Deck 2: Identifying Competitive Advantages

Question 1

What is a competitive advantage?

A) A product that an organization's customers place a lesser value on than similar offerings from a competitor.
B) A feature of a product or service on which customers place a lesser value than they do on similar offerings from a supplier.
C) A service that an organization's customers place a lesser value on than similar offerings from a supplier.
D) A feature of a product or service on which customers place a greater value than they do on similar offerings from competitors.

Answer 1

D
Explanation: This is the definition of competitive advantage.

Question 2

All of the following are common tools used in industry to analyze and develop competitive advantages,except:

A) Five-Forces Model
B) Three Generic Strategies
C) Competitive analysis model
D) Value chain analysis

Answer 2

C
Explanation: A competitive analysis model is not discussed in this text.

Question 3

A business strategy achieves a specific set of goals,which include __________.

A) Developing new products or services and attracting new competition.
B) Increasing costs and attracting new competition.
C) Attracting new customers and developing new products or services.
D) All of these.

Answer 3

C
Explanation: A business strategy is a leadership plan that achieves a specific set of goals or objectives such as developing new products or services, entering new markets, increasing customer loyalty, attracting new customers, increasing sales, and decreasing costs.

Question 4

Paula Logston is the owner and operator of a high-end online custom clothing company.Paula has never heard of Porter's Five-Forces Model,and she wants to understand why she would perform an analysis using it.If you were tasked with explaining Porter's Five-Forces Model to Paula,what would be the primary reason she would want to use this type of analysis?

A) To help Paula choose a clothing business focus.
B) To help Paula evaluate the attractiveness of the clothing industry.
C) To help Paula evaluate and execute business goals.
D) All of these.

Question 5

Steve Jobs and Apple created a big advantage in the technology industry with the introduction of the iPod,iPhone,and iPad.What are these all examples of?

A) Competitive advantage
B) Competitive intelligence
C) First-mover advantage
D) All of these

Question 6

The Victory Wireless store in Denver is currently offering a fabulous marketing strategy for potential new iPhone customers.Victory Wireless offers customers who purchase an iPhone with a two-year subscription a free Otter phone case,car charger,ear phones,and speakers.In terms of Porter's Five Forces,what is Victory Wireless attempting to achieve with this marketing strategy?

A) Increase buyer power.
B) Increase substitute products.
C) Decrease supplier power.
D) Decrease buyer power.

Question 7

Greg Provenzo owns and runs a Blockbuster video store.Greg is implementing a drive-thru rental process that is the same as you would find at a fast-food restaurant.Customers can pick up and drop off their videos without leaving their cars.Greg's new system has become so popular that Videos Plus,a competitor down the street,is attempting to re-create Greg's video drive-thru rental process.Greg's system is an example of a _________.

A) Supply chain power.
B) First-mover advantage.
C) Business processing strategy.
D) Business Intelligence.

Question 8

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) All of these.

Question 9

Which of the following is included in Porter's Five-Forces Model?

A) Loyalty expenses.
B) Supply chain management.
C) The power of competitors.
D) Systems thinking.

Question 10

Which of the following represents a reason why competitive advantages are typically temporary?

A) The competitor will hire away your key employees.
B) The competitor quickly seeks ways to duplicate your business operations.
C) The competitor will purchase new technology.
D) All of these.

Question 11

Which of the following is a tool a manager can use to analyze competitive intelligence and identify competitive advantages?

A) The three generic strategies.
B) The threat of substitute buyer power.
C) Differentiated costs.
D) Supplier loyalty.

Question 12

A __________ advantage features a product or service on which customers place a greater value than they do on similar offerings from competitors.

A) Competitive
B) Competitor
C) Power
D) First-mover

Question 13

Identifying competitive advantages can be difficult and explains why they are typically _______.

A) Temporary.
B) Satisfactory.
C) Terminated.
D) Unsuccessful.

Question 14

When a company is the first to market with a competitive advantage,this is called a first-mover advantage.All of the following companies were first-movers except ____________.

A) FedEx-the online self-service software.
B) Apple-iPad.
C) Apple-iPod.
D) Microsoft-Bing search engine.

Question 15

The banking industry has implemented several competitive advantages,including ATMs,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

Question 16

Which of the following is not a typical way that a company would duplicate a competitive advantage?

A) Acquiring the new technology.
B) Copying the business operations.
C) Hiring away key employees.
D) Carrying large product inventories.

Question 17

Updating business strategies is a continuous undertaking,as internal and external environments ________.

