Question

1) Which of the following is NOT a value-creating activity associated with the differentiation strategy?

a. intensive training programs to improve employee efficiency

b. strong capability in new product development.

c. rapid and timely deliveries to customers.

d. procurement systems focused on finding the highest quality raw materials.

2) A certain marble quarry provides a unique type of marble that is richly colored and strikingly veined. It has been used for churches and public buildings throughout the world. The architect of a new headquarters for a prestigious Fortune 500 firm has specified the use of this marble, and this marble only, for this project. Which of the following statements is most likely to be true?

a. The cost of the marble will be expensive because of the bargaining power of the supplier.

b. The cost of the marble will be moderate because of the bargaining power of the buyer.

c. The cost of the marble will be moderate because of economies of scale.

d. The cost of the marble will be expensive because of the high strategic stakes involved.

3) The threat of new entrants is increased if:

a. access to distribution channels is hard to gain.

b. economies of scale in the industry are high.

c. product differentiation in the industry is low.

d. capital requirements in the industry are high.

4) A river barge company can offer cheaper, although slower, per pound transportation of products to companies when compared with transportation by air, truck, or rail. The river barge company should first target customers whose companies use

a. the integrated cost leadership/differentiation strategy.

b. either of the focus strategies.

c. the cost-leadership strategy.

d. any of the strategies except the focused differentiation strategy.

5) To have the potential to become sources of competitive advantage, resources and capabilities must be valuable, __________, and __________.

a. common, easy to imitate.

b. easy to imitate, difficult to implement.

c. rare, costly to imitate.

d. easy to implement, costly to imitate.

6) Primary activities in the value chain are:

a. the activities most likely to be imitated by competitors.

b. involved in a product's physical creation, its distribution, and its service after the sale.

c. the activities involved when companies are initially established.

d. the activities that the top management team most values.

7) Value chain analysis is a tool used to:

a. analyze a firm's external environment for value-creating opportunities.

b. concentrate on a firm's internal environment without exercising concern about the actions

of those companies with which the firm competes.

c. understand the parts of the firm's organization that create value and those that do not.

d. determine how long an opportunity in a firm's external environment can be expected to

last.

8) In 2012 Pets and Vets as Partners, a Philadelphia PA veterinary practice, added PetMedSpa, a pet weight loss and rehabilitation facility that included the most advanced orthopedic rehabilitation equipment within 80 miles. Pets and Vets also added new highly trained staff to run the Spa. By opening the Spa PVP seeks:

a. A competitive advantage

b. Competitive parity

c. To create an entry barrier for new veterinary practices providing boarding

d. To reduce the power of suppliers

9) Which of the following is/ are always true?

For a firm that is pursuing a network strategy, Delivering the most innovative and efficient technology over the competitors will ensure sustainable competitive advantages

Being a pioneer entails becoming a market-leader

Firms globally disperse their value chains for cost advantages only

Operational effectiveness only does not provide sustainable competitive advantage

a. 1 & 3

c. 1, 2, & 4

b. 4 only

d.2 & 4

10) Intensity of competition in an industry is usually the most powerful of the five forces. Threat of “destructive” competition in an industry is lower when

a. there are higher fixed costs

c. there are few switching costs

b. rivals compete on different dimensions

d. firms cannot exit the market easily

11) Mary, a teenager, gets $8 per hour for babysitting. Steven lives two doors down and turns 15 next month. Mary is worried that Steven may want to start earning extra money by babysitting, too, and may charge less money. This is a problem of:

a. bargaining power of suppliers

b. rivalry among existing firms

c. threat of new entrants

d. threat of substitutions

12) Southwest Airlines is known for its low fares. In fact, Southwest has lowered its cost base to the point that it is now cheaper to fly from Los Angeles to Phoenix than it is to take a bus or rent a car. The decline in Southwest’s cost structure affects the long distance bus industry (e.g. Greyhound) in terms of …..

