Question 1

According to Michael Porter, five industry forces determine an industry's overall attractiveness and potential for long-term profitability. Which of the following is one of those forces Porter identified?
A)existence of complementary products
B)organizational structure
C)existing benchmarks
D)span of management
E)bargaining power of suppliers

Accepted Answer

Michael Porter identified five industry forces that determine an industry's overall attractiveness and potential for long-term profitability. These five forces are: the bargaining power of suppliers, the bargaining power of buyers, the threat of new entrants, the threat of substitutes, and the intensity of competitive rivalry. Therefore, the correct answer is E, which refers to the bargaining power of suppliers.

Question 2

Which of the following is NOT one of the five industry forces that determine an industry's overall attractiveness and potential for long-term profitability?
A)character of the rivalry
B)existing complementary products
C)bargaining power of suppliers
D)threat of substitute products
E)bargaining power of buyers

Accepted Answer

The five industry forces that determine an industry's overall attractiveness and potential for long-term profitability are character of the rivalry, bargaining power of suppliers, threat of substitute products, bargaining power of buyers, and the threat of new entrants. Existing complementary products are not included as one of the industry forces.

Question 3

Cost leadership, differentiation, and focus are the three types of ____ strategies discussed in the text.
A)grand
B)niche
C)positioning
D)restructuring
E)portfolio

Accepted Answer

The answer of Cost leadership, differentiation, and focus are the...

Question 4

According to Harvard professor Michael Porter, five industry forces (character of rivalry, threat of new entrants, threat of substitute products or services, bargaining power of suppliers, and the bargaining power of buyers)determine an industry's overall attractiveness and its ____.
A)potential for long-term change
B)potential for short-term profitability
C)level of risk
D)potential for long-term profitability
E)potential for short-term growth

Accepted Answer

According to the statement, the five industry forces determine an industry's overall attractiveness and potential for long-term profitability.

Question 5

Glassmaker AFG Industries positions itself as the primary supplier of glass used in microwave doors, shower doors, and patio tables. What type of a positioning strategy does the glass manufacturer use?
A)adaptive
B)growth
C)diversification
D)differentiation
E)focus

Accepted Answer

Focus strategy is defined as the positioning strategy of using cost leadership or differentiation to produce a specialized product or service for a limited, specially targeted group of customers in a particular geographic region or market segment. AFG is pursuing differentiation in a segment of the glass materials industry.

Question 6

In an attempt to stop declining profitability, ICI, a British chemical company, deleted petrochemical products from its production and concentrated on specialty chemicals, a less capital-intensive, less cyclical business. If ICI is successful in making the needed changes, it will more than likely implement a ____ strategy.
A)harvesting
B)revitalization
C)diversification
D)revival
E)recovery

Accepted Answer

The recovery strategy is defined as the strategic actions taken after retrenchment to return to a growth strategy.

Question 7

An industry-level strategy that is best suited to changes in the organization's external environment is a(n)____.
A)positioning
B)differentiation
C)growth
D)adaptive
E)diversification

Accepted Answer

An adaptive industry-level strategy is best suited to changes in the organization's external environment as it involves the organization adapting and changing its strategies, structures, and operations to respond to changes in the external environment. This allows the organization to remain competitive and relevant in the face of changing market conditions, technologies, and customer preferences. Other strategies, such as positioning, differentiation, growth, and diversification may not necessarily be as effective in responding to external changes and may not address the root causes of the changes.

Question 8

The positioning strategy that is always paired with one of the other two positioning strategies to produce a specialized product or service is ____.
A)focus
B)differentiation
C)cost leadership
D)diversification
E)repositioning

Accepted Answer

Focus is characterized by its emphasis on a limited range of products or a more narrow segment of the market. Focus strategies may be pursued through cost leadership or differentiation.

Question 9

Because of slowing sales, Arm & Hammer started promoting innovative uses for its baking soda. By searching for new market opportunities, the manufacturer of Arm & Hammer is using which type of adaptive strategy?
A)defending
B)cost leading
C)analyzing
D)reacting
E)prospecting

Accepted Answer

By searching for new market opportunities, Arm & Hammer is using a prospecting adaptive strategy.

Question 10

A(n)____ strategy is a corporate strategy that addresses the question "How should we compete in this industry?"
A)corporate-level
B)industry-level
C)firm-level
D)niche-specific
E)SBU-level

Accepted Answer

An industry-level strategy is specifically focused on how a company should compete in a particular industry. Corporate-level strategies focus on overall scope and direction of the company and its various business units, while firm-level strategies focus on specific functional areas within a company. Niche-specific strategies are focused on a specific customer segment or product offering, while SBU-level strategies are focused on individual strategic business units within the larger company.

Question 11

If successful, which strategy is often followed by a growth strategy?
A)retrenchment
B)stability
C)portfolio
D)focus
E)differentiation

Accepted Answer

A retrenched firm typically needs to return to a growth strategy in order to maintain or regain a favorable competitive position.

Question 12

An ad for a major brand of clothes washer reads, "Since our humble beginnings back in 1950, we have been dedicated to building machines with superior cleaning power, reliability, and style." This manufacturer is more than likely using which kind of positioning strategy?
A)differentiation
B)retrenchment
C)diversification
D)focus
E)stability

Accepted Answer

The ad emphasizes the brand's superior cleaning power, reliability, and style, indicating that they are positioning themselves as a high-quality, premium option in the market. This is consistent with a differentiation strategy, which focuses on highlighting unique features or benefits to distinguish a brand from competitors.

