Test Bank Answers Identifying Competitive Advantages Ch2

Business Driven Technology, 8e (Baltzan)

Chapter 2 Identifying Competitive Advantages

1) A leadership plan that achieves a specific set of goals or objectives is a business strategy.

2) When a company is the first to market with a competitive advantage, it gains a particular benefit known as competitive intelligence.

3) To combat business challenges, leaders communicate and execute business strategies (from the Greek word stratus for army and ago for leading).

4) Businesses rarely need to update business strategies as the business environment remains relatively stable.

5) Increasing sales, decreasing costs, entering new markets, or developing new products or services are all examples of successful business strategies.

6) Increasing costs and decreasing sales are examples of business strategies.

7) A first-mover advantage is the process of gathering information about the competitive environment, including competitors' plans, activities, and products, to improve a company's ability to succeed.

8) FedEx created a first-mover advantage by developing its customer self-service software, which allows people to request parcel pickups, print mailing slips, and track parcels online.

9) A SWOT analysis will evaluate potential internal strengths, internal weaknesses, and external opportunities.

10) A SWOT analysis evaluates an organization's strengths, weaknesses, opportunities, and threats to identify significant influences that work for or against business strategies.

11) A SWOT analysis evaluates an organization's strengths, weaknesses, objectives, and threats.

12) A SWOT analysis evaluates an organization's strengths, worries, opportunities, and technologies to identify significant influences that work for or against business strategies.

13) In a SWOT analysis, strengths and weaknesses originate inside an organization, or internally. Opportunities and threats originate outside an organization, or externally, and cannot always be anticipated or controlled.

14) In a SWOT analysis, potential internal strengths are helpful when they identify all key strengths associated with the competitive advantage, including cost advantages, new and/or innovative services, special expertise and/or experience, proven market leader, and improved marketing campaigns.

15) In a SWOT analysis, potential internal weaknesses are harmful when they identify all key areas that require improvement. Weaknesses focus on the absence of certain strengths, including absence of an Internet marketing plan, damaged reputation, problem areas for service, outdated technology, and employee issues.

16) In a SWOT analysis, potential external opportunities are helpful when they identify all significant trends along with how the organization can benefit from each, including new markets, additional customer groups, legal changes, innovative technologies, population changes, and competitor issues.

17) In a SWOT analysis, potential external threats are harmful when they identify all threats or risks detrimental to your organization, including new market entrants, substitute products, employee turnover, differentiating products, shrinking markets, adverse changes in regulations, and economic shifts.

18) Competitive advantages provide the same product or service either at a lower price or with additional value that can fetch premium prices.

19) Mark Peterson identified the Porter's Five Forces Model which analyzes the competitive forces within a business environment.

20) Porter's Five Forces Model outlines the process for a sales strategy.

21) With the Five Forces Model, companies should watch the forces in the market. If the forces are strong, competition generally increases, and if the forces are weak, competition typically decreases.

22) There are many challenges to changing doctors, including transferring medical records and losing the doctor–patient relationship along with the doctor's knowledge of the patient's history. Changing doctors provides a great example of switching costs.

23) Supplier power is one of Porter's five forces and it measures the suppliers' ability to influence the prices they charge for supplies (including materials, labor, and services).

24) Polaroid had a unique competitive advantage for many years until it forgot to observe competitive intelligence. The firm went bankrupt when people began taking digital pictures. Polaroid provides a great example of Porter's supplier power.

25) Product differentiation occurs when a company develops unique differences in its products or services with the intent to influence demand.

26) Buyer power is the ability of buyers to affect the price they must pay for an item.

27) Rivalry among existing competitors refers to the ability of buyers to affect the price they must pay for an item.

28) The threat of substitute products or services refers to the power of customers to purchase alternatives.

29) The threat of substitute products or services refers to the power of competitors to enter a new market.

30) Tiffany & Company competes in the marketplace by offering high-cost custom jewelry. Tiffany & Company is following a broad market and cost leadership strategy.

31) Porter has identified three generic business strategies including focused, broad cost leadership, and switching strategy.

32) According to Porter's three generic strategies, Walmart is following a business strategy that focuses on broad market and low cost.

33) According to Porter it is recommended to adopt only one of the three generic strategies.

34) Buyer power is included as one of Porter's three generic strategies.

35) Value chain analysis views a firm as a series of business processes that each adds value to the product or service.

36) A standardized set of activities that accomplishes a specific task is called a supply chain component.

37) The value chain will group a company's activities into two categories: primary value activities and support value activities.

38) A business process is a standardized set of activities that accomplishes a specific task, such as processing a customer's order.

39) Primary value activities are standardized activities that accomplish a specific task, such as processing a customer's order.

40) Inbound logistics and operations are part of the primary value activities.

41) Inbound logistics and operations are part of the support value activities.

42) Firm infrastructure and human resource management are part of the primary value activities.

43) Firm infrastructure and human resource management are part of the support value activities.

44) Feedback is information that returns to its original transmitter and modifies the transmitter's actions. What would the original transmitter include?

A) Input, Transform, Output.

B) Input, Transform, Outnumber.

C) Output, Input, Performer.

D) Input, Process, Transform.

45) MIS is a business function. Which of the following does MIS perform to help aid the company in decision making and problem solving?

A) Moves information about people.

B) Moves processes across the company to improve systems.

C) Moves information about products.

D) All of the choices are correct.

46) In terms of system thinking, what is data entered in a computer?

A) Input

B) Output

C) Process

D) Feedback

47) In terms of system thinking, what controls to ensure correct processes?