A) Become less competitive.
B) Remain stagnant.
C) Rapidly change.
D) Become more consistent.

Question 18

Gina Brooks works for Aquarium Retail Services selling high-end saltwater fish and tank supplies.Aquarium Retail Services is the current market leader in Gina's city.Gina has recently been approached by Deep Blue Incorporated with an opportunity to run its corporate nationwide marketing and sales division.Gina decides to jump at the opportunity! Deep Blue is attempting to gain a competitive ________ by stealing its competitor's key employees.

A) Power
B) Entry Barrier
C) Advantage
D) Loyalty

Question 19

Competitive intelligence is the process of gathering information about the competitive environment,including _________.

A) Competitors' employees.
B) Competitors' differentiated processes.
C) Competitors' plans.
D) All of these.

Question 20

The process of gathering information about the competitive environment,including competitors' plans,activities,and products,to improve a company's ability to succeed is the definition of ___________.

A) Feedback.
B) Information.
C) Competitive intelligence.
D) Data.

Question 21

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

Question 22

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

A) Market the product to fewer than 10 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.

Question 23

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 these.

Question 24

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.

Question 25

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.

Question 26

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.

Question 27

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

A) Significant barrier.
B) Entry barrier.
C) Product differentiation.
D) Entry chain.

Question 28

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 affect supplier power.

Question 29

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 100^th 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.

Question 30

Some industries' competition is much more intense than others.Retail grocery stores,such as Kroger,Safeway,and Albertson's in the United States,experience fierce competition and offer similar marketing campaigns to compete.What is this an example of in terms of Porter's Five Forces?

A) Rivalry among new entrants.
B) Rivalry among existing competitors.
C) Threat of substitute products or services.
D) Buyer power.

Question 31

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.

Question 32

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 the product of a competitor 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, introducing the product would be a highly risky business strategy.

Question 33

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.

Question 34

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.

Question 35

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 these, depending on the time of year.

Question 36

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 these.

Question 37

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 Pharmaceuticals using to increase its drug price?

A) Supplier power.
B) Buyer power.
C) Threat of false entrants.
D) Business power.

Question 38

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 entrant,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 these, depending on the time of year.

Question 39

When buyer power is low,supplier power is typically ______.

A) Identical.
B) High.
C) Low.
D) Unstable.

Question 40

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.

Question 41

According to Porter's three generic strategies for entering a market,if you have a focused strategy what market should you target?

A) A niche market.
B) A broad market.
C) Neither niche or broad markets.
D) Both niche and broad markets.

Question 42

Which of the following demonstrates a company that has implemented a low-cost,broad-market strategy?

A) Neiman Marcus.
B) Payless Shoes.
C) The Sharper Image.
D) Walmart.

Question 43

Jennifer Bloom is writing a paper and she must determine which of Porter's three generic strategies The Museum Company has implemented.Jennifer finds out that The Museum Company offers specialty products found only in museums around the world to affluent customers.What would Jennifer determine The Museum Company is using as its generic strategy?

A) Broad market, low cost.
B) Narrow market, high cost.
C) Broad market, high cost.
D) Narrow market, low cost.

Question 44

Your boss,Kerry Miller,has asked you to analyze the soft drink industry using Porter's five-forces model.Which of the following represents buyer power in the soft drink industry?

A) Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
B) Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in every Walmart store.
C) Zevia Natural Diet Soda begins selling directly over the Internet.
D) Vitamin water, fruit juice, and coffee.

Question 45

Porter identified three generic strategies that a business could follow after identifying a market it wanted to enter.Which of the following is not included as one of Porter's three generic strategies?

A) Broad differentiation.
B) Supplier cost differentiation.
C) Focused strategy.
D) Broad cost leadership.

Question 46

Your boss,Kerry Miller,has asked you to analyze the soft drink industry using Porter's five-forces model.Which of the following represents a threat of a new entrant in the soft drink industry?

A) Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
B) Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in every Walmart store.
C) Zevia Natural Diet Soda begins selling directly over the Internet.
D) Vitamin water, fruit juice, and coffee.

Question 47

In the bookstore industry,some of today's businesses compete with different business strategies and cost strategies.Which of the following is using a broad market competitive scope along with a low cost strategy?

A) Amazon.com.
B) Any local independent bookstore that specializes in antique books.
C) Barnes & Noble.
D) Borders Books.

Question 48

Your boss,Ty Jacob,has asked you to analyze the music industry using Porter's five-forces model.Which of the following represents the threat of substitute products or services in the music industry?

