Deck 3: Organizational Strategy information Systems and Competitive Advantage

Question 1

Which of the following is true if the threat from substitutes is strong?

A) Customers are likely to switch to competitors' products.
B) Competitors' products are of a lower quality.
C) Competitors are yet to overcome the entry barriers.
D) Prices of competitors' products are higher.

Answer 1

A

Question 2

Porter's five competitive forces can be grouped into two types: forces related to ________ and forces related to supply chain bargaining power.

A) pricing
B) labor
C) competition
D) consumers

Answer 2

C

Question 3

The two strength factors that relate to all three competitive forces are ________ and customer loyalty.

A) employee unions
B) nature of products
C) customer satisfaction
D) switching costs

Answer 3

D

Question 4

Which of the following is true of new entrants?

A) They have strong customer loyalty.
B) They will have records on customers' purchase habits.
C) They are yet to develop relationships with suppliers.
D) They can lock in suppliers to gain a competitive advantage.

Question 5

In which of the following cases is the strength of competitive forces low?

A) when switching costs are high
B) when rival products are priced relatively low
C) when customer loyalty to the brand or company is low
D) when finding rival products is easy

Question 6

If customers perceive the benefits of an alternative to be similar to that of a product,then the ________.

A) switching cost is high
B) price of the product should be increased to retain market share
C) threat from the substitute is strong
D) customers' bargaining power decreases

Question 7

Simpson's Lawn Services decides to offer two free mowing services for all customers who booked garden landscaping in the fall: Which of the following forces is Simpson's Lawn Services addressing?

A) the control exercised by Acme Corp., who supplies Simpson's with lawn mowers
B) the power held by the landlord of the Simpson's office space
C) the threat posed by Roger's Landscapes, a new competitor
D) the bargaining power of the City Football Club who are Simpson's customers

Question 8

Which of the following statements describes a scenario in which the bargaining power of a supplier is strong?

A) Competitors' have decreased demand for raw materials.
B) The availability of raw materials is less.
C) The supplier has excess inventory.
D) There are many suppliers providing the same raw materials for comparable prices.

Question 9

In Porter's five factor model,each of the three competitive forces concerns the danger of ________.

A) suppliers favoring rival companies
B) customers taking their business elsewhere
C) investors refusing to back new projects
D) employees not working toward organizational goals

Question 10

The strength of bargaining power depends on the availability of substitutes and ________ compared to the size of suppliers or customers.

A) the amount of profit made annually
B) the relative size of the firm
C) the production capacity
D) the size of the employee union

Question 11

Which of the following competitive strategies does a company follow if it produces a uniquely formulated anti-ageing face cream targeted at women above the age of forty?

A) industry-wide low cost
B) industry-wide differentiation
C) focus low cost
D) focus differentiation

Question 12

Porter originally developed the five forces model to determine the ________.

A) potential profitability of an industry
B) nature of competitive industrial environments
C) reason why certain industries collapse
D) means by which to improve resource utilization

Question 13

A competitive strategy of an organization determines its ________.

A) industry rivals
B) short-term goals
C) value chains
D) structure

Question 14

A firm introduces a new range of laptops that concentrate on delivering good graphics performance: Which of the following competitive strategies has the firm adopted if these laptops have relatively low prices?

A) focus differentiation
B) focus low cost
C) industry-wide differentiation
D) industry-wide low cost

Question 15

Which of the following is an example of a competitive strategy employed by a firm?

A) increasing the price of its product when raw material prices increase
B) laying off staff in order to cut down costs during a recession period
C) advertising its products nationwide like its competitor organizations
D) launching a unique product targeted at a section of consumers

Question 16

The bargaining power of a customer is weak if ________.

A) the availability of a rival product is limited
B) the cost of switching to a substitute is low
C) competitors offer products with same benefits at lower prices
D) new entrants are offering a product that uses more recent technology

Question 17

An organization responds to the structure of its industry by choosing a ________ strategy.