A) Input

B) Output

C) Process

D) Feedback

48) In terms of system thinking, what is the resulting information from the computer program?

A) Input

B) Output

C) Process

D) Feedback

49) In terms of system thinking, what is the computer program that processes the data?

A) Input

B) Output

C) Process

D) Feedback

50) In terms of system thinking, what is input?

A) Data entered in a computer

B) Controls to ensure correct processes

C) The resulting information from the computer program

D) The computer program that processes the data

51) In terms of system thinking, what is output?

A) Data entered in a computer

B) Controls to ensure correct processes

C) The resulting information from the computer program

D) The computer program that processes the data

52) In terms of system thinking, what is feedback?

A) Data entered in a computer

B) Controls to ensure correct processes

C) The resulting information from the computer program

D) The computer program that processes the data

53) In terms of system thinking, what is process?

A) Data entered in a computer

B) Controls to ensure correct processes

C) The resulting information from the computer program

D) The computer program that processes the data

54) A system is a collection of parts that link to achieve a common purpose. Systems thinking is a way of monitoring ________.

A) The entire system.

B) A division within the sales role.

C) The executive team.

D) The company's competitors.

55) MIS can be an important enabler of business success and innovation. Which of the below statements is accurate when referring to MIS?

A) MIS equals business success and innovation.

B) MIS represents business success and innovation.

C) MIS is not a valuable tool that leverages talent.

D) MIS is a valuable tool that can leverage the talents of people who know how to use and manage it effectively.

56) What is a way of monitoring the entire system in a company, by viewing the multiple inputs being processed to produce outputs?

A) Feedback thinking.

B) Systems thinking.

C) Output management.

D) Operational thinking.

57) Which of the following statements is true?

A) MIS equals business success.

B) MIS equals business innovation.

C) MIS represents business success and innovation.

D) MIS enables business success and innovation.

58) What is the name of a company's internal computer department?

A) Management information systems (MIS)

B) Information systems (IS)

C) Information technology (IT)

D) All of the choices are correct

59) What are material items or products that customers will buy to satisfy a want or need?

A) Goods

B) Services

C) Production

D) Productivity

60) What are tasks performed by people that customers will buy to satisfy a want or need?

A) Goods

B) Services

C) Production

D) Productivity

61) What is the process where a business takes raw materials and processes them or converts them into a finished product for its goods or services?

A) Goods

B) Services

C) Production

D) Productivity

62) What is the rate at which goods and services are produced based upon total output given total inputs?

A) Goods

B) Services

C) Production

D) Productivity

63) What are goods?

A) Material items or products that customers will buy to satisfy a want or need

B) Tasks performed by people that customers will buy to satisfy a want or need

C) The process where a business takes raw materials and processes them or converts them into a finished product for its goods or services

D) The rate at which goods and services are produced based upon total output given total inputs

64) What are services?

A) Material items or products that customers will buy to satisfy a want or need

B) Tasks performed by people that customers will buy to satisfy a want or need

C) The process where a business takes raw materials and processes them or converts them into a finished product for its goods or services

D) The rate at which goods and services are produced based upon total output given total inputs

65) What is production?

A) Material items or products that customers will buy to satisfy a want or need

B) Tasks performed by people that customers will buy to satisfy a want or need

C) The process where a business takes raw materials and processes them or converts them into a finished product for its goods or services

D) The rate at which goods and services are produced based upon total output given total inputs

66) What is productivity?

A) Material items or products that customers will buy to satisfy a want or need

B) Tasks performed by people that customers will buy to satisfy a want or need

C) The process where a business takes raw materials and processes them or converts them into a finished product for its goods or services

D) The rate at which goods and services are produced based upon total output given total inputs

67) Cars, groceries, and clothing belong in which category?

A) Goods

B) Services

C) Production

D) Productivity

68) Teaching, waiting tables, and cutting hair belong in which category?

A) Goods

B) Services

C) Production

D) Productivity

69) Which of the following is considered a good?

A) Cars

B) Groceries

C) Clothing

D) All of the choices are correct

70) Which of the following is considered a service?

A) Teaching

B) Waiting tables

C) Cutting hair

D) All of the choices are correct

71) Which of the following is considered a good?

A) Cars

B) Teaching

C) Waiting tables

D) All of the choices are correct

72) Which of the following is considered a service?

A) Cars

B) Groceries

C) Cutting hair

D) All of the choices are correct

73) Which of the following is considered a good?

A) Milk and eggs

B) Managing a team

C) Selling groceries

D) All of the choices are correct

74) Which of the following is considered a service?

A) Selling groceries

B) Managing a team

C) Cutting hair

D) All of the choices are correct

75) The lettuce, tomatoes, patty, bun, and ketchup are included in which category of making a hamburger?

A) Input

B) Process

C) Output

D) All of the choices are correct

76) Cooking a patty and putting the ingredients together are included in which category of making a hamburger?

A) Input

B) Process

C) Output

D) All of the choices are correct

77) The actual hamburger is included in which category of making a hamburger?

A) Input

B) Process

C) Output

D) All of the choices are correct

78) Assume you are in the business of producing and selling hamburgers.  If you could produce more hamburgers with the same input what would happen to your productivity and profits assuming the price of your hamburgers remains the same?

A) Increase in productivity, decrease in profits

B) Increase in productivity, increase in profits

C) Decrease in productivity, decrease in profits

D) Decrease in productivity, increase in profits

79) Assume you are in the business of producing and selling t-shirts.  If you could produce more t-shirts with the same input what would happen to your productivity and profits assuming the price of your t-shirts remains the same?