A) Established record labels like EMI, Sony, and Universal.
B) Independent record labels.
C) Game systems like Wii and social networks like Facebook.
D) Taylor Swift, Beyonce, The Beatles, and The Rolling Stones.

Question 49

Your boss,Ty Jacob,has asked you to analyze the music industry using Porter's five-forces model.Which of the following represents buyer power in the music industry?

A) Established record labels like EMI, Sony, and Universal.
B) Walmart, Target, and iTunes.
C) Independent record labels.
D) Game systems like Wii and social networks like Facebook.

Question 50

Your boss,Kerry Miller,has asked you to analyze the soft drink industry using Porter's five-forces model.Which of the following represents supplier power in the soft drink industry?

A) Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
B) Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in every Walmart store.
C) Zevia Natural Diet Soda begins selling directly over the Internet.
D) Vitamin water, fruit juice, and coffee.

Question 51

If a business is following a focused strategy,then its competitive scope is ________.

A) Broad market.
B) Narrow market.
C) Broad range of products.
D) Broad range of services.

Question 52

Your boss,Ty Jacob,has asked you to analyze the music industry using Porter's five-forces model.Which of the following represents supplier power in the music industry?

A) Established record labels like EMI, Sony, and Universal.
B) Walmart, Target, iTunes.
C) Game systems like Wii and social networks like Facebook.
D) Taylor Swift, Beyonce, The Beatles, and The Rolling Stones.

Question 53

Amazon.com uses a customer-profiling system whenever a customer visits its website.Using this system,Amazon can offer products tailored to that particular customer's profile and buying pattern.What is Amazon using to achieve this competitive advantage?

A) Rivalry.
B) Buyer power.
C) Product differentiation.
D) Substitute product.

Question 54

Your boss,Kerry Miller,has asked you to analyze the soft drink industry using Porter's five-forces model.Which of the following represents rivalry in the soft drink industry?

A) Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
B) Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in every Walmart store.
C) Zevia Natural Diet Soda begins selling directly over the Internet.
D) Coke and Pepsi submit bids to the owner of a football stadium for the exclusive sale of their products during games.

Question 55

Which of the below is similar to focused strategy versus broad strategy?

A) Large market versus leadership.
B) Large market versus uniqueness.
C) Niche market versus large market.
D) Niche market versus generic.

Question 56

Which of the following offers an example of a company operating in a narrow,focused market operating as the low-cost provider?

A) Walmart.
B) Tiffany & Co.
C) Neiman Marcus.
D) Payless Shoes.

Question 57

Broad differentiation,broad cost leadership,and _________ are the three generic strategies identified by Porter.

A) Narrow market leadership
B) High cost versus low cost
C) Focused strategy
D) None of these

Question 58

According to Porter,companies that wish to dominate broad markets should operate using a ________ strategy.

A) Cost leadership with a low cost
B) Differentiation with a low cost
C) Cost leadership with a high cost
D) All of these

Question 59

Your boss,Kerry Miller,has asked you to analyze the soft drink industry using Porter's five-forces model.Which of the following represents a substitute product in the soft drink industry?

A) Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
B) Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in every Walmart store.
C) Zevia Natural Diet Soda begins selling directly over the Internet.
D) Vitamin water, fruit juice, and coffee.

Question 60

When applying Porter's three generic strategies,Tiffany & Co.has a competitive scope and cost strategy that is a __________.

A) Broad market, high cost strategy.
B) Narrow market, low cost strategy.
C) Narrow market, high cost strategy.
D) Broad market, low cost strategy.

Question 61

Business strategies that match _______ company competencies to opportunities result in a competitive advantage.

Question 62

Which of the following decisions does a firm need to make as soon as it has identified the activities from the value chain that are bringing the highest added value to their customers?

A) Target high value-adding activities to further enhance their value.
B) Target low value-adding activities to increase their value.
C) Perform some combination of the two.
D) All of these.

Question 63

What includes support-value activities and primary-value activities and is used to determine how to create the greatest possible value for customers?

A) Supplier power.
B) Operations management.
C) Porter's Five-Forces Model.
D) Value chain analysis.

Question 64

According to Porter's value chain analysis,which of the below provides customer support after the sale of goods and services?

A) Inbound logistics.
B) Outbound logistics.
C) Operations.
D) Service.

Question 65

MIS can add value to both primary and support activities within a business.Which of the following is not an example of a company adding value by the use of MIS in a support activity?

