Question 1

Dell's factories can assemble a complete PC in 3 minutes.With a build-to-order strategy at the heart of its business model, Dell's sales staff maintains close ties with customers.This approach represents which aspect of the Porter's five forces model?

Accepted Answer

A) rivalry among competitors 
B) bargaining power of buyers 
C) threat of substitute products 
D) threat of new entrants 
E) bargaining power of suppliers

Question 2

Maytag has been called "the Rolls-Royce of washers and dryers." Maytag markets Neptune, a high-tech machine, at a substantially higher than regular washer prices.This is an example of:

Accepted Answer

A) cost leadership. 
B) differentiation. 
C) cost focus. 
D) focused differentiation. 
E) consumer focus.

Question 3

The irony and paradox of the hypercompetition framework is that, in order to achieve a sustainable advantage, companies must seek a series of "unsustainable" advantages.Explain this statement using dynamic strategic interaction sequence.

Accepted Answer

The answer of The irony and paradox of the hypercompetition...

Question 4

In addition to the five forces model of industry competition, Michael Porter has developed a framework of so-called generic business strategies.Explain these generic strategies, describing their aims and application.

Accepted Answer

The answer of In addition to the five forces model...

Question 5

In the tech world, about 90% of the world's nearly one billion PCs run on Microsoft's operating systems and 80% use Intel's microprocessors.This represents which aspect of the Porter's five forces model?

Accepted Answer

A) bargaining power of suppliers 
B) bargaining power of buyers 
C) threat of substitute products 
D) rivalry among competitors 
E) threat of new entrants

Question 6

According to D'Aveni, in today's business environment, short product life cycles, short product design cycles, new technologies, and globalization undermine market stability; thereby an acceleration of competitive forces takes place.

Accepted Answer

A) True 
 B)False

Question 7

Rivalry among firms refers to all the actions taken by firms in the industry to improve their positions and gain advantage over each other.

Accepted Answer

A) True 
 B)False

Question 8

According to the generic strategy framework, cost leadership is a sustainable source of competitive advantage if barriers exist that prevent competitors from achieving the same low costs.

Accepted Answer

A) True 
 B)False

Question 9

Porter's four generic strategies for achieving competitive advantage are:

Accepted Answer

A) price determination, cost leadership, product differentiation, distribution savings. 
B) cost leadership, product differentiation, cost challenger, product challenger. 
C) price leadership, product differentiation, price challenger, cost differentiation. 
D) cost leadership, product differentiation, cost focus, focused differentiation. 
E) cost leadership, product differentiation, consumer differentiation, focused differentiation.

Question 10

Michael Porter's generic strategy framework is derived from the basic types of competitive advantage and the scope of the target market served.

Accepted Answer

A) True 
 B)False

Question 11

Jaguar produced so few cars that it couldn't get volume discounts from components suppliers.Jaguar managers sometimes could not even determine the "fair" price for a particular part.In terms of Porter's competitive forces framework, Jaguar's strategic disadvantage stemmed from low:

Accepted Answer

A) buyer power. 
B) supplier power. 
C) threat of new entrants. 
D) threat of substitute products. 
E) access to distribution channels.

Question 12

In Michael Porter's model, "buyers" refers to manufacturers (e.g., GM)and retailers (e.g.Wal-Mart), rather than consumers.

Accepted Answer

A) True 
 B)False

Question 13

According to strategy expert Richard D'Aveni, the actions taken by Swatch in the global watch industry illustrate hypercompetitive dynamic maneuvering in which arena?

Accepted Answer

A) cost/quality 
B) timing and know-how 
C) entry barriers 
D) deep pockets 
E) Olympics

Question 14

Hundreds of small companies such as Martin-Logan and Mark Levinson compete in the high-end audiophile segment of the consumer electronics industry.If analyzed in terms of Porter's generic strategies framework, such companies might be said to be pursuing competitive advantage via:

Accepted Answer

A) cost leadership. 
B) differentiation. 
C) cost focus. 
D) focused differentiation. 
E) consumer differentiation.

Question 15

"Active competition for demanding customers in the home market keeps companies under pressure to constantly innovate." This statement is an integral part of Hamel and Prahalad's concept of "strategic intent."