A) Increase in productivity, decrease in profits

B) Increase in productivity, increase in profits

C) Decrease in productivity, decrease in profits

D) Decrease in productivity, increase in profits

80) Assume you are in the business of producing and selling cars.  If you could produce more cars with the same input what would happen to your productivity and profits assuming the price of your cars remains the same?

A) Increase in productivity, decrease in profits

B) Increase in productivity, increase in profits

C) Decrease in productivity, decrease in profits

D) Decrease in productivity, increase in profits

81) Which four elements are included in systems thinking?

A) Output, Process, Feedback, and Accounting.

B) Process, Output, Operations, and Accounting.

C) Input, Process, Output, and Feedback.

D) Input, Output, Sales, and Feedback.

82) MIS is a business function, like accounting or sales, which moves information about people, products, and processes across the company to facilitate decision making and problem solving. What does MIS stand for?

A) Management Information Strategy.

B) Management Intelligence System.

C) Management Information System.

D) Management Information Strategist.

83) Shelby Black runs a very successful hair salon in downtown Los Angeles. One of Shelby's tasks is to input positive and negative customer reviews into her computer system. What type of information is Shelby gathering?

A) Feedback.

B) Processing.

C) Output management.

D) Sales processing.

84) Which of the following is not a typical way that a company would duplicate a competitive advantage?

A) Acquiring the new technology.

B) Copying the business operations.

C) Hiring away key employees.

D) Carrying large product inventories.

85) When a company is the first to market with a competitive advantage, this is called a first-mover advantage. All of the following companies were first-movers except ________.

A) FedEx - online self-service software.

B) Apple - iPad.

C) Apple - iPod.

D) Microsoft - Bing Search Engine.

86) A first-mover advantage occurs when a company is the first to market with a competitive advantage. All of the following companies were first-movers except ________.

A) FedEx - online self-service software

B) Apple - iPad

C) Apple - iPod

D) Microsoft - Bing Search Engine

87) A business strategy achieves a specific set of goals which include ________.

A) Developing new products or services; attracting new competition

B) Increasing costs; attracting new competition

C) Entering new markets; developing new products or services

D) All of these

88) Which of the following is a tool a manager can use to analyze competitive intelligence and identify competitive advantages?

A) The three generic strategies.

B) The threat of substitute buyer power.

C) Differentiated costs.

D) Supplier loyalty.

89) Identifying competitive advantages can be difficult, which explains why most competitive advantages are typically

A) temporary.

B) satisfactory.

C) terminated.

D) unsuccessful.

90) Updating business strategies is a continuous undertaking as internal and external environments ________.

A) Become less competitive

B) Remain stagnant

C) Rapidly change

D) Become more consistent

91) Which of the following represents a reason why competitive advantages are typically temporary?

A) The competitor will hire away your key employees.

B) The competitor quickly seeks ways to duplicate your business operations.

C) The competitor will purchase new technology.

D) All of these.

92) What is a competitive advantage?

A) A product that an organization's customers place a lesser value on than similar offerings from a competitor.

B) A feature of a product or service on which customers place a lesser value than they do on similar offerings from a supplier.

C) A service that an organization's customers place a lesser value on than similar offerings from a supplier.

D) A feature of a product or service on which customers place a greater value than they do on similar offerings from competitors.

93) All of the following are common tools used in industry to analyze and develop competitive advantages, except ________.

A) Five Forces Model

B) Three Generic Strategies

C) Competitive analysis model

D) Value chain analysis

94) The process of gathering information about the competitive environment, including competitors' plans, activities, and products, to improve a company's ability to succeed is the definition of ________.

A) Feedback

B) Information

C) Competitive intelligence

D) Data

95) What is a person or group that has an interest or concern in an organization?

A) Stakeholder

B) Business strategy

C) Supplier

D) Partner

96) Which group of stakeholders' primary interests include reliable contracts, ethical materials handling, and responsible production?

A) Partners/Suppliers

B) Shareholders/Investors

C) Community

D) Government

97) Which group of stakeholders' primary interests include adhering to regulations/laws, increasing employment, and ethical taxation reporting?

A) Partners/Suppliers

B) Shareholders/Investors

C) Community

D) Government

98) Which group of stakeholders' primary interests include maximizing profits, growing market share, and high return on investment?

A) Partners/Suppliers

B) Shareholders/Investors

C) Community

D) Government

99) Which group of stakeholders' primary interests include exceptional customer service, high-quality products, and ethical dealings?

A) Partners/Suppliers

B) Shareholders/Investors

C) Community

D) Customers

100) Which group of stakeholders' primary interests include fair compensation, job security, and ethical conduct/treatment?

A) Employees

B) Shareholders/Investors

C) Community

D) Customers

101) Which group of stakeholders' primary interests include professional associations, ethical recycling, and increasing employment?

A) Employees

B) Shareholders/Investors

C) Community

D) Customers

102) A ________ features a product or service on which customers place a greater value than they do on similar offerings from competitors.

A) Competitive advantage

B) Competitor advantage

C) Power advantage

D) First mover advantage

103) Which of the following evaluates a project's position?

A) SWOT Analysis

B) The Five Forces Model

C) Value Chain Analysis

D) Three Generic Strategies

104) What is a SWOT analysis?

A) Evaluation of an organization's strengths, weaknesses, opportunities, and threats to identify significant influences that work for or against business strategies.

B) Analysis of the competitive forces within the environment in which a company operates to assess the potential for profitability in an industry.

C) View of a firm as a series of business processes, each of which adds value to the product or service.

