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36 Cards in this Set

  • Front
  • Back

