Question 1

Demographic indicators are often better predictors of consumer behavior than psychographic indicators.

Accepted Answer

Demographic indicators, while useful for identifying broad market segments based on characteristics like age, gender, income, etc., do not account for the attitudes, interests, values, and lifestyles that psychographic indicators do, which often provide deeper insights into consumer behavior and preferences.

Question 2

Competitive advantage is the means by which the organization seeks to develop cost advantage or to differentiate itself from other organizations.

Accepted Answer

Competitive advantage is a strategic approach taken by organizations to either develop cost advantage or differentiate themselves from other organizations. This can be achieved through various means such as innovation, branding, quality, customer service, and more.

Question 3

Service area competitor analysis begins with assessing service area competitive dynamics.

Accepted Answer

The answer of Service area competitor analysis begins with assessing...

Question 4

For a health care organization that offers several service categories, it is necessary to conduct service area analyses only in the most important service category.

Accepted Answer

It is necessary to conduct service area analyses in all service categories offered by a health care organization to determine the demand, competition, and potential growth opportunities in each category. This allows the organization to make informed decisions about resource allocation, marketing strategies, and service development. Focusing solely on the most important category may lead to missed opportunities and a limited understanding of the market.

Question 5

One problem in performing competitor analysis is the tendency to be concerned only with the visible activities of competitors.

Accepted Answer

Competitors may also be engaging in covert activities or strategies that are not easily observable, such as forming alliances or acquiring new technology. Therefore, it is important to conduct a thorough analysis beyond just visible activities.

Question 6

The evaluation of competitors' strengths and weaknesses provides clues as to their future strategies and to areas where competitive advantage might be achieved.

Accepted Answer

Evaluating competitors' strengths and weaknesses allows a company to identify areas where they themselves can gain a competitive advantage and prepare for potential future strategies of their competitors.

Question 7

Members of a strategic group primarily compete with each other and do not compete with organizations outside their strategic group - even though there are other competitors outside the group that may offer similar products or services.

Accepted Answer

Members of a strategic group are organizations that operate in the same industry and have similar business models. They often compete with each other based on price, quality, innovation, etc. However, they do not typically compete with organizations outside their strategic group, as they have different business models and serve different customer segments. Therefore, the statement is true.

Question 8

The service area profile includes key competitively relevant economic, demographic, psychographic (lifestyle), and community health status indicators. Relevant economic indicators may include income distribution, major industries and employers, types of businesses and institutions, economic growth rate, seasonality of businesses, unemployment statistics,
and so on.

Accepted Answer

The statement correctly describes the contents of a service area profile, including economic, demographic, psychographic, and health status indicators. Relevant economic indicators, as listed, can help businesses understand the local market and competition.

Question 9

Among managers in the health care industry, there is no general agreement that an organized competitor intelligence system is necessary for survival.

Accepted Answer

Many managers in the health care industry recognize the importance of having a competitor intelligence system in order to stay competitive and survive in the market. However, there may be some who do not see it as a necessity.

Question 10

Misjudging how the industry, industry segments, or service area is defined will lead to poor competitor analysis.

Accepted Answer

Misjudging how the industry or service area is defined will lead to a flawed understanding of the competitive landscape, potentially overlooking key competitors or inaccurately analyzing the strengths and weaknesses of existing players.

Question 11

Critical success factor analysis involves the identification of all activities for a service category within a service area for which the organization must achieve a high level of performance if it is to be successful.

Accepted Answer

The answer of Critical success factor analysis involves the identification...

Question 12

Achieving economies of scale is the only means by which to build a cost advantage barrier to new entrants.

Accepted Answer

Economies of scale are a significant way to build a cost advantage, but firms can also use other strategies such as access to unique resources, cost innovations, and efficient supply chains to create barriers to entry.

Question 13

The service area is considered to be the geographic area surrounding the health care provider, from which it pulls the majority of its customers/patients.

Accepted Answer

The service area is defined as the geographic area from which a health care provider draws the majority of its customers/patients.

Question 14

The service area is NOT defined by customers' preferences and the health care providers that are available.

Accepted Answer

The service area is defined by customers' preferences and the health care providers that are available.

Question 15

Cost position is the extent to which it seeks the low-cost position through efficiency programs and cost-minimizing facilities and equipment.

Accepted Answer

Cost position refers to a company's strategy to achieve a low-cost position in the market by focusing on cost efficiency and minimizing expenses through various means such as efficient operations, cost-cutting measures, and investing in cost-minimizing facilities and equipment.

Question 16

It is well established that all health care executives perform effective competitor analysis.

Accepted Answer

While competitor analysis is an important aspect of strategic planning for health care organizations, it cannot be assumed that all health care executives perform it effectively. Competitor analysis requires specialized knowledge and skills, and not all executives may possess them.

Question 17

Service area structural analysis provides considerable insight into the attractiveness of an industry and provides a framework for understanding the competitive dynamics (the future viability of an industry).

Accepted Answer

Service area structural analysis can help evaluate the industry's attractiveness and the competitive dynamics, making it a valuable tool for forecasting the industry's future viability.

Question 18

Customer perceptions of the organization's service category are NOT an important determination for a beneficial service area competitor analysis.

Accepted Answer

Customer perceptions of the organization's service category are an important consideration for a beneficial service area competitor analysis as it helps to identify the strengths and weaknesses of the competitors, understand customer preferences and expectations, and develop strategies to differentiate the organization's services.

Question 19

Efficiency and low cost are NOT possible bases for achieving competitive advantage.

Accepted Answer

Efficiency and low cost can be significant factors in achieving competitive advantage. By minimizing costs, a company can offer lower prices to customers, which can attract more business and give the company a competitive edge over other firms in the market. Additionally, efficiently delivering goods or services can lead to increased customer satisfaction, which can also contribute to a competitive advantage.

Quiz 3: Service Area Competitor Analysis