Question 1

Supplier power tends to be lower when​

Accepted Answer

A) ​Suppliers are concentrated 
B) There are high costs to switching between suppliers 
C) Both A&B 
D) ​None of the above 
A) ​Suppliers are concentrated 
B) There are high costs to switching between suppliers 
C) Both A&B 
D) ​None of the above D

Question 2

​To decrease supplier power,the firm can

Accepted Answer

A) ​Increase rivalry among its suppliers 
B) Buy from multiple suppliers 
C) Both A&B 
D) ​None of the above 
A) ​Increase rivalry among its suppliers 
B) Buy from multiple suppliers 
C) Both A&B 
D) ​None of the above C

Question 3

​Rivalry among firms would tend to be high if

Accepted Answer

A) ​There is a small number of firms in the market 
B) There is a large number of firms in the market 
C) There is only one firm in the market 
D) ​None of the above 
A) ​There is a small number of firms in the market 
B) There is a large number of firms in the market 
C) There is only one firm in the market 
D) ​None of the above B

Question 4

​Which of the following is true according to the IO perspective?

Accepted Answer

A) ​Industry structure determines firm conduct which in turn determines firms' performance 
B) Industry structure determines firm performance which in turn determines firms' conduct 
C) Industry conduct determines firm structure which in turn determines firms' performance 
D) ​Industry performance determines firm conduct which in turn determines firms' structure 
A) ​Industry structure determines firm conduct which in turn determines firms' performance 
B) Industry structure determines firm performance which in turn determines firms' conduct 
C) Industry conduct determines firm structure which in turn determines firms' performance 
D) ​Industry performance determines firm conduct which in turn determines firms' structure

Question 5

​Porter's five forces portray

Accepted Answer

A) ​A zero-sum game 
B) A game where your profitability comes at the expense of someone else's 
C) The ability of market participants to create a larger total pie 
D) ​Only A&B 
A) ​A zero-sum game 
B) A game where your profitability comes at the expense of someone else's 
C) The ability of market participants to create a larger total pie 
D) ​Only A&B

Question 6

If a customer values good A at $15,and it costs the firm $10 to produce,the firm can increase its profits if​

Accepted Answer

A) ​Redesign the product such that it delivers $16 in customer value 
B) Redesign the production process so that the costs fall to $9 
C) One or both of the above 
D) ​None of the above 
A) ​Redesign the product such that it delivers $16 in customer value 
B) Redesign the production process so that the costs fall to $9 
C) One or both of the above 
D) ​None of the above

Question 7

​Supplier power tends to be low when

Accepted Answer

A) ​The supplier provides non-critical inputs 
B) The supplier provides homogenous inputs 
C) Both A&B 
D) ​None of the above 
A) ​The supplier provides non-critical inputs 
B) The supplier provides homogenous inputs 
C) Both A&B 
D) ​None of the above

Question 8

​Supplier Power
Nora's Nicest Knick Knacks has produces a variety of products sold as souvenirs.She started out printing local sayings on tee-shirts,
e.g. ,FDNY,and purchased plain tee-shirts from a single supplier.Since then,she has added coffee mugs,key chains,souvenirs spoons and many other items.For each of these,she has lined up one or more suppliers.How does the change in the sourcing of her inputs affect how much of the value she creates that she gets to capture?

Accepted Answer

Nora's purchases used to be concentrated

Question 9

​The industrial organization economics perspective locates the source of competitive advantage at the

Accepted Answer

A) ​Individual firm level 
B) Industry level 
C) Both a and b 
D) ​None of the above 
A) ​Individual firm level 
B) Industry level 
C) Both a and b 
D) ​None of the above

Question 10

Cost-reduction generates​

Accepted Answer

A) ​Increases in long-run profitability 
B) Increases in long-run profitability only if the cost reduction is difficult to imitate 
C) Decreases in long run profitability 
D) ​No change in profitability 
A) ​Increases in long-run profitability 
B) Increases in long-run profitability only if the cost reduction is difficult to imitate 
C) Decreases in long run profitability 
D) ​No change in profitability

Question 11

​One should be wary of consultants peddling best practices or secrets to success because

Accepted Answer

A) ​They have different incentives than you do 
B) Such best practices are public knowledge and easily duplicated 
C) These best practices can at best only provide temporary profitability 
D) ​All of the above 
A) ​They have different incentives than you do 
B) Such best practices are public knowledge and easily duplicated 
C) These best practices can at best only provide temporary profitability 
D) ​All of the above

Question 12

​If the stock price of a company is higher than the discounted value of its future earnings,

