering competitors must offer the same if they want to survive?
A)Significant barrier.
B)Entry barrier.
C)Product differentiation.
D)Entry chain.

Accepted Answer

Entry barrier is a feature of a product or service that customers have come to expect and entering competitors must offer the same for survival.

Question 9

Which of the below represents a company in a supply chain?
A)Customer and competitor.
B)Supplier and competitor.
C)Knowledge worker and supplier.
D)Supplier and customer.

Accepted Answer

In a typical supply chain, a company will be both a supplier and a customer.

Question 10

John Cleaver is the CEO of Tech World, which is a retail store that sells computers, monitors, cameras, televisions and many other electronic products. John and his executive team are meeting to brainstorm new ideas on how to grow the business. One idea is to mimic a competitor's product that is attempting to sell a new product in a different industry. After performing a Porter's Five Forces analysis John determines that all of the forces are high in this new industry. What should John do?
A)Explode into the market with an overflow of the product.
B)Contemplate other products to introduce at the same time in this new market.
C)Compare the competitor's prices and offer his product lower in this new market.
D)Not introduce the product because all five forces are strong and this would be a highly risky business strategy.

Accepted Answer

When the five forces are all strong or high it is a poor business strategy, when the forces are low, this is a great time to execute the business strategy.

Question 11

If a supplier has high power what can it do to influence its industry?
A)Charge higher prices.
B)Shift costs to industry participants.
C)Limit quality or services.
D)All of the above.

Accepted Answer

If the supplier power is high, the supplier can influence the industry by, 1)charging higher prices, 2)limiting quality or services, 3)shifting costs to industry participants.

Question 12

Imagine you are creating a new product to sell in an up-and-coming market. Which of the below statements indicates that it would be difficult for you to enter this new market?
A)The threat of new entrants' force is high in the up-and-coming market.
B)The threat of new entrants' force is low in the up-and-coming market.
C)The threat of new entrants' force is high during the summer months in the up-and-coming market.
D)All of the above depending on the time of year.

Accepted Answer

The threat of new entrants is high when it is easy for new competitors to enter a market and low when there are significant entry barriers to joining a market.

Question 13

In the center of Porter's Five Forces model is competition. Which of the below represents the four outer boxes?
A)Buyer power, systems power, threat of false entrants, and threat of substitute products or services
B)Buyer power, systems power, threat of new entrants, and threat of substitute products or services
C)Buyer power, supplier power, threat of new entrants, and threat of substitute products or services
D)Business power, supplier power, threat of new entrants, and threat of powerful services

Accepted Answer

The four competitive forces that work amongst the power of competitors are buyer power, supplier power, threat of new entrants, and threat of substitute products or services.

Question 14

What are costs that make customers reluctant to switch to another product or service?
A)Support activities.
B)Switching costs.
C)Loyalty rewards.
D)Value chain activities.

Accepted Answer

Switching costs is Costs that make customers reluctant to switch to another product or service.

Question 15

Which of the following offers an example where Porter's five forces are mostly strong and competition is high?
A)A dog walking business.
B)A ski resort.
C)A professional hockey team.
D)All of the above.

Accepted Answer

With Porter's five forces model, these are all examples of strong forces, where it increases competition: 1)a single consumer purchasing milk, 2)a company that makes pencils, 3)coffee from McDonalds, 4)a dog walking business, and 5)a coffee shop.

Question 16

Kevin Campbell is an incoming freshman at your college. Kevin is frustrated by the cost of books, tuition, and expenses and he also needs to purchase a rather expensive laptop. In an effort to save money, Kevin begins a Facebook group finding other college students who need to purchase laptops. Soon, Kevin's Facebook group has close to 100,000 students. Kevin decides to collectively approach different computer companies to see if his group qualifies for a special discount. What business strategy is Kevin using to purchase laptops?
A)Collecting business intelligence.
B)Decreasing entry barriers.
C)Purchasing a substitute product.
D)Increasing buyer power.

Accepted Answer

Buyer power is one of Porter's Five Forces, which measures the ability of buyers to affect the price they must pay for an item. Kevin's group is attempting to increase its buyer power.

Question 17

Which one of Porter's five forces is high when it is easy for new competitors to enter a market and low when there are significant entry barriers to joining a market?
A)Threat of new entrants.
B)Threat of substitute products or services.
C)Threat of buyer power.
D)Supply chain competition.

Accepted Answer

Threat of new entrants is one of Porter's five forces, high when it is easy for new competitors to enter a market and low when there are significant entry barriers to joining a market.

Question 18

What is one of the most common ways a company can decrease supplier power?
A)Charge lower prices.
B)Charge higher prices.
C)Use MIS to find and create alternative products.
D)Companies cannot impact supplier power.

Accepted Answer

Using MIS to find alternative products is one way of decreasing supplier power.

Question 19

Which of the following represents a typical supply chain?
A)Company - Customers - Suppliers.
B)Company - Suppliers - Customers.
C)Suppliers - Company - Customers.
D)Suppliers - Customers - Company.

Accepted Answer

A traditional business supply chain operates like this: supplier - company - customers.

Question 20

Michael Porter defined the Five Forces Model and the potential pressures that can hurt sales. Which of the following is not one of the potential pressures that can hurt sales?
A)Suppliers can drive down profits by charging more for supplies.
B)New market entrants can steal potential investment capital.
C)Substitute products can steal customers.
D)Competition can steal customers.

Accepted Answer

Michael Porter defined the Five Forces Model. Before formally presenting his model, he identified pressures that can hurt potential sales, which include: 1)knowledgeable customers can force down prices by pitting rivals against each other, 2)influential suppliers can drive down profits by charging higher prices for supplies, 3)competition can steal customer, 4)new market entrants can steal potential investment capital, and 5)substitute products can steal customers.

Quiz 1: Management Information Systems: Business Driven MIS

What includes all parties involved, directly or indirectly, in obtaining raw materials or a product?

Imagine you are creating a new product to sell in an up-and-coming market. Which of the below statements indicates that it would be easy for you as the new entrants to compete in this market?

Which of the following offers an example where Porter's five forces are mostly weak and competition is low?

How can a company reduce the threat of substitute products or services?

What is a feature of a product or service that customers have come to expect and entering competitors must offer the same if they want to survive?

Which of the below represents a company in a supply chain?

If a supplier has high power what can it do to influence its industry?

Imagine you are creating a new product to sell in an up-and-coming market. Which of the below statements indicates that it would be difficult for you to enter this new market?

In the center of Porter's Five Forces model is competition. Which of the below represents the four outer boxes?

What are costs that make customers reluctant to switch to another product or service?

Which of the following offers an example where Porter's five forces are mostly strong and competition is high?

Which one of Porter's five forces is high when it is easy for new competitors to enter a market and low when there are significant entry barriers to joining a market?

What is one of the most common ways a company can decrease supplier power?

Which of the following represents a typical supply chain?

Michael Porter defined the Five Forces Model and the potential pressures that can hurt sales. Which of the following is not one of the potential pressures that can hurt sales?