Business-level Strategy

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Question 1

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Multiple Choice

Which of the following is one of the fundamental questions a manager must answer in developing a business-level strategy?

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Who do we serve?

Who are our competitors?

What are our objectives?

Where should we do business?

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Question 2

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Multiple Choice

Which of the following statements is true about Porter's 5-Forces Model?

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The level of threat of entry from competition is generally the same across all industries.

Every industry and market is different in terms of who maintains the power in the buyer-supplier relationship.

The buyer or customer has no power to force down prices in an industry.

Not all companies face the threat of substitutes.

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Question 3

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Multiple Choice

Supply-side economies of scale arise

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when a buyer's willingness to pay for a product increases.

when the demand for a firm's product keeps fluctuating.

when the number of buyers for a firm's product decreases.

when a firm manufactures products or services in high volumes.

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Question 4

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Multiple Choice

Which of the following barriers to entry occurs when a buyer's willingness to pay for a product increases as the number of other buyers for the industry's product increases?

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Supply-side economies of scale

Restrictive government policy

Demand-side benefits of scale

Customer switching costs

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Question 5

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Multiple Choice

Which of the following is the best example of a barrier to entry created by a firm's incumbency advantages?

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A company with superior technology when compared to its competitors

A company that engages in extensive advertising to gain consumer loyalty

A company that is marked by overcrowded distribution channels

A company that manufactures its products in high volumes

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Question 6

Multiple Choice

John signed a two-year contract with Z-Gadget to get a subsidized price on his new iPhone. He had Z-Gadget's service for only six months when he became dissatisfied and wanted to cancel the contract. However, he did not do so because of high cancellation fees as well as new activation fees with another service. Which of the following characteristics of a powerful supplier group does Z-Gadget have with respect to its contract with John?

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The supplier industry is more concentrated than the industry to which it sells.

Industry participants face switching costs in changing suppliers.

Suppliers offer differentiated products.

No substitutes exist for what the supplier group provides.

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Question 7

Multiple Choice

Many people in large cities are starting to use Uber to find rides. The taxi industry in these cities is facing

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the bargaining power of suppliers.

the bargaining power of customers.

rivalry among existing competitors.

the threat of substitutes.

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Question 8

Multiple Choice

XYZ Company is a low-cost provider. XYZ is most susceptible to

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the bargaining power of suppliers.

the threat of substitutes.

new innovations from rival competitors.

the bargaining power of customers.

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Question 9

Multiple Choice

Rivalry among existing competitors is higher when

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fixed costs are low and marginal costs are high.

exit barriers are low.

industry growth is slow.

the product is not perishable.

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Question 10

Multiple Choice

Which of the following statements is a drawback of Porter's 5-Forces Model?

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It cannot be used to evaluate the structural components of an industry.

This tool is particularly not useful in helping managers decide where to focus.

Evaluating the attractiveness of industries and developing business-level strategy is seldom possible.

The 5-Forces Model typically looks at an industry at one point in time.

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Question 11

Multiple Choice

A cosmetics company owns a patent for a particular kind of shampoo, which is a bestseller in the market. It enables the firm to extract a high level of discretion over product pricing. The patent for the shampoo is an example of a firm's _____ resource.

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tangible

human

natural

intangible

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Question 12

Multiple Choice

The most recognizable resources that a firm uses to manufacture its products, such as the firm's plant and equipment, are categorized as _____ resources.

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tangible

human

intangible

natural

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Question 13

Multiple Choice

Toyota's unique philosophy, processes, and organizational culture

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are tangible resources.

are human resources.

make up its value chain.

are intangible resources.

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Question 14

Multiple Choice

For which of the following companies is human resources the primary resource?

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Morgan & Morgan Law Firm

Daisy Hill Puppy Farm

The Gold and Diamond Supply Store

Marathon Oil Corporation

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Question 15

Multiple Choice

Sara, a manager at DEM Company, is examining all of the activities the firm performs and determining how they interact to form a source of competitive advantage. Sara is using

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Porter's 5-Forces Model.

SWOT analysis.

SWAT analysis.

value chain analysis.

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Question 16

Multiple Choice

_____ analysis separates a firm into its various activities to better understand total costs in the system and potential sources of firm differentiation.

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SWOT

Value chain

Stakeholder

Trend

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Question 17

Multiple Choice

Primary activities of a firm's value chain refers to

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the activities completed to improve a firm's product and the processes used to manufacture it.

the activities involved with recruiting, hiring, training, developing, and compensating all personnel.

the activities such as general management, planning, finance, accounting, legal support, and governmental relations.

the activities involved in the physical creation of a product and its sale and transfer to the buyer.

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Question 18

Multiple Choice

Which of the following belongs to the support activities of a firm's value chain?

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Marketing

Procurement

Logistics

Service

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Question 19

Multiple Choice

Which of the following belongs to the primary activities of a firm's value chain?

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Technological development

Human resource management

Firm infrastructure

Marketing and sales

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Question 20

Multiple Choice

In conducting its SWOT analysis, a baseball team notes that most of its players are among the best in the world and that its coach was a distinguished major-league player. To which part of the SWOT analysis is this information pertinent?

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Strengths

Weaknesses

Opportunities

Threats

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