D) Generic business strategies that are neither organization nor industry specific and can be applied to any business, product, or service.

105) What evaluates industry attractiveness?

A) SWOT Analysis

B) The Five Forces Model

C) Value Chain Analysis

D) Three Generic Strategies

106) What is Porter's Five Forces Model?

A) Evaluation of an organization's strengths, weaknesses, opportunities, and threats to identify significant influences that work for or against business strategies.

B) Analysis of the competitive forces within the environment in which a company operates to assess the potential for profitability in an industry.

C) View of a firm as a series of business processes, each of which adds value to the product or service.

D) Generic business strategies that are neither organization nor industry specific and can be applied to any business, product, or service.

107) Which business tool assists in executing business strategy?

A) SWOT Analysis

B) The Five Forces Model

C) Value Chain Analysis

D) Three Generic Strategies

108) What is a value chain analysis?

A) Evaluation of an organization's strengths, weaknesses, opportunities, and threats to identify significant influences that work for or against business strategies

B) Analysis of the competitive forces within the environment in which a company operates to assess the potential for profitability in an industry

C) View of a firm as a series of business processes, each of which adds value to the product or service

D) Generic business strategies that are neither organization nor industry specific and can be applied to any business, product, or service

109) Which strategy below helps an organization choose its business focus?

A) SWOT Analysis

B) The Five Forces Model

C) Value Chain Analysis

D) Three Generic Strategies

110) What are Porter's three generic strategies?

A) Evaluation of an organization's strengths, weaknesses, opportunities, and threats to identify significant influences that work for or against business strategies

B) Analysis of the competitive forces within the environment in which a company operates to assess the potential for profitability in an industry

C) View of a firm as a series of business processes, each of which adds value to the product or service

D) Generic business strategies that are neither organization nor industry specific and can be applied to any business, product, or service

111) What is included in a SWOT analysis?

A) Strengths, weaknesses, organizations, and technology.

B) Strengths, weaknesses, opportunities, and threats.

C) Success, willingness, opportunities, and technology.

D) Success, weaknesses, organizations, and threats.

112) Which of the following statements is correct when considering a SWOT analysis?

A) Strengths and weaknesses originate inside an organization.

B) Opportunities and threats originate inside an organization.

C) Strengths and threats originate inside an organization.

D) Opportunities and weaknesses organization outside an organization.

113) Which of the following statements is correct when considering a SWOT analysis?

A) Strengths and weaknesses originate outside an organization.

B) Opportunities and threats originate outside an organization.

C) Strengths and threats originate inside an organization.

D) Opportunities and weaknesses organization outside an organization.

114) Which of the following are included as potential internal strengths in a SWOT analysis that are helpful to an organization?

A) Core competencies, market leaders, cost advantages, excellent management.

B) Lack of strategic direction, obsolete technologies, lack of managerial talent, outdated product line.

C) Expanded product line, increase in demand, new markets, new regulations.

D) New entrants, substitute products, shrinking markets, costly regulatory requirements.

115) Which of the following are included as potential internal weaknesses in a SWOT analysis that are harmful to an organization?

A) Core competencies, market leaders, cost advantages, excellent management.

B) Lack of strategic direction, obsolete technologies, lack of managerial talent, outdated product line.

C) Expanded product line, increase in demand, new markets, new regulations.

D) New entrants, substitute products, shrinking markets, costly regulatory requirements.

116) Which of the following are included as potential external opportunities in a SWOT analysis that are helpful to an organization?

A) Core competencies, market leaders, cost advantages, excellent management.

B) Lack of strategic direction, obsolete technologies, lack of managerial talent, outdated, product line.

C) Expanded product line, increase in demand, new markets, new regulations.

D) New entrants, substitute products, shrinking markets, costly regulatory requirements.

117) Which of the following are included as potential external weaknesses in a SWOT analysis that are harmful to an organization?

A) Core competencies, market leaders, cost advantages, excellent management.

B) Lack of strategic direction, obsolete technologies, lack of managerial talent, outdated, product line.

C) Expanded product line, increase in demand, new markets, new regulations.

D) New entrants, substitute products, shrinking markets, costly regulatory requirements.

118) Where would you categorize strengths in a SWOT analysis?

A) Internal, helpful

B) Internal, harmful

C) External, helpful

D) External, harmful

119) Where would you categorize weaknesses in a SWOT analysis?

A) Internal, helpful

B) Internal, harmful

C) External, helpful

D) External, harmful

120) Where would you categorize opportunities in a SWOT analysis?

A) Internal, helpful

B) Internal, harmful

C) External, helpful

D) External, harmful

121) Where would you categorize threats in a SWOT analysis?

A) Internal, helpful

B) Internal, harmful

C) External, helpful

D) External, harmful

122) Which of the following describes a stakeholder?

A) A leadership plan that achieves a specific set of goals or objectives.

B) A feature of a product or service on which customers place a greater value.

C) A person or group that has an interest or concern in an organization.

D) Information about a competitive environment.

123) There are many different stakeholders found in an organization. Stakeholders drive business strategies, and depending on the stakeholder's perspective, the business strategy can change. Which of the following is a main concern for customers?

A) Exceptional customer service

B) Fair compensation

C) Professional associations

D) Reliable contracts

124) There are many different stakeholders found in an organization. Stakeholders drive business strategies, and depending on the stakeholder's perspective, the business strategy can change. Which of the following is a main concern for employees?

A) Exceptional customer service

B) Fair compensation

C) Professional associations

D) Reliable contracts

125) There are many different stakeholders found in an organization. Stakeholders drive business strategies, and depending on the stakeholder's perspective, the business strategy can change. Which of the following is a main concern for the community?

