Deck 3: Strategy and Information Systems

Question 1

According to Porter's five forces model, a group of grain farmers in a surplus year will have reduced ________.

A)bargaining power
B)threat of substitutes
C)risk of rivalry
D)threat of new entrants

Answer 1

A

Question 2

Focused differentiation occurs when ________.

A)better service is provided within an industry segment
B)there is limited competition in an industry
C)customers, of a niche segment, are provided low-cost products
D)product quality improves across an entire industry

Answer 2

A

Question 3

Briefly explain Porter's five forces model.

Answer 3

Porter's five forces model is used to assess an industry structure. According to this model, five competitive forces determine industry profitability: bargaining power of customers, threat of substitutions, bargaining power of suppliers, threat of new entrants, and rivalry among existing firms. The intensity of each of the five forces determines the characteristics of the industry, how profitable it is, and how sustainable that profitability will be.

Question 4

According to Porter's five forces model, in which of the following situations would the supplier have the highest bargaining power?

A)a dealer of a patented material for smartphone manufacturers
B)a fashion designer catering to a niche market
C)a restaurant owner who serves only army veterans
D)a retailer who buys finished goods from many small suppliers

Question 5

Focused cost leadership is observed when a product has the lowest cost ________.

A)within an industry segment
B)across the product mix offered by a company
C)across the entire industry
D)among a group of competitors

Question 6

An automobile company decides to improve the quality of its products and bring more variety into its entire product line. The company has decided to adopt ________.

A)focused cost leadership
B)industry-wide differentiation
C)industry-wide cost leadership
D)focused differentiation

Question 7

Which of the following factors determines the structure, features, and functions of an information system used in a company?

A)the competitive strategy
B)the value of its brands
C)the size of the company
D)the number of competitors

Question 8

According to Porter's five forces model, a frequent traveler's choice of auto rental would be an example of a strong force for ________.

A)rivalry
B)threat of new entrants
C)threat of substitutions
D)bargaining power of customers

Question 9

Explain the relation between competitive strategies and information systems.

Question 10

The value chain of an organization determines its competitive strategy.

Question 11

Dynotrix Motors is a large car-manufacturing company. The company purchases raw material from many small-sized sellers across the globe. In this case, Dynotrix Motors is characterized by ________.

A)very low threat of substitute products
B)high bargaining power over its suppliers
C)very low threat of new entrants in the market
D)very high bargaining power over its customers

Question 12

An organization's goals and objectives are determined by its competitive strategy.

Question 13

A new drug that has shown promise in curing skin cancer has been discovered by a famous chemical laboratory. This is the only known drug effective for treatment of this disease. The laboratory obtains a patent for the product and decides to sell it. This situation is characterized by ________.

A)low threat of substitutions
B)high bargaining power of customers
C)high threat of new entrants
D)low bargaining power of suppliers

Question 14

A major drawback of Porter's five forces model is that it ignores the rivalry among firms in the industry.

Question 15

I-scream-4 Ice Cream recently faced competition against their flagship brand of "Orange peel ice cream." A competitor made significant in-roads into the market by offering three varieties of "Orange peel ice cream." I-scream-4 Ice Cream decided to counter this threat by introducing five new varieties of ice creams. Which competitive strategy is I-scream-4 Ice Cream implementing?

A)cost leadership
B)product differentiation
C)cost differentiation
D)service focus

Question 16

Porter's five forces model is used to assess ________.

A)industry structure
B)market share
C)internal competition
D)life cycles of products

Question 17

According to Porter's five forces model, in which of the following examples would rivalry be considered as a weak force affecting the market?

A)search engine designers
B)used car dealers
C)holiday tour agents
D)packaged food manufacturers

Question 18

According to Porter's five forces model, which of the following firms would be least affected by the threat of substitutes?

A)a used car dealership in New York
B)a convenience store that sells retail products
C)a firm that sells the only drug for a disease
D)a corner latte shop in Atlanta

Question 19

Bargaining power of customers is likely to be the highest for markets involving ________.

A)limited edition apparel
B)industrial products
C)patented drugs
D)vintage cars

Question 20

The automobile industry is characterized by many manufacturers and intense competition among them. According to Porter's five forces model, this statement illustrates ________.

A)low threat of substitutions
B)high bargaining power of suppliers
C)high levels of rivalry
D)low bargaining power of customers

Question 21

Identify the activity in the value chain that involves receiving and handling of raw materials and other inputs to the product.

A)inbound logistics
B)procurement
C)manufacturing
D)outbound logistics

Question 22

A retail company sells agricultural produce and consumer products. The company procures materials from farmers and local producers. This process is an example of ________.

