Chapter 2

Which of the following describes suppliers in a position of strong bargaining power? a) coffee planters during a season of frost that decreases production b) domestic suppliers of corn in the event of removal of import duties on corn c) providers of logistic support when fuel prices have been reduced d) temporary part-time gym instructor at a well-known gym

a) coffee planters during a season of frost that decreases production

Which of the following is a product implementation principle of competitive advantage? a) raise barriers to market entry b) enhance existing products or services c) establish alliances with other organizations d) lock in customers and buyers

b) enhance existing products or services

Substitutions may not be viable options for some industrial clients due to ________ or physical distance limitations. a) the lack of rival suppliers b) the lack of internal technical expertise c) the loss of customers d) the loss of investors

b) the lack of internal technical expertise

If a company chooses a focused-differentiation competitive strategy in the Porter's model, what is the main basis of their competitive strategy?

better product/service within an industry segment

________ includes general management, finance, accounting, legal, and government affairs. a) Human resources b) Research and development c) Firm infrastructure d) Operations management

c) Firm infrastructure

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 can capture the market with new and innovative services. d) They can lock in suppliers to gain a competitive advantage.

c) They can capture the market with new and innovative services.

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

sales and marketing

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 information systems (IS) by Jupiter Shop to lock in customers?

saving the delivery addresses

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

strategy

The bargaining power of a customer is weak if ________.

the availability of a substitute is limited

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

true

Establishing alliances with other organizations promotes product awareness.

true

If a value chain's margin is negative, the company must reduce the cost of the value chain.

true

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

true

Surplus of a product serves as an example of weak force for the bargaining power of suppliers.

true

The support activities in the generic value chain facilitate the primary activities and contribute only indirectly to the production, sale, and service of the product.

true

Ultimately, competitive strategy determines the structure, features, and functions of every information system.

true

The bargaining power of ________ is one of the five competitive forces in Porter's five forces model.

customers

Which of the following statements describes a customer service activity? a) receiving and storing materials b) transforming customers' inputs into the final product c) inducing buyers to purchase the product d) assisting customers with the use of the product

d) assisting customers with the use of the product

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

d) delivering products to consumers

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

false

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

false

Manufacturing systems avoid linkages to reduce inventory costs.

false

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

false

Raising barriers to market entry is a product implementation principle.

false

Support activities contribute directly to the production, sale, and service of the product.

false

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

false

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?

linkages