A) Exceptional customer service

B) Fair compensation

C) Professional associations

D) Reliable contracts

126) There are many different stakeholders found in an organization. Stakeholders drive business strategies, and depending on the stakeholder's perspective, the business strategy can change. Which of the following is a main concern for partners/suppliers?

A) Exceptional customer service

B) Fair compensation

C) Professional associations

D) Reliable contracts

127) There are many different stakeholders found in an organization. Stakeholders drive business strategies, and depending on the stakeholder's perspective, the business strategy can change. Which of the following is a main concern for the government?

A) Maximize profits

B) Adhere to regulations/laws

C) Exceptional customer service

D) Reliable contracts

128) There are many different stakeholders found in an organization. Stakeholders drive business strategies, and depending on the stakeholder's perspective, the business strategy can change. Which of the following is a main concern for shareholders/investors?

A) Maximize profits

B) Adhere to regulations/laws

C) Exceptional customer service

D) Reliable contracts

129) There are many different stakeholders found in an organization with common business interests. Depending on the stakeholder's perspective, the business strategy can change. Which of the following is not a main concern for shareholders/investors?

A) Maximize profits

B) Grow market share

C) Job security

D) High return on investment

130) What does a SWOT analysis do?

A) Evaluates an organization's strengths, weaknesses, objectives, and threats

B) Evaluates an organization's strengths, weaknesses, opportunities, and threats

C) Evaluates an organization's supporters, weaknesses, opportunities, and technology

D) Evaluates an organization's systems, warehouses, outputs, and technology

131) In a SWOT analysis, strengths and weaknesses originate ________ an organization.

A) Outside (externally)

B) Inside (internally)

C) Both "Outside (externally) and Inside (internally)"

D) None of these

132) In a SWOT analysis, opportunities and threats originate ________ an organization.

A) Inside (internally)

B) Outside (externally)

C) Both "Inside (internally) and Outside (externally)"

D) None of these

133) In a SWOT analysis, which of the following could you discover as potential internal strengths (helpful)?

A) Cost advantages

B) Damaged reputation

C) New markets

D) Competitor issues

134) In a SWOT analysis, which of the following could you discover as potential inner weaknesses (harmful)?

A) Cost advantages

B) Damaged reputation

C) New markets

D) Competitor issues

135) In a SWOT analysis, which of the following could you discover as potential external opportunities (helpful)?

A) Cost advantages.

B) Damaged reputation.

C) New markets.

D) Improved marketing campaigns.

136) Managers use four common tools to analyze competitive intelligence and develop competitive advantages. Which of the following is not one of these tools?

A) The three generic strategies

B) The Five Forces Model

C) First-mover advantage

D) SWOT analysis

137) The Mifflin Cable store in Buffalo is currently offering a fabulous marketing strategy for potential new cable and Internet customers. Mifflin Cable offers new customers who purchase a cable and Internet package a DVR, modem, and all other necessary equipment with a two year contract. In terms of Porter's Five Forces what is Mifflin Cable attempting to achieve with this marketing strategy?

A) Increase buyer power

B) Increase substitute products

C) Decrease supplier power

D) Decrease buyer power

138) Kelly Howard works for Beulah's Boutiques selling high-end jeans and purses. Clothing Retail Services is the current market leader in Kelly's city. Kelly has recently been approached by Scott Jeans Co. with an opportunity to run its corporate nationwide marketing and sales division. Kelly decides to jump at the opportunity! Scott Jeans is attempting to gain a competitive ________ by stealing its competitor's key employees.

A) Power

B) Entry barrier

C) Advantage

D) Loyalty

139) The banking industry has implemented several competitive advantages including ATM's, online bill pay services, and electronic statements. Of course, these competitive advantages were quickly duplicated by any competitor that wanted to remain in the banking industry. These were all examples of ________ competitive advantages.

A) Acquiring new technology products and services

B) Hiring new employees

C) Reducing expenses

D) Gaining invaluable feedback from customers

140) Michael Porter defined the Five Forces Model and the potential pressures that can hurt sales. Which of the following is not one of the potential pressures that can hurt sales?

A) Suppliers can drive down profits by charging more for supplies

B) New market entrants can steal potential investment capital

C) Substitute products can steal customers

D) Competition can steal customers

141) Toby Bertram is an incoming freshman at your college. Toby is frustrated by the cost of books, tuition, and expenses, and he also needs to purchase a rather expensive laptop. In an effort to save money, Toby begins a Facebook group finding other college students who need to purchase laptops. Soon, Toby's Facebook group has close to 100,000 students. Toby decides to collectively approach different computer companies to see if his group qualifies for a special discount. What business strategy is Toby using to purchase laptops?

A) Collecting business intelligence

B) Decreasing entry barriers

C) Purchasing a substitute product

D) Increasing buyer power

142) What are costs that make customers reluctant to switch to another product or service?

A) Support activities

B) Switching costs

C) Loyalty rewards

D) Value chain activities

143) Angela Lewis owns and operates one of the most successful local book stores in Buffalo, called The Bookworm. Each time a customer purchases their 10th book at The Bookworm, they receive a $5 off coupon. What is Angela attempting to create with her $5 off marketing program?

A) Reducing buyer power with a loyalty program

B) Increasing buyer power with a loyalty program

C) Decreasing supplier power with a differentiated product

D) Creating a substitute product

144) What includes all parties involved, directly or indirectly, in obtaining raw materials or a product?

A) Support chain

B) Supply chain

C) System chain

D) Supply choice

145) Which of the following represents a company in a supply chain?

