Question 1

For most companies, the Web _____ the threat that new competitors will enter the market by _____ traditional barriers to entry.
A)decreases, increasing
B)increases, decreasing
C)increases, increasing
D)decreases, decreasing

Accepted Answer

The Web increases the threat that new competitors will enter the market by decreasing traditional barriers to entry, such as the need for a physical storefront or large amounts of capital to start a business.

Question 2

The bargaining power of suppliers is _______ when buyers have few choices and _________ when buyers have many choices.
A)high, high
B)high, low
C)low, low
D)low, high

Accepted Answer

When buyers have few choices, suppliers have more power to dictate price and terms. This makes the bargaining power of suppliers high. On the other hand, when buyers have many choices, suppliers have less power and must compete more aggressively, making the bargaining power of suppliers low. Therefore, the best choice is B.

Question 3

The threat of competitors' entering a market is very high in industries that perform a(n)_____ role and in industries where the primary product or service is _____.
A)intermediation, physical
B)broker, physical
C)sales, financial
D)financial, digital
E)intermediation, digital

Accepted Answer

The threat of competitors' entering a market is high in industries that perform an intermediation role and in industries where the primary product or service is digital. Therefore, choice E, which combines both factors, is the best choice.

Question 4

The visibility of Internet applications on the Web makes proprietary systems more difficult to keep secret. This is an example of which of Porter's five forces?
A)Threat of entry of new competitors
B)Bargaining power of suppliers
C)Bargaining power of customers
D)Threat of substitute products
E)Rivalry among existing firms in an industry

Accepted Answer

The visibility of Internet applications increases transparency and competition, intensifying the rivalry among existing firms as they strive to maintain their competitive edge.

Question 5

New technologies can produce new products very _____, which _____ the threat from substitute products.
A)slowly, decreases
B)slowly, increases
C)slowly, does not affect
D)quickly, increases
E)quickly, does not affect

Accepted Answer

New technologies allow for faster production and therefore a quicker introduction of new products. This increases the threat from substitute products as there are more options available to consumers.

Question 6

_____ activities create value for which customers are willing to pay, whereas _____ activities do not add value directly to the firm's products or services.
A)Support, primary
B)Human resource management, inbound logistics
C)Procurement, operations
D)Primary, support
E)Accounting, outbound logistics

Accepted Answer

Primary activities are those that directly contribute to creating and delivering a product or service to customers, whereas support activities are necessary for the primary activities to occur but do not directly add value to the product or service. For example, primary activities include inbound logistics, operations, outbound logistics, marketing and sales, and service, while support activities include procurement, human resource management, technology development, and infrastructure. Therefore, the correct answer is D: primary activities create value for which customers are willing to pay, whereas support activities do not add value directly to the firm's products or services.

Question 7

Which strategy for competitive advantage involves introducing new products and putting new features in existing products?
A)Cost leadership
B)Differentiation
C)Innovation
D)Operational effectiveness
E)Customer-orientation

Accepted Answer

Introducing new products and adding new features to existing products is a strategy of Innovation. This helps a company differentiate itself from competitors and provide unique value to customers, ultimately leading to a competitive advantage. Cost leadership focuses on reducing costs to offer products at lower prices, differentiation on offering unique products, operational effectiveness on optimizing production processes, and customer-orientation on catering to specific customer needs.

Question 8

If there are ______ substitutes for an organization's products or services, then the threat of substitutes is _______.
A)many, high
B)few, low
C)few, high
D)many, low
E)few, negligible

Accepted Answer

When there are many substitutes available for an organization's products or services, customers can easily switch to alternatives, which increases the competitive pressure and hence the threat of substitutes is considered high.

Question 9

The introduction of ATM machines by Citibank was a classic example of which strategy for competitive advantage?
A)Cost leadership
B)Innovation
C)Differentiation
D)Operational effectiveness
E)Customer-orientation

Accepted Answer

The introduction of ATM machines by Citibank was a classic example of the innovation strategy for competitive advantage. The ATM machines allowed customers to withdraw cash at their convenience anytime, anywhere, without the need for a bank teller, which was a significant innovation in the banking industry at that time. This innovation enhanced Citibank's value proposition and attracted more customers to bank with them, thereby giving them a competitive advantage.

Question 10

Which strategy for competitive advantage involves improving the manner in which an organization executes its internal business processes?
A)Cost leadership
B)Differentiation
C)Innovation
D)Operational effectiveness
E)Customer-orientation

Accepted Answer

Operational effectiveness involves improving internal business processes to increase efficiency and productivity, which can lead to a competitive advantage. Cost leadership and differentiation strategies may also involve internal processes, but they focus more on pricing and product/service features respectively. Innovation and customer-orientation strategies are more external-facing and focus on developing new products/services or meeting customer needs.

Question 11

Which strategy for competitive advantage involves offering different products, services, or product features?
A)Cost leadership
B)Differentiation
C)Innovation
D)Operational effectiveness
E)Customer-orientation

Accepted Answer

Differentiation strategy involves offering unique products or services in comparison to competitors. This helps to distinguish the business and create a competitive advantage by targeting a specific segment of customers who value these unique features.