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not identified by Porter as one of the possible types of barriers to entry in an industry?

Accepted Answer

A) loose bricks 
B) switching costs 
C) economies of scale 
D) product differentiation 
E) access to distribution channels

Question 17

Microsoft and Intel are two companies that illustrate the concept of "bargaining power of suppliers" in Porter's five forces model of industry competition.

Accepted Answer

A) True 
 B)False

Question 18

Cost leadership advantage is based on a firm's position as the industry's low-cost leader in a broad market.

Accepted Answer

A) True 
 B)False

Question 19

According to Porter, the nature of the interaction between potential industry entrants, buyers, substitute products, suppliers, and rival firms determines:

Accepted Answer

A) whether or not the government will launch an antitrust investigation. 
B) the industry's profit potential in terms of long-run return on invested capital. 
C) whether a country can generate a balance of payments surplus. 
D) whether a country can create a comparative advantage in the production of differentiated products. 
E) whether a country can generate income by innovation.

Question 20

Product differentiation and brand loyalty "raise the bar" for would-be industry entrants who would be required to make substantial investments in research or advertising.

Accepted Answer

A) True 
 B)False

Exam 16: Strategic Elements of Competitive Advantage

Dell's factories can assemble a complete PC in 3 minutes.With a build-to-order strategy at the heart of its business model, Dell's sales staff maintains close ties with customers.This approach represents which aspect of the Porter's five forces model?

Maytag has been called "the Rolls-Royce of washers and dryers." Maytag markets Neptune, a high-tech machine, at a substantially higher than regular washer prices.This is an example of:

The irony and paradox of the hypercompetition framework is that, in order to achieve a sustainable advantage, companies must seek a series of "unsustainable" advantages.Explain this statement using dynamic strategic interaction sequence.

In addition to the five forces model of industry competition, Michael Porter has developed a framework of so-called generic business strategies.Explain these generic strategies, describing their aims and application.

In the tech world, about 90% of the world's nearly one billion PCs run on Microsoft's operating systems and 80% use Intel's microprocessors.This represents which aspect of the Porter's five forces model?

According to D'Aveni, in today's business environment, short product life cycles, short product design cycles, new technologies, and globalization undermine market stability; thereby an acceleration of competitive forces takes place.

Rivalry among firms refers to all the actions taken by firms in the industry to improve their positions and gain advantage over each other.

According to the generic strategy framework, cost leadership is a sustainable source of competitive advantage if barriers exist that prevent competitors from achieving the same low costs.

Porter's four generic strategies for achieving competitive advantage are:

Michael Porter's generic strategy framework is derived from the basic types of competitive advantage and the scope of the target market served.

Jaguar produced so few cars that it couldn't get volume discounts from components suppliers.Jaguar managers sometimes could not even determine the "fair" price for a particular part.In terms of Porter's competitive forces framework, Jaguar's strategic disadvantage stemmed from low:

In Michael Porter's model, "buyers" refers to manufacturers (e.g., GM)and retailers (e.g.Wal-Mart), rather than consumers.

According to strategy expert Richard D'Aveni, the actions taken by Swatch in the global watch industry illustrate hypercompetitive dynamic maneuvering in which arena?

Hundreds of small companies such as Martin-Logan and Mark Levinson compete in the high-end audiophile segment of the consumer electronics industry.If analyzed in terms of Porter's generic strategies framework, such companies might be said to be pursuing competitive advantage via:

"Active competition for demanding customers in the home market keeps companies under pressure to constantly innovate." This statement is an integral part of Hamel and Prahalad's concept of "strategic intent."

Which of the following is not identified by Porter as one of the possible types of barriers to entry in an industry?

Microsoft and Intel are two companies that illustrate the concept of "bargaining power of suppliers" in Porter's five forces model of industry competition.

Cost leadership advantage is based on a firm's position as the industry's low-cost leader in a broad market.

According to Porter, the nature of the interaction between potential industry entrants, buyers, substitute products, suppliers, and rival firms determines:

Product differentiation and brand loyalty "raise the bar" for would-be industry entrants who would be required to make substantial investments in research or advertising.