Accepted Answer

A) ​Buy the stock only if the company has a sustained competitive advantage 
B) Don't buy the stock,even if the company has a sustained competitive advantage 
C) Always buy the stock 
D) ​None of the above 
A) ​Buy the stock only if the company has a sustained competitive advantage 
B) Don't buy the stock,even if the company has a sustained competitive advantage 
C) Always buy the stock 
D) ​None of the above

Question 13

​Strategy is

Accepted Answer

A) ​The art of matching the resources and capabilities of a firm to the opportunities and risks in its environment 
B) Developing a resource for the company that is both rare and valuable to create competitive advantage 
C) Making sure that the resource developed is non-fungible to create a sustainable advantage 
D) ​All of the above 
A) ​The art of matching the resources and capabilities of a firm to the opportunities and risks in its environment 
B) Developing a resource for the company that is both rare and valuable to create competitive advantage 
C) Making sure that the resource developed is non-fungible to create a sustainable advantage 
D) ​All of the above

Question 14

​The resource based perspective indicates that firms exhibit different performances within the same industry because

Accepted Answer

A) ​Some firms have better resources than others 
B) Some firms have organizational structures that can be duplicated 
C) Some firms sell goods that have a more elastic demand 
D) ​Some firms sell goods that have a perfectly elastic demand 
A) ​Some firms have better resources than others 
B) Some firms have organizational structures that can be duplicated 
C) Some firms sell goods that have a more elastic demand 
D) ​Some firms sell goods that have a perfectly elastic demand

Question 15

​Low cost strategies are usually found in industries where

Accepted Answer

A) ​Products are not particularly differentiated 
B) Price competition tends to be fierce 
C) Both a and b 
D) ​None of the above 
A) ​Products are not particularly differentiated 
B) Price competition tends to be fierce 
C) Both a and b 
D) ​None of the above

Question 16

You operate a small poultry farm in east Texas.You sell most of your output through a regional distributor of poultry products in the area.In this case,you are subject to​

Accepted Answer

A) ​Low buyer power 
B) High buyer power 
C) No buyer power 
D) ​All of the above 
A) ​Low buyer power 
B) High buyer power 
C) No buyer power 
D) ​All of the above

Question 17

​Supplier power tends to be high when

Accepted Answer

A) ​your firm purchases critical inputs from the supplier 
B) your input choices are highly differentiated 
C) Both A&B 
D) ​None of the above 
A) ​your firm purchases critical inputs from the supplier 
B) your input choices are highly differentiated 
C) Both A&B 
D) ​None of the above

Question 18

​If a customer values good A at $15,and it costs the firm $10 to produce,current profit per unit is

Accepted Answer

A) ​$10 
B) $8 
C) $5 
D) ​$1 
A) ​$10 
B) $8 
C) $5 
D) ​$1

Question 19

​One of the limitation of Five Forces is that they

Accepted Answer

A) ​Reduce producer surplus 
B) For one firm to increase profit,the profit of another participant must decrease 
C) Does not provide a firm with sustainable competitive advantage 
D) ​Both b and c 
A) ​Reduce producer surplus 
B) For one firm to increase profit,the profit of another participant must decrease 
C) Does not provide a firm with sustainable competitive advantage 
D) ​Both b and c

Question 20

​Firms have a competitive advantage when

Accepted Answer

A) ​They can deliver the same product benefits as their competitors but at a lower cost 
B) They can deliver superior product at a similar cost 
C) Both of the above 
D) ​None of the above 
A) ​They can deliver the same product benefits as their competitors but at a lower cost 
B) They can deliver superior product at a similar cost 
C) Both of the above 
D) ​None of the above

Supplier power tends to be lower when

To decrease supplier power,the firm can

Rivalry among firms would tend to be high if

Which of the following is true according to the IO perspective?

Porter's five forces portray

If a customer values good A at $15,and it costs the firm $10 to produce,the firm can increase its profits if

Supplier power tends to be low when

The industrial organization economics perspective locates the source of competitive advantage at the

Cost-reduction generates

One should be wary of consultants peddling best practices or secrets to success because

If the stock price of a company is higher than the discounted value of its future earnings,

Strategy is

The resource based perspective indicates that firms exhibit different performances within the same industry because

Low cost strategies are usually found in industries where

You operate a small poultry farm in east Texas.You sell most of your output through a regional distributor of poultry products in the area.In this case,you are subject to

Supplier power tends to be high when

If a customer values good A at $15,and it costs the firm $10 to produce,current profit per unit is

One of the limitation of Five Forces is that they

Firms have a competitive advantage when

The One Lessor of Business

Benefits, Costs, and Decisions

Extent How Much Decisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long Run Equilibrium

Foreign Exchange, Trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

Exam 9: Strategy: the Quest to Keep Profit From Eroding