A)outbound logistics
B)inbound logistics
C)operational management
D)internal marketing

Question 23

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

A)receiving and handling of raw materials and other inputs
B)negotiating prices with vendors
C)finding suitable vendors to supply raw materials
D)setting up contractual arrangements with various suppliers

Question 24

According to Porter's four competitive strategy model, what are the four competitive strategies from which firms can choose?

Question 25

Cassandra runs a downtown boutique that sells customized clothes. One of her customers wishes to purchase a trench coat with a bejeweled clip. Cassandra contacts "Gems and Stones" and places an order for the clip. This activity can be classified under ________.

A)inbound logistics
B)operations
C)customer service
D)marketing

Question 26

Which of the following employees performs a support activity in the value chain?

A)Jackson is involved in the development of technological infrastructure.
B)Sofia is a member of the recruitment team.
C)Nathaniel is in charge of setting up contractual agreements with vendors.
D)Nora is a financial analyst who rates and gives investment advice.

Question 27

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

A)margin
B)turnover
C)revenue
D)profit

Question 28

The ________ created by Porter states that firms should create new, more efficient business processes that integrate the activities of all departments involved in a value chain.

A)Six Sigma methodology
B)product differentiation model
C)Lean Manufacturing method
D)business process design

Question 29

Which of the following value chain activities involves collecting, storing, and physically distributing the product to buyers?

A)inbound logistics
B)operations
C)customer service
D)outbound logistics

Question 30

Which of the following value chain activities involves inducing buyers to purchase a product and providing a means for them to do so?

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

Question 31

Porter defined value as the ________.

A)amount of money that a customer is willing to pay for an offering
B)extent of after-sale service provided to customers
C)perceived satisfaction of the customers and sellers after a transaction
D)actual money exchanged in return of a product/service

Question 32

Lynn, the manager of a transportation company, goes through the product delivery schedule. She assigns territories to each executive of the delivery team, and also contacts the fleet supervisor to arrange trucks for transportation. Which activity of the value chain is Lynn executing?

A)inbound logistics
B)marketing
C)sales
D)outbound logistics

Question 33

Which of the following paved the way for the creation of a business process design?

A)support activities
B)triggers
C)linkages
D)primary activities

Question 34

The difference between the total value added and the total costs incurred is called the ________ of the value chain.

A)actual value
B)total margin
C)total revenue
D)gross turnover

Question 35

Which of the following statements is consistent with the central idea of business process design?

A)Technology should be used to supplement the existing value chain.
B)Business processes should focus on improving individual functional systems.
C)Organizations should create new business processes instead of improving existing systems.
D)Technology should be used to modify and improve standard business processes.

Question 36

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

Question 37

A telecom service provider focusing on high-end users is following an industry-wide differentiation strategy.

Question 38

Which of the following value chain activities involves assisting users with handling of the products after sale, thus maintaining and enhancing the products' value?

A)inbound logistics
B)customer service
C)operations
D)outbound logistics

Question 39

Madison, the project manager of a sports apparel company, estimates that the demand for jogging shoes is likely to decline in the coming months. He advises the procurement department to order raw material accordingly to ensure minimum wastage. This intercommunication that facilitates smooth operations is called ________.

A)market research
B)outbound logistics
C)strategizing
D)linkages

Question 40

Which of the following statements best describes the role of operations in a value chain?

A)transforming inputs into the final products
B)collecting, storing, and distributing products to buyers
C)inducing buyers to purchase products and providing a means for them to do so
D)receiving, storing, and disseminating inputs to products

Question 41

In a manufacturing business, which of the following transforms finished goods into cash?

A)warehouse operations
B)manufacturing process
C)sales process
D)outbound logistics

Question 42

Neil creates an application which facilitates the easy storage and access of employee information like name, age, experience, and qualification for his organization. The application is an example of a(n)________.

A)repository
B)program
C)linkage
D)activity

Question 43

The primary activity of sales and marketing is the collection, storage, and physical distribution of the products to the buyers.

Question 44

Distinguish between the primary and support activities of a value chain.

Question 45

In the value chain, customer service is concerned with inducing buyers to purchase the product and providing a means for them to do so.

Question 46

The total margin of the value chain is the difference between the total value added and the total costs incurred.

Question 47

A(n)________ is a network of activities that generate worth by transforming inputs into outputs.

A)business process
B)competitive strategy
C)value chain
D)information system

Question 48

Which of the following defines a repository?

