Question 1

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?

Accepted Answer

Buyer power in the music industry includes Walmart, Target, and iTunes, which purchase music from record labels to sell online and in their stores.

Question 2

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

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 3

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

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 McDonald's, (4) a dog-walking business, and (5) a coffee shop.

Question 4

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?

Accepted Answer

Supplier power in the soft-drink industry is represented by Pepsi.

Question 5

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?

Accepted Answer

Some industries' competition is much more intense than others.The retail grocery stores such as Kroger, Safeway, Albertson's, and Ralph's in the United States have fierce competition and similar programs to compete with each other.

Question 6

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

Accepted Answer

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

Question 7

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

Accepted Answer

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

Question 8

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?

Accepted Answer

Supplier power is one of Porter's Five Forces; it measures the suppliers' ability to influence the prices they charge for supplies (including materials, labor, and services).

Question 9

Which of the following represents a typical supply chain?

Accepted Answer

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

Question 10

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?

Accepted Answer

Product differentiation is an advantage that occurs when a company develops unique differences in its products with the intent to influence demand.

Question 11

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?

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 12

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?

Accepted Answer

Game systems like Wii and social networks offer alternatives or substitute products to purchasing music for a consumer.

Question 13

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

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 14

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

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 15

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

Accepted Answer

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

Question 16

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?

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 17

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

Accepted Answer

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

Question 18

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

Accepted Answer

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

Question 19

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?

Accepted Answer

An example of supplier power in the music industry includes established record labels like EMI, Sony, and Universal.

Question 20

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

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) the Department of Motor Vehicles.

Quiz 1: Management Information Systems: Business Driven MIS