Question 1

In Michael Porter's five forces model of industry attractiveness, __________ is determined by barriers to entry such as economies of scale and brand loyalty.

Accepted Answer

The threat of new entrants is determined by barriers to entry such as economies of scale and brand loyalty. This means that if there are high barriers to entry, it makes it difficult for new companies to enter the industry and compete with existing players. Therefore, the threat of new entrants is lower.

Question 2

In Michael Porter's five forces model of industry attractiveness, __________ is determined by the degree of supplier concentration and substitute inputs.

Accepted Answer

In Michael Porter's five forces model, the bargaining power of suppliers is determined by the degree of supplier concentration and substitute inputs. This force assesses how much control suppliers have over pricing and terms of supply, and the extent to which they can drive up costs or reduce quality.

Question 3

For many years, Canadian retailer Zellers used the slogan "Where the lowest price is the law." Which one of Michael Porter's competitive strategies was Zellers using?

Accepted Answer

Zellers was using cost leadership strategy by emphasizing on offering the lowest prices.

Question 4

How can an organization develop strategic flexibility?

Accepted Answer

Strategic flexibility refers to an organization's ability to adjust and adapt its strategies to changing circumstances and environments. Having multiple alternatives when making strategic decisions is essential for developing strategic flexibility, as it allows the organization to choose the best alternative that can address the current situation effectively. Committing resources only after thorough planning and monitoring and evaluating past strategies are also essential elements of strategic flexibility, but having multiple alternatives is the best choice for the given options. Dependent of tried and tested perspectives from senior employees, and allowing employees to participate in decision-making may not necessarily ensure strategic flexibility.

Question 5

Which of the following is most likely to use Internet-based knowledge systems to provide rapid online responses to service requests from customers in a broad market?

Accepted Answer

Differentiators aim to provide unique and high-quality services to their customers. Leveraging Internet-based knowledge systems can help them achieve this by providing rapid online responses to service requests from customers in a broad market, thus enhancing their differentiation strategy. Cost leaders and focusers may not prioritize investing in such systems, while first movers and diversifiers may have different priorities altogether.

Question 6

Michael Porter proposes that some __________ are inherently more profitable than others.

Accepted Answer

Michael Porter's theory of competitive advantage holds that some industries are inherently more profitable due to factors such as barriers to entry, bargaining power of suppliers and buyers, threat of substitutes, and intensity of industry rivalry. Therefore, the correct answer is B) industries.

Question 7

The cost leadership strategy requires a firm to __________.

Accepted Answer

The cost leadership strategy focuses on achieving lower costs than competitors, which requires the firm to aggressively search out efficiencies in operations in order to reduce their overall costs.

Question 8

A differentiator might use e-business techniques to __________.

Accepted Answer

Using e-business techniques such as online customer service and real-time communication can help a differentiator provide faster response times to customers, which can set them apart from competitors.

Question 9

Claire's Fashions markets an inexpensive line of fashion jewellery that targets "tween" girls, aged 8 to 12. Claire's is using which of the following competitive strategies?

Accepted Answer

Claire's Fashions is using the cost leadership strategy as it markets an inexpensive line of fashion jewellery.

Question 10

Appliance maker Maytag states that its products are so reliable that its customers may never need a service call. For nearly 40 years, it has promoted this claim in advertisements featuring the legendary "Lonely Maytag Repairman." Which of the following is the primary source of Maytag's competitive advantage?

Accepted Answer

Maytag's claim of having reliable products and promoting it through its "Lonely Maytag Repairman" advertisements is an example of differentiation, as they are positioning themselves as a brand with superior quality and low maintenance requirements compared to their competitors.

Question 11

According to Michael Porter's competitive strategies framework, which of the following strategies seeks to offer unique products to a broad customer market?

Accepted Answer

The differentiation strategy seeks to offer unique products to a broad customer market, making the business stand out in the competition. The cost leadership strategy focuses on offering low-cost products to a broad customer market, while the focus strategy targets specific customer segments with unique products. "Stuck in the middle" refers to a lack of clear competitive strategy, and diversification involves expanding into new markets or products.

Question 12

Functional strategy directly supports the __________ strategy.

Accepted Answer

Functional strategy is developed to support the specific goals outlined in the business strategy. The business strategy outlines the competitive positioning and specific initiatives that a business will take to achieve its overall goals. Therefore, functional strategies support the implementation of these initiatives and are directly linked to the business strategy.

Question 13

Elegance Chocolatier supplies premium chocolates to five-star hotels and restaurants that cater exclusively to wealthy customers. Which of the following is the primary source of Elegance's competitive advantage?

Accepted Answer

Elegance Chocolatier's competitive advantage comes from its focus on differentiation. They provide premium chocolates to high-end hotels and restaurants catering to wealthy customers, which sets them apart from competitors who primarily focus on price or cost.

Question 14

A focuser might use e-business techniques to __________.

Accepted Answer

A focuser using e-business techniques would design niche websites to target specific groups with specific interests, aligning with their strategy to focus on a narrow market segment.

Question 15

Switching costs and buyer loyalty are examples of strategic forces that determine the __________.

Accepted Answer

The answer of Switching costs and buyer loyalty are examples...

Question 16

An organization that is unable to develop a competitive advantage based on one of Michael Porter's competitive strategies is termed __________.

Accepted Answer

Michael Porter's competitive strategies include differentiation, cost leadership, and focus. If an organization is unable to develop a competitive advantage based on any of these strategies and attempts to pursue all three simultaneously, it may become "stuck in the middle" and struggle to compete effectively. Therefore, the best choice is D.

Question 17

In Michael Porter's five forces model of industry attractiveness, __________ is determined by the industry growth rate, increasing or falling demand, and product differences.

Accepted Answer

The intensity of current competitive rivalry is influenced by factors such as industry growth rate, demand changes, and product differentiation, as these elements affect how fiercely companies compete within the industry.

Question 18

Kiva Systems, manufacturer of robots used in flexible automation systems, demonstrates the power of ________ by "teaching" its robots to dispose of used cardboard and to assist in gift wrapping for e-commerce warehouse fulfillment.

Accepted Answer

Design thinking is a human-centered approach to problem-solving that emphasizes understanding the user's needs and creating solutions that are both effective and desirable. In the case of Kiva Systems, design thinking was used to develop robots that are able to perform tasks that are typically done by humans, such as disposing of used cardboard and assisting in gift wrapping. This has allowed Kiva Systems to gain a competitive advantage by providing its customers with a more efficient and cost-effective way to fulfill their e-commerce orders.

Question 19

A cost leader might use e-business techniques to __________.

Accepted Answer

The answer of A cost leader might use e-business techniques...

Question 20

________ is the ability to recognize major eternal environmental changes.

Accepted Answer

Strategic flexibility is the ability to recognize and respond to major external environmental changes effectively.

Quiz 9: Managing Strategically