A)a backup plan of action in case of emergencies
B)a department devoted specifically for market research
C)a place where finished goods undergo a quality check before shipment
D)a collection of something, such as data or raw materials

Question 49

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

Question 50

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

Question 51

Explain the concept of business process design.

Question 52

In the inbound logistics activity of a value chain, the manufacturer receives, stores, and disseminates inputs to a product.

Question 53

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

Question 54

Briefly describe the concepts of value, margin, and value chain as defined by Porter.

Question 55

The cost of the business process is the sum of the cost of the inputs and the ________.

A)cost of the activities
B)cost of the outputs
C)value of the outputs
D)value of the products

Question 56

What are the various support activities in a value chain?

Question 57

A linkage is a network of activities that generate value by transforming inputs into outputs.

Question 58

Define the primary activities in a generic value chain.

Question 59

Support activities in a value chain include the processes of finding vendors, setting up contractual arrangements, and negotiating prices.

Question 60

Explain linkages with an example.

Question 61

Locking in customers by making it difficult or expensive for customers to move to another product is called establishing high ________.

A)entry barriers
B)switching costs
C)product standards
D)brand value

Question 62

The sales process involves sales and marketing as well as outbound logistics activities.

Question 63

________ is a means through which an organization can gain a competitive advantage through process implementations.

A)Establishing alliances
B)Creating new products
C)Enhancing products
D)Differentiating services

Question 64

FunText is a company that owns an app used for text messaging. It recently offered a six month membership extension, to its existing customers, without any additional charges. Which competitive strategy is FunText trying to implement in this scenario?

A)creation of a new service
B)product differentiation
C)locking in customers
D)locking in suppliers

Question 65

Streamtech, a manufacturer of automobiles, recently received a patent for an unmanned search boat. By doing this, Streamtech has ________.

A)created an entry barrier
B)introduced product differentiation
C)locked in its suppliers
D)reduced the cost of operations

Question 66

Organizations can lock in suppliers either by making it difficult to switch to another organization or by ________.

A)increasing the margin on their products
B)reducing investments in their supply chain
C)making it easy to work with the organization
D)reducing the bargaining power of consumers

Question 67

Which of the following principles of competitive advantage is associated with product implementations?

A)locking in customers
B)differentiating service offerings
C)locking in suppliers
D)establishing alliances

Question 68

What is a business process? How do you determine the cost and margin of a business process?

Question 69

An inventory of raw materials is an example of a repository.

Question 70

In a manufacturing business, the materials ordering process transforms cash into a raw materials inventory.

Question 71

Cooper, the owner of a small bicycle manufacturing company, is striving to keep his organization running smoothly while remaining profitable in a highly competitive market. Cooper chooses process implementation to give his company a competitive edge over others. Which of the following principles is he most likely to implement?

A)creating new products
B)enhancing services
C)reducing costs
D)differentiating products

Question 72

RAC Associates is a car rental company that rents cars to tourists in the United States. The company uses tracking devices and magnetic locks to prevent car theft. These procedures are examples of ________.

A)primary business processes
B)core activities
C)strategic activities
D)supporting business processes

Question 73

A large software manufacturer attempts to lock in customers by making it difficult for them to substitute their software with one from another company. The strategy used by the company is referred to as ________.

A)switching costs strategy
B)low cost operation strategy
C)standardization strategy
D)marketing strategy

Question 74

Hueblue Software, an application provider to the gaming industry, decided to enhance its portfolio by developing motion-control-enabled games for the mobile gaming industry. In this scenario, which competitive strategy is Hueblue Software implementing?

A)establishment of alliances
B)product differentiation
C)raising barriers to market entry
D)locking in buyers

Question 75

The cost of the business process is the cost of the inputs plus the cost of the outputs.

Question 76

The International Zoological club publishes a monthly magazine for zoology enthusiasts. Members are required to pay an initial fee to cover the first two years of the subscription when registering with the club. In this scenario, the International Zoological club is ________.

A)enhancing services
B)establishing alliances
C)locking in customers
D)standardizing the product

Question 77

The streamlining of business processes to increase margin is key to obtaining competitive advantage.

Question 78

Which of the following statements is true of business process designs?

A)Most process designs require people to work in new ways.
B)They do not involve the need to follow different procedures.
C)They should be accompanied by a change in management.
D)Process designs very rarely attract employee resistance.

Question 79

Each activity in a business process is a business function that receives inputs and produces outputs.

Question 80

As the purchasing manager of a company that designs costumes, Natalie orders yards of fabric in preparation for Halloween. Natalie's duties can be classified under the ________ category of a business process.

A)outbound logistics
B)marketing
C)operations
D)inbound logistics