A) Netflix creating a business strategy for the video rental market that delivers videos via the mail.
B) The human resources department creates a tracking system to efficiently reward employees based on their performance.
C) Scottrade Corp. creating an online system for employees to track paychecks, benefits, their wellness-rewards program, and other employee benefit items.
D) The University of Forks creates a program to automatically order office supplies, such as pens and pads of paper, for its employees.

Question 66

Which of the below represents procurement as part of the support value activities in a value chain analysis?

A) Purchases inputs, such as raw materials, resources, equipment, and supplies.
B) Applies MIS to processes to add value.
C) Distributes goods and services to customers.
D) Promotes, prices, and sells products to customers.

Question 67

When evaluating the value chain,which of the following is included in the support value activities?

A) Inbound activities.
B) Marketing and sales.
C) Firm infrastructure.
D) Finance and sales.

Question 68

Sandy Fiero works as the Chief Knowledge Officer for Bend Lumbar Company.She has been given the responsibility to create a product or service that will bring an added value to its customers to increase the company's revenue.Sandy determines that the best value she can add is by creating a service that offers free next-day shipping on any order over $50.Where in the value chain is Sandy adding value?

A) The primary value activity outbound logistics.
B) The primary value activity inbound logistics.
C) The primary value activity marketing and sales.
D) The primary value activity operations.

Question 69

When evaluating the value chain,all of the following are included in the primary value activities except:

A) Inbound activities.
B) Operations.
C) Service.
D) MIS development.

Question 70

Your boss,Tom Repicci,has asked you to analyze the airline industry using Porter's three generic strategies.Which of the following companies are using a differentiation strategy?

A) Southwest, Horizon, Frontier, and JetBlue.
B) British Airways, Singapore Airlines, and Virgin Atlantic.
C) Sky Taxi, a rent-by-the-hour personal plane service.
D) All of these.

Question 71

The goal of value chain analysis is to identify processes in which the firm can add value for the customer and create a competitive advantage for itself,with a ________ or ________________.

A) Focused strategy, product differentiation
B) Focused strategy, cost advantage
C) Cost advantage, primary value activities
D) Cost advantage, product differentiation

Question 72

What are the two main categories in a value chain analysis?

A) Primary value activities and secondary value activities.
B) Primary value activities and support value activities.
C) Primary value activities and strengthening value activities.
D) None of these.

Question 73

What is the support value activity that hires employees and provides them with training and compensation?

A) Procurement.
B) Operations resource management.
C) Human resource management.
D) Firm infrastructure.

Question 74

MIS can add value to both primary activities and support activities in the value chain.Which of the following is not an example of a company adding value by using MIS in a primary activity?

A) Scottrade Corp. creating an online system for employees to track paychecks, benefits, the wellness-rewards program, and other employee benefit items.
B) A system for the sales and marketing departments to track specific sales targets and follow-up processes.
C) An easy electronic survey to be sent to the customer right after a service is completed.
D) Royal Crest Dairy placing their order and delivery system on an easily accessible Web portal so customers can track delivery status.

Question 75

Which of the following is not considered a category within the primary value activities in a value chain analysis?

A) Inbound logistics.
B) Firm infrastructure.
C) Operations.
D) Service.

Question 76

Your boss,Tom Repicci,has asked you to analyze the airline industry using Porter's three generic strategies.Which of the following companies are using a focused strategy?

A) Southwest, Horizon, Frontier, and JetBlue.
B) British Airways, Singapore Airlines, and Virgin Atlantic.
C) Sky Taxi, a rent-by-the-hour personal plane service.
D) All of these.

Question 77

Which of the following is not considered a category within the support value activities in a value chain analysis?

A) Technology development.
B) Outbound logistics.
C) Human resource management.
D) Firm infrastructure.

Question 78

Which of the following analyzes a company's business processes and is useful for determining how to create the greatest possible value for customers?

A) Product analysis.
B) Primary supplier power.
C) Value chain analysis.
D) Buyer chain analysis.

Question 79

What is a standardized set of activities that accomplishes a specific task?

A) Business strategy.
B) Business outcome.
C) Business process.
D) Knowledge process.

Question 80

Your boss,Tom Repicci,has asked you to analyze the airline industry using Porter's three generic strategies.Which of the following companies are using a cost leadership strategy?

A) Southwest, Horizon, Frontier, and JetBlue.
B) British Airways, Singapore Airlines, and Virgin Atlantic.
C) Sky Taxi, a rent-by-the-hour personal plane service.
D) All of these.