Question 12

Porter's competitive forces model helps organizations identify _____, whereas his value chain model helps organizations identify specific _____.
A)competitive opportunities, activities
B)general strategies, activities
C)activities, competitive opportunities
D)activities, general strategies
E)primary activities, support activities

Accepted Answer

The answer of Porter's competitive forces model helps organizations identify...

Question 13

WestJet's low-cost, short-haul strategy is an example of which strategy for competitive advantage?
A)Cost leadership
B)Differentiation
C)Innovation
D)Operational effectiveness
E)Customer-orientation

Accepted Answer

The answer of WestJet's low-cost, short-haul strategy is an example...

Question 14

____________ is a feature that must be offered by a competing organization in order to survive in the marketplace.
A)Competitive advantage
B)An entry barrier
C)Strategic advantage
D)Rapid time-to-market
E)One-to-one marketing

Accepted Answer

The answer of ____________ is a feature that must be...

Question 15

The threat of competitors' entering the automobile manufacturing industry is _____ because barriers to entry are so _____.
A)low, low
B)high, high
C)high, low
D)low, high

Accepted Answer

The threat of competitors entering the automobile manufacturing industry is low because barriers to entry are high, such as the need for significant capital investment, technology, and brand recognition.

Question 16

Buyer power is _____ when buyers have many choices from whom to buy, and _____ when buyers have few choices.
A)high, the same
B)high, low
C)low, low
D)low, high
E)low, the same

Accepted Answer

When buyers have many choices, they have more power and can demand better prices and services from sellers. Conversely, when buyers have few choices, they have less power and may be forced to accept less favorable terms from sellers. Therefore, option B correctly identifies the relationship between buyer power and the number of choices available to them.

Question 17

Walmart's automatic inventory replenishment system, which enables the company to reduce inventory storage requirements, is an example of which strategy for competitive advantage?
A)Cost leadership
B)Differentiation
C)Innovation
D)Operational effectiveness
E)Customer-orientation

Accepted Answer

The answer of Walmart's automatic inventory replenishment system, which enables...

Question 18

The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A)e-commerce, digital
B)digital, e-commerce
C)digital, physical
D)physical, financial
E)physical, digital

Accepted Answer

Delivering products in the physical channel requires shipping, handling, and storage expenses, which can be high. In the digital channel, products can be delivered instantly and with negligible costs, resulting in much lower delivery costs compared to the physical channel. Therefore, the costs of delivering products in the physical channel are much higher than delivering products in the digital channel.

Question 19

The threat of entry of new competitors is __________ when it is easy to enter a market and __________ when significant barriers to entry exist.
A)high, high
B)high, low
C)low, low
D)low, high

Accepted Answer

The threat of entry of new competitors is high when it is easy to enter a market and low when significant barriers to entry exist, making it difficult for new competitors to enter the market.

Question 20

How does the Internet affect the way you purchase your textbooks?
A)The Internet gives you fewer choices.
B)The Internet increases your bargaining power.
C)The Internet provides you with less information.
D)The Internet decreases your bargaining power.
E)The Internet increases your switching costs.

Accepted Answer

The Internet increases your bargaining power by providing access to numerous online retailers and comparison sites, enabling you to easily compare prices and find the best deals.

Quiz 2: Organizational Strategy, Competitive Advantage, and Information Systems

For most companies, the Web _ the threat that new competitors will enter the market by _ traditional barriers to entry.

The bargaining power of suppliers is _ when buyers have few choices and ___ when buyers have many choices.

The threat of competitors' entering a market is very high in industries that perform a(n) _ role and in industries where the primary product or service is _.

The visibility of Internet applications on the Web makes proprietary systems more difficult to keep secret. This is an example of which of Porter's five forces?

New technologies can produce new products very _, which _ the threat from substitute products.

_ activities create value for which customers are willing to pay, whereas _ activities do not add value directly to the firm's products or services.

Which strategy for competitive advantage involves introducing new products and putting new features in existing products?

If there are substitutes for an organization's products or services, then the threat of substitutes is _.

The introduction of ATM machines by Citibank was a classic example of which strategy for competitive advantage?

Which strategy for competitive advantage involves improving the manner in which an organization executes its internal business processes?

Which strategy for competitive advantage involves offering different products, services, or product features?

Porter's competitive forces model helps organizations identify _, whereas his value chain model helps organizations identify specific _.

WestJet's low-cost, short-haul strategy is an example of which strategy for competitive advantage?

____________ is a feature that must be offered by a competing organization in order to survive in the marketplace.

The threat of competitors' entering the automobile manufacturing industry is _ because barriers to entry are so _.

Buyer power is _ when buyers have many choices from whom to buy, and _ when buyers have few choices.

Walmart's automatic inventory replenishment system, which enables the company to reduce inventory storage requirements, is an example of which strategy for competitive advantage?

The costs of delivering products in the _ channel are much higher than delivering products in the _ channel.

The threat of entry of new competitors is when it is easy to enter a market and when significant barriers to entry exist.

How does the Internet affect the way you purchase your textbooks?

Quiz 2: Organizational Strategy, Competitive Advantage, and Information Systems

For most companies, the Web _____ the threat that new competitors will enter the market by _____ traditional barriers to entry.

The bargaining power of suppliers is _______ when buyers have few choices and _________ when buyers have many choices.

The threat of competitors' entering a market is very high in industries that perform a(n) _____ role and in industries where the primary product or service is _____.