A) competitive
B) growth
C) leadership
D) diversification

Question 18

Which of the following statements describes suppliers in a position of strong bargaining power?

A) coffee planters during a season of frost that decreases production
B) companies negotiating supplier contracts after taxes on raw materials have been reduced
C) providers of logistic support when fuel prices have been reduced
D) wholesalers declaring end-of-season sales

Question 19

A competitive strategy followed by an organization is derived from the ________ of its industry.

A) function
B) structure
C) profits
D) goals

Question 20

Which of the following groups' bargaining power is considered as one of the five competitive forces in Porter's five forces model?

A) investors
B) competitors
C) employees
D) customers

Question 21

Each stage of the value chain not only adds value to the product but also ________.

A) improves supplier relationships
B) accumulates costs
C) devalues the final product
D) attracts competitors

Question 22

Which of the following primary value chain activities induce buyers to purchase a product and provide a means for them to do so?

A) inbound logistics
B) sales and marketing
C) outbound logistics
D) operations/management

Question 23

A manufacturing system uses sales forecasts to plan production: It uses the production plan to determine raw material needs and then uses the material needs to schedule purchases: This ultimately leads to reduced inventory costs: Which of the following is being used to reduce the inventory cost?

A) linkages
B) margins
C) competitive strategy
D) support activities

Question 24

Which of the following statements is true of business processes?

A) Value chains are designed to implement business processes.
B) Value chain activities differ based on the business processes being used.
C) If a value chain's margin is negative, the costs of the value chain should be increased.
D) The processes implementing a value chain must create sufficient value to cover their costs.

Question 25

Which of the following is a product implementation principle of competitive advantage?

A) raise barriers to market entry
B) enhance products or services
C) establish alliances
D) lock in customers and buyers

Question 26

Which of the following is true of supporting activities?

A) Their contribution toward a product's value is negligible.
B) Their contributions to margin can be calculated easily.
C) Customer service is considered a supporting activity.
D) Negotiation of prices is considered a supporting activity.

Question 27

________ includes general management,finance,accounting,legal,and government affairs.

A) Human resources
B) Research and development
C) Firm infrastructure
D) Operations management

Question 28

Which of the following is least likely to be an outcome of organizations forming alliances with each other?

A) promotion of product awareness
B) development of market size
C) establishment of standards
D) increase in purchasing costs

Question 29

Which of the following statements describes a customer service activity?

A) receiving and storing materials
B) transforming inputs into the final product
C) inducing buyers to purchase the product
D) assisting with the use of the product

Question 30

Which of the following primary activities describes collecting,storing,and physically distributing products to buyers?

A) customer service
B) sales and marketing
C) outbound logistics
D) operations/management

Question 31

The difference between the value that an activity generates and the cost of the activity is called the ________.

A) equity
B) liability
C) overhead
D) margin

Question 32

Which of the following is a process implementation principle of competitive advantage?

A) creating a new product
B) enhancing a service
C) establishing alliances
D) differentiating a service

Question 33

A business that selects a differentiation strategy would ________.

A) add cost to an activity provided it has a positive margin
B) provide essential functions at lowest costs
C) imitate rival companies' strategy and products
D) always try to price its products' higher than its competitors' products

Question 34

Which of the following is true of a value chain?

A) Support activities facilitate the primary activities.
B) It consists of only primary activities.
C) It is specific to manufacturing industries.
D) It nullifies the importance of support activities.

Question 35

Which of the following strategies is also called establishing high switching costs?

A) increasing production
B) locking in suppliers
C) reducing costs
D) locking in customers

Question 36

Porter defined ________ as the amount of money that a customer is willing to pay for a resource,product,or service.

A) margin
B) profit
C) price
D) value

Question 37

According to Porter,to be effective,the organization's goals and activities must be consistent with the organization's ________.

A) structure
B) competitors
C) strategy
D) workforce

Question 38

Which of the following is a primary activity in the value chain?