A) Customer and competitor.

B) Supplier and competitor.

C) Knowledge worker and supplier.

D) Supplier and customer.

146) In the center of Porter's Five Forces Model is competition. Which of the following represents the four outer boxes?

A) Buyer power, systems power, threat of false entrants, and threat of substitute products or services

B) Buyer power, systems power, threat of new entrants, and threat of substitute products or services

C) Buyer power, supplier power, threat of new entrants, and threat of substitute products or services

D) Business power, supplier power, threat of new entrants, and threat of powerful services

147) Jim Novak is on the executive board for BioMed pharmaceuticals. The company produces the number one selling cancer fighting drug on the market. Due to its incredible success, BioMed pharmaceuticals has decided to increase the cost of the drug from $9 a pill to $16 a pill. Which force is BioMed pharmaceutical using to increase its drug price?

A) Supplier power

B) Buyer power

C) Threat of false entrants

D) Business power

148) What is one of the most common ways a company can decrease supplier power?

A) Charge lower prices.

B) Charge higher prices.

C) Use MIS to find and create alternative products.

D) Companies cannot impact supplier power.

149) If a supplier has high power, what can it do to influence its industry?

A) Charge higher prices.

B) Shift costs to industry participants.

C) Limit quality or services.

D) All of these.

150) How can a company reduce the threat of substitute products or services?

A) Market the product to less than 10 customers

B) Ignore competitive forces

C) Offer additional value through wider product distribution

D) Offer less value making the product far more generic and similar to the competition

151) Which one of Porter's five forces is high when it is easy for new competitors to enter a market and low when there are significant entry barriers to joining a market?

A) Threat of new entrants.

B) Threat of substitute products or services.

C) Threat of buyer power.

D) Supply chain competition.

152) Michael Helms is the CEO of Dunder Mountain, which is a retail store that sells camping, hunting , and sporting gear. Michael and his executive team are meeting to brainstorm new ideas on how to grow the business. One idea is to mimic a competitor's product that is attempting to sell a new product in a different industry. After performing a Porter's Five Forces analysis, Michael determines that all of the forces are high in this new industry. What should Michael do?

A) Explode into the market with an overflow of the product.

B) Contemplate other products to introduce at the same time in this new market.

C) Compare the competitor's prices and offer his product lower in this new market.

D) Not introduce the product because all five forces are strong and this would be a highly risky business strategy.

153) What is a feature of a product or service that customers have come to expect and entering competitors must offer the same if they want to survive?

A) Significant barrier

B) Entry barrier

C) Product differentiation

D) Entry chain

154) Which of the following represents a typical supply chain?

A) Company - Customers - Suppliers

B) Company - Suppliers - Customers

C) Suppliers - Company - Customers

D) Suppliers - Customers - Company

155) Imagine you are creating a new product to sell in an up-and-coming market. Which of the below statements indicates that it would be easy for you as the new entrants to compete in this market?

A) The threat of new entrants' force is high in the up-and-coming market.

B) The threat of new entrants' force is low in the up-and-coming market.

C) The threat of new entrants' force is impossible to define in the up-and-coming market.

D) All of these depending on the time of year.

156) Imagine you are creating a new product to sell in an up-and-coming market. Which of the following statements indicates that it would be difficult for you to enter this new market?

A) The threat of new entrants' force is high in the up-and-coming market

B) The threat of new entrants' force is low in the up-and-coming market

C) The threat of new entrants' force is high during the summer months in the up-and-coming market

D) All of these depending on the time of year

157) Which of the following offers an example where Porter's five forces are mostly strong and competition is high?

A) A dog walking business

B) A ski resort

C) A professional hockey team

D) All of these

158) Which of the following offers an example where Porter's five forces are mostly weak and competition is low?

A) An international hotel chain purchasing milk

B) A coffee shop

C) A single consumer purchasing milk

D) A dog walking business

159) Some industries' competition is much more intense than others. Retail grocery stores such as Kroger, Safeway, and Albertson's in the United States experience fierce competition and offer similar marketing campaigns to compete. What is this an example of in terms of Porter's Five Forces?

A) Rivalry among new entrants

B) Rivalry among existing competitors

C) Threat of substitute products or services

D) Buyer power

160) Amazon.com uses a customer profiling system whenever a customer visits its website. Using this system, Amazon can offer products tailored to that particular customer's profile and buying pattern. What is Amazon using to achieve this competitive advantage?

A) Rivalry

B) Buyer power

C) Product differentiation

D) Substitute product

161) Your boss, Pam Anderson, has asked you to analyze the music industry using Porter's Five Forces Model. Which of the following represents supplier power in the music industry?

A) Established record labels like EMI, Sony, Universal

B) Walmart, Target, iTunes

C) Game systems like Wii, social networks like Facebook

D) Taylor Swift, Beyoncé, The Beatles, The Stones.

162) Your boss, Pam Anderson, has asked you to analyze the music industry using Porter's Five Forces Model. Which of the following represents buyer power in the music industry?

A) Established record labels like EMI, Sony, Universal

B) Walmart, Target, iTunes

C) Independent record labels

D) Game systems like Wii, social networks like Facebook

163) Your boss, Pam Anderson, has asked you to analyze the music industry using Porter's Five Forces Model. Which of the following represents the threat of substitute products or services in the music industry?

A) Established record labels like EMI, Sony, Universal

B) Independent record labels

C) Game systems like Wii, social networks like Facebook

D) Taylor Swift, Beyoncé, The Beatles, The Stones

164) Your boss, David Ferrell, has asked you to analyze the soft drink industry using Porter's Five Forces Model. Which of the following represents supplier power in the soft drink industry?

A) Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.

B) Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in every Walmart store.

C) Zevia Natural Diet Soda begins selling directly over the Internet.

D) Vitamin water, fruit juice, and coffee are all beverage options available to consumers.

165) Your boss, David Ferrell, has asked you to analyze the soft drink industry using Porter's Five Forces Model. Which of the following represents buyer power in the soft drink industry?

A) Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.

B) Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in every Walmart store.

C) Zevia Natural Diet Soda begins selling directly over the Internet.

D) Vitamin water, fruit juice, and coffee are all beverage options available to consumers.

166) Your boss, David Ferrell, has asked you to analyze the soft drink industry using Porter's Five Forces Model. Which of the following represents a threat of a new entrant in the soft drink industry?

A) Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.

B) Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in every Walmart store.

C) Zevia Natural Diet Soda begins selling directly over the Internet.

D) Vitamin water, fruit juice, and coffee are all beverage options available to consumers.

167) Your boss, David Ferrell, has asked you to analyze the soft drink industry using Porter's Five Forces Model. Which of the following represents a substitute product in the soft drink industry?

A) Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.

B) Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in every Walmart store.

C) Zevia Natural Diet Soda begins selling directly over the Internet.

D) Vitamin water, fruit juice, and coffee are all beverage options available to consumers.

168) What is buyer power?

A) The ability of buyers to affect the price they must pay for an item.

B) The suppliers' ability to influence the prices they charge for supplies (including materials, labor, and services).

C) High when it is easy for new competitors to enter a market and low when there are significant entry barriers to joining a market.

D) High when there are many alternatives to a product or service and low when there are few alternatives from which to choose.

169) What is supplier power?

A) The ability of buyers to affect the price they must pay for an item

B) The suppliers' ability to influence the prices they charge for supplies (including materials, labor, and services)

C) High when it is easy for new competitors to enter a market and low when there are significant entry barriers to joining a market

D) High when there are many alternatives to a product or service and low when there are few alternatives from which to choose

170) What is threat of substitute products or services?

A) The ability of buyers to affect the price they must pay for an item

B) The suppliers' ability to influence the prices they charge for supplies (including materials, labor, and services)

C) High when it is easy for new competitors to enter a market and low when there are significant entry barriers to joining a market

D) High when there are many alternatives to a product or service and low when there are few alternatives from which to choose

171) What is threat of new entrants?

A) The ability of buyers to affect the price they must pay for an item

B) The suppliers' ability to influence the prices they charge for supplies (including materials, labor, and services)

C) High when it is easy for new competitors to enter a market and low when there are significant entry barriers to joining a market

D) High when there are many alternatives to a product or service and low when there are few alternatives from which to choose

172) What is rivalry among existing competitors?

A) The ability of buyers to affect the price they must pay for an item

B) The suppliers' ability to influence the prices they charge for supplies (including materials, labor, and services)

C) High when it is easy for new competitors to enter a market and low when there are significant entry barriers to joining a market

D) High when competition is fierce in a market and low when competitors are more complacent

173) Your boss, David Ferrell, has asked you to analyze the soft drink industry using Porter's Five Forces Model. Which of the following represents rivalry in the soft drink industry?

A) Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.

B) Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in every Walmart store.

C) Zevia Natural Diet Soda begins selling directly over the Internet.

D) Coke and Pepsi submit bids to the owner of a football stadium for the exclusive sale of their products during games.

174) Porter identified three generic strategies that a business could follow after identifying a market it wanted to enter. Which of the following is not included as one of Porter's three generic strategies?

A) Broad differentiation

B) Supplier cost differentiation

C) Focused strategy

D) Broad cost leadership

175) When analyzing Porter's three generic strategies for entering a market, if you have a focused strategy what market should you target?

A) A niche market

B) A broad market

C) Neither niche nor broad markets

D) Both niche and broad markets

176) Which of the following offers an example of a company operating in a narrow focused-market operating as the low-cost provider?

A) Walmart

B) Tiffany & Co.

C) Neiman Marcus

D) Payless Shoes

177) Broad differentiation, broad cost leadership, and ________ create the three generic strategies identified by Porter.

A) Narrow market leadership

B) High cost versus low cost

C) Focused strategy

D) None of these

178) Mindy Novak is writing a paper and he must determine which of Porter's three generic strategies Beulah's Boutiques has implemented. Mindy finds out that Beulah's Boutiques offers specialty products found only in boutiques around the world to affluent customers. What would Mindy determine Beulah's Boutiques is using as its generic strategy?

A) Broad market, low cost

B) Narrow market, high cost

C) Broad market, high cost

D) Narrow market, low cost

179) According to Porter, companies that wish to dominate broad markets should operate using a ________ strategy.

A) Cost leadership with a low cost

B) Differentiation with a low cost

C) Cost leadership with a high cost

D) All of these

180) Which of the following demonstrates a company that has implemented a low cost, broad market strategy?

A) Neiman Marcus

B) Payless Shoes

C) The Sharper Image

D) Walmart

181) If a business is following a focused strategy, then its competitive scope is ________.

A) Broad market

B) Narrow market

C) Broad range products

D) Broad range of services

182) When applying Porter's three generic strategies, Tiffany & Co. has a competitive scope and cost strategy that is ________.

A) Broad market - high cost strategy

B) Narrow market - low cost strategy

C) Narrow market - high cost strategy

D) Broad market - low cost strategy

183) When analyzing the book store industry, some of today's businesses compete with different business strategies and cost strategies. Which of the following is using a broad market competitive scope along with a low cost strategy?

A) Amazon.com

B) Any local independent book store that specializes in antique books

C) Barnes & Noble

D) Borders books.

184) Which of the following is similar to focused strategy versus broad strategy?

A) Large market versus leadership

B) Large market versus uniqueness

C) Niche market versus large market

D) Niche market versus generic.

185) Your boss, Penny Dirks, has asked you to analyze the airline industry using Porter's three generic strategies. Which of the following companies are using a cost leadership strategy?

A) Southwest, Horizon, Frontier, JetBlue.

B) British Airways, Singapore Airlines, Virgin Atlantic.

C) Sky Taxi – a rent by the hour personal plane service.

D) All of the choices are correct

186) Your boss, Penny Dirks, has asked you to analyze the airline industry using Porter's three generic strategies. Which of the following companies are using a differentiation strategy?

A) Southwest, Horizon, Frontier, JetBlue.

B) British Airways, Singapore Airlines, Virgin Atlantic.

C) Sky Taxi – a rent by the hour personal plane service.

D) All of the choices are correct.

187) Your boss, Penny Dirks, has asked you to analyze the airline industry using Porter's three generic strategies. Which of the following companies are using a focused strategy?

A) Southwest, Horizon, Frontier, JetBlue.

B) British Airways, Singapore Airlines, Virgin Atlantic.

C) Sky Taxi – a rent by the hour personal plane service.

D) All of the choices are correct.

188) When reviewing Porter's value chain analysis, which of the following provides customer support after the sale of goods and services?

A) Inbound logistics

B) Outbound logistics

C) Operations

D) Service

189) Which of the following represents procurement as part of the support value activities in a value chain analysis?

A) Purchases inputs such as raw materials, resources, equipment, and supplies

B) Applies MIS to processes to add value

C) Distributes goods and services to customers

D) Promotes, prices, and sells products to customers

190) What includes support value activities and primary value activities and is used to determine how to create the greatest possible value for customers?

A) Supplier power

B) Operations management

C) Porter's Five Forces Model

D) Value chain analysis

191) What is a standardized set of activities that accomplishes a specific task?

A) Business strategy

B) Business outcome

C) Business process

D) Knowledge process

192) Which of the following analyzes a company's business processes and is useful for determining how to create the greatest possible value for customers?

A) Product analysis

B) Primary supplier power

C) Value chain analysis

D) Buyer chain analysis

193) The goal of value chain analysis is to identify processes in which the firm can add value for the customer and create a competitive advantage for itself, with a ________ or ________.

A) Focused strategy, product differentiation

B) Focused strategy, cost advantage

C) Cost advantage, primary value activities

D) Cost advantage, product differentiation

194) What are the two main categories in a value chain analysis?

A) Primary value activities and secondary value activities

B) Primary value activities and support value activities

C) Primary value activities and strengthening value activities

D) None of these

195) Which of the following is not considered a category within the primary value activities in a value chain analysis?

A) Inbound logistics

B) Firm infrastructure

C) Operations

D) Service

196) Which of the following is not considered a category within the support value activities in a value chain analysis?

A) Technology development

B) Outbound logistics

C) Human resource management

D) Firm infrastructure

197) What is the support value activity that provides employees with training, hiring, and compensation?

A) Procurement

B) Operations resource management

C) Human resource management

D) Firm infrastructure

198) Todd Wallace works as the chief knowledge officer for Pennsylvania Lumber Company. He has been given the responsibility to create a product or service that will bring an added value to its customers to increase the company's revenue. Todd determines that the best value he can add is by creating a service that offers free next day shipping on any order over $50. Where in the value chain is Todd adding value?

A) The primary value activity outbound logistics

B) The primary value activity inbound logistics

C) The primary value activity marketing and sales

D) The primary value activity operations

199) When evaluating the value chain, all of the following are included in the primary value activities except ________.

A) Inbound activities

B) Operations

C) Service

D) MIS development

200) When evaluating the value chain, which of the following is included in the support value activities?

A) Inbound activities

B) Marketing and sales

C) Firm infrastructure

D) Finance and sales

201) Which of the following decisions does a firm need to make as soon as it has identified the activities from the value chain that are bringing the highest added value to their customers?

A) Target high value-adding activities to further enhance their value

B) Target low value-adding activities to increase their value

C) Perform some combination of the two

D) All of these

202) MIS can add value to both primary activities and support activities in the value chain. Which of the following is not an example of a company adding value by the use of MIS in a primary activity?

A) Scottrade Corp. creating an online system for employees to track paychecks, benefits, wellness rewards program, and other employee benefit items

B) A system for the sales and marketing departments to track specific sales targets and follow up processes

C) An easy electronic survey, similar to SurveyMonkey, to be sent to the customer right after a service was completed

D) Royal Crest Dairy using their custom order and delivery system through an easily accessible Web portal for the customer to track delivery status

203) MIS can add value to both primary and support activities within a business. Which of the following is not an example of a company adding value by the use of MIS in a support activity?

A) Netflix creating a business strategy for the video rental market that delivers videos via the mail

B) The human resources department creates a tracking system to efficiently reward employees based on their performance

C) Scottrade Corp. creating an online system for employees to track paychecks, benefits, wellness rewards program, and other employee benefit items

D) The University of Forks creates a program to automatically order office supplies such as pens and pads of paper for its employees

204) Explain why competitive advantages are temporary.

205) Describe Porter's Five Forces Model and explain each of the five forces.

206) Compare Porter's three generic strategies.