a. higher competition within the industry

b. increasing threat of substitute

c. increasing threat of new entrant

d. increasing power of supplier

13) A major pharmaceutical firm recently received FDA approval and patents on a new drug designed to treat heart disease. What is the most important implication of getting this patent?

a. Increasing competition within the industry

b. increasing threat of substitute

c. increasing entry barrier and lowering threat of new entrant

d. increasing power of buyers

14) Firms in the industry have incurred major costs by purchasing specialized equipment that cannot be converted to other uses. What is the implication of this for the industry?

a. Powerful buyers

b. High threat of substitute products

c. High bargaining power for suppliers

d. High exit barriers

15) Cost reduction is crucial for the low-cost strategy. Which of the following is not a method of achieving cost reduction?

a. The experience curve.

b. Economies of scale.

c. Customization

d. Bulk buying raw materials

16) Which of the following would NOT be a reason for management carrying out a GDPEST analysis?

a. to consider how organizational strategy should take account of changes in the outside world

b. to determine strengths of the company

c. to determine the external factors most likely to impact upon the organization

d. to identify potential influences (e.g. trends about consumers) on the future of the organization

Answer 1

Question:- Which of the following is NOT a value-creating activity associated with the differentiation strategy?

Answer:- a. intensive training programs to improve employee efficiency

Reason:- Providing training to the employees for improving their efficiency is more related to eh process improvement rather than value creation for the customers.

Question:- 2) A certain marble quarry provides a unique type of marble that is richly colored and strikingly veined. It has been used for churches and public buildings throughout the world. The architect of a new headquarters for a prestigious Fortune 500 firm has specified the use of this marble, and this marble only, for this project. Which of the following statements is most likely to be true?

Answer:- a. The cost of the marble will be expensive because of the bargaining power of the supplier.

Reason:- As the only specified marble has to be used which is supplied by the few suppliers only thus the number of suppliers is less causing the greater bargaining power of the supplier and they can charge greater prices for the marble.

Question:- 3) The threat of new entrants is increased if:

Answer:- Product differentiation the industry is low

Reason:- When product differentiation in the industry is low, the existing products can easily be copied by the other organizations and thus the initial investment in the product development will be less resulting in easy entry of new players in the industry.

Question:- 4) A river barge company can offer cheaper, although slower, per pound transportation of products to companies when compared with transportation by air, truck, or rail. The river barge company should first target customers whose companies use

Answer:- c. the cost leadership strategy.

Reason:- Cost leadership is when the companies offer lower prices for their services and products. As the river barge company is offering cheaper services thus it should try to attract those customers who are price sensitive.

Question:- 6) Primary activities in the value chain are:

Answer:- b. involved in a product's physical creation, its distribution, and its service after the sale.

Reason:- Value chain includes the different types of activities which can help in creating values for the customers.

Question:- 7) Value chain analysis is a tool used to:

Answer:- c. understand the parts of the firm's organization that create value and those that do not.

Reason:- With the help fo value chain analysis, we can determine the various elements of the organizational processes which can help in creating values for the customers.

Question:- 8) In 2012 Pets and Vets as Partners, a Philadelphia PA veterinary practice, added PetMedSpa, a pet weight loss and rehabilitation facility that included the most advanced orthopedic rehabilitation equipment within 80 miles. Pets and Vets also added new highly trained staff to run the Spa. By opening the Spa PVP seeks:

Answer:- a. A competitive advantage

Reason:- Competitive advantages are those elements of the organization which are not possessed by the competitors.

Question:- 11) Mary, a teenager, gets $8 per hour for babysitting. Steven lives two doors down and turns 15 next month. Mary is worried that Steven may want to start earning extra money by babysitting, too, and may charge less money. This is a problem of:

Answer:- c. the threat of new entrants

Reason:- Threat of new entrants arises when some more service providers or producers offer the similar services or products to the customers.