A) process of finding vendors
B) setting up contractual arrangements
C) negotiating prices
D) delivering products to consumers

Question 39

According to Porter,the processes and systems in an organization pursuing differentiation strategy must ________ to avoid negative margins.

A) create sufficient value to cover their costs
B) provide products at lowest costs to customers
C) develop new technologies
D) increase procurement

Question 40

Porter's model of business activities includes ________,which are interactions across value activities.

A) linkages
B) evaluations
C) iterations
D) operations

Question 41

Competitive strategy determines an organization's value chain.

Question 42

The bargaining power of competitors is one of the competitive forces identified by Porter.

Question 43

A business that selects a differentiation strategy will always structure itself around least-cost activities.

Question 44

If the costs of switching to another vendor are high,then the strength of the competitive forces is low.

Question 45

Availability of substitutes plays a role in determining the bargaining power of suppliers.

Question 46

The difference between the value that an activity generates and the cost of the activity is called the margin.

Question 47

Porter originally developed the five forces model in order to understand organizations' competitive environment.

Question 48

The strength of bargaining power forces does not depend on the availability of substitutes.

Question 49

An organization can choose to either minimize cost or maximize differentiation to gain a competitive advantage.

Question 50

Procurement falls under the category of primary activities in a value chain.

Question 51

According to Porter,to be effective,an organization's goals and activities must be consistent with the organization's strategy.

Question 52

According to Porter's five forces model,a company is profitable if all the five competitive forces are strong.

Question 53

Organizations analyze the structure of their industry and use that analysis to formulate a competitive strategy.

Question 54

Jupiter Shop is an online store: Customers have to create an online account to purchase products: The purchased products are delivered free of cost: The address of delivery is stored,so that customers can choose the same address for future purchases: Jupiter Shop features seasonal discounts and exchange offers: It also accumulates redeemable points for regular shoppers: Which of the following statements describes the use of IS by Jupiter Shop to lock-in customers?

A) providing free home delivery
B) saving the delivery addresses
C) offering seasonal discounts
D) collecting feedback online

Question 55

Vendor knowledge and vendor relationships serve as a barrier to entry for new competitors.

Question 56

Focus differentiation is a strategy in which a product is unique and is used by a wide range of consumers.

Question 57

The three competitive forces in Porter's model concern the danger of customers taking their business elsewhere.

Question 58

Customer service falls under the category of supporting activities in a value chain.

Question 59

Typically,as an individual,a customer has substantial bargaining power over a large manufacturing industry.

Question 60

Porter's definition of technology is narrow because it only includes research and development.

Question 61

Two companies with the same value chain activities will have the same business processes.

Question 62

Porter's model of business activities includes linkages,which are interactions across value activities.

Question 63

A business with a cost strategy will add cost to an activity only as long as the activity has a positive margin.

Question 64

If a value chain's margin is negative,the company must make some change.

Question 65

No matter what competitive strategy is being used,the value chain activities remain the same.

Question 66

Firm infrastructure excludes general management,finance,accounting,legal,and government affairs.

Question 67

Raising barriers to market entry is a product implementation principle.

Question 68

Inbound and outbound logistics are the primary value generators in a service-oriented company.

Question 69

The support activities in the generic value chain facilitate the primary activities and contribute only indirectly to a product's value.

Question 70

An information system can be part of a product,but it cannot provide support for a product or service.

Question 71

A company uses the outbound logistics activity to deliver the finished product to a customer.

Question 72

Manufacturing systems avoid linkages to reduce inventory costs.

Question 73

Each value chain is supported by one or more business processes.

Question 74

Value chains exist in service-oriented companies.

Question 75

Receiving,storing,and disseminating inputs to a product is an operations function.

Question 76

Supporting activities are easier to calculate than primary activities.

Question 77

Business processes implement value chains or portions of value chains.

Question 78

Value chain analysis has a direct application to manufacturing businesses.

Question 79

Support activities are business functions that relate directly to the production of the organization's products or services.

Question 80

Each stage of the generic value chain accumulates costs and subtracts value from the product.