Question 13

Hohner is a company that manufactures and markets harmonicas, a product with a steady demand rate. It is so successful at what it does that the company controls 85 percent of the world's harmonica industry. In terms of the adaptive strategies, Hohner would most likely be categorized as a(n)____.
A)reactor
B)diversifier
C)stabilizer
D)analyzer
E)defender

Accepted Answer

Hohner's dominant market position and steady demand for their product indicate that they are most likely using a defender adaptive strategy, focusing on defending their position in the market instead of exploring new opportunities or diversifying their product line.

Question 14

Among companies who use the adaptive strategies, ____ blend the strategies used by ____.
A)prospectors; analyzers and reactors
B)analyzers; defenders and reactors
C)reactors; prospectors and analyzers
D)reactors; defenders and prospectors
E)analyzers; defenders and prospectors

Accepted Answer

Companies that use adaptive strategies often blend the strategies used by defenders, prospectors, and analyzers. However, the best choice that fits this description is option E, as it specifically mentions the blending of the strategies used by analyzers, defenders, and prospectors.

Question 15

Significant cost reductions, layoffs of employees, closing of poorly performing stores, offices, or manufacturing plants, or closing or selling entire lines of products or services would be characteristic of a ____ strategy.
A)portfolio
B)retrenchment
C)stability
D)firm-level
E)grand

Accepted Answer

The described actions are all part of a retrenchment strategy, which entails cutting back on business operations during difficult times in order to become more financially stable.

Question 16

Clorox Corporation controls 60 percent of the bleach market. Imagine you are an entrepreneur who was considering developing and marketing a new brand of bleach. Which of Michael Porter's industry forces should you be most concerned about?
A)bargaining power of buyers
B)threat of substitute products or services
C)threat of new entrants
D)bargaining power of suppliers
E)character of the rivalry

Accepted Answer

New entrants in mature industries often face stiff rivalry from established companies.

Question 17

When the bargaining power of suppliers and buyers is high, companies in the industry will ____.
A)find it more difficult to be profitable
B)most likely use a growth strategy
C)divest themselves of all of their cash cows
D)engage in organizational restructuring
E)not own any stars

Accepted Answer

High bargaining power of suppliers and buyers means that these stakeholders have more leverage to negotiate favorable terms and pricing, which can decrease the profitability of companies in the industry.

Question 18

____ is the measure of the intensity of competitive behavior between companies in an industry.
A)Character of culture
B)Competitive barrier
C)Character of the rivalry
D)Benchmarked rivalries
E)Product substitutability

Accepted Answer

Character of the rivalry is the measure of the intensity of competitive behavior between companies in an industry. This includes factors such as pricing strategies, advertising campaigns, and product differentiation.

Question 19

The positioning strategies identified by Michael Porter are ____.
A)entrepreneurial, growth, and stability
B)diversification, acquisition, and divestment
C)defender strategy; diversification, and cost leadership
D)focus, cost leadership, and differentiation
E)divestment; cost leadership, and diversification

Accepted Answer

Michael Porter identified three main positioning strategies: focus, cost leadership, and differentiation.

Question 20

When The Home Depot opened stores in Canada, it ran a series of ads featuring an animated hammer that showed that the U.S.-based home improvement store had the lowest prices. According to Michael Porter, which of the following positioning strategies did The Home Depot adopt to deal with existing Canadian stores that sold similar products?
A)cost leadership
B)diversification
C)focus
D)differentiation
E)repositioning

Accepted Answer

The Home Depot adopted a cost leadership strategy by emphasizing its low prices in its advertising to compete with existing Canadian stores that sold similar products. This means that they were focusing on providing the lowest cost products to attract customers away from competitors.

Quiz 5: Organizational Strategy

According to Michael Porter, five industry forces determine an industry's overall attractiveness and potential for long-term profitability. Which of the following is one of those forces Porter identified?

Which of the following is NOT one of the five industry forces that determine an industry's overall attractiveness and potential for long-term profitability?

Cost leadership, differentiation, and focus are the three types of ____ strategies discussed in the text.

According to Harvard professor Michael Porter, five industry forces (character of rivalry, threat of new entrants, threat of substitute products or services, bargaining power of suppliers, and the bargaining power of buyers) determine an industry's overall attractiveness and its ____.

Glassmaker AFG Industries positions itself as the primary supplier of glass used in microwave doors, shower doors, and patio tables. What type of a positioning strategy does the glass manufacturer use?

An industry-level strategy that is best suited to changes in the organization's external environment is a(n) ____.

The positioning strategy that is always paired with one of the other two positioning strategies to produce a specialized product or service is ____.

Because of slowing sales, Arm & Hammer started promoting innovative uses for its baking soda. By searching for new market opportunities, the manufacturer of Arm & Hammer is using which type of adaptive strategy?

A(n) ____ strategy is a corporate strategy that addresses the question "How should we compete in this industry?"

If successful, which strategy is often followed by a growth strategy?

An ad for a major brand of clothes washer reads, "Since our humble beginnings back in 1950, we have been dedicated to building machines with superior cleaning power, reliability, and style." This manufacturer is more than likely using which kind of positioning strategy?

Hohner is a company that manufactures and markets harmonicas, a product with a steady demand rate. It is so successful at what it does that the company controls 85 percent of the world's harmonica industry. In terms of the adaptive strategies, Hohner would most likely be categorized as a(n) ____.

Among companies who use the adaptive strategies, blend the strategies used by .

Significant cost reductions, layoffs of employees, closing of poorly performing stores, offices, or manufacturing plants, or closing or selling entire lines of products or services would be characteristic of a ____ strategy.

Clorox Corporation controls 60 percent of the bleach market. Imagine you are an entrepreneur who was considering developing and marketing a new brand of bleach. Which of Michael Porter's industry forces should you be most concerned about?

When the bargaining power of suppliers and buyers is high, companies in the industry will ____.

____ is the measure of the intensity of competitive behavior between companies in an industry.

The positioning strategies identified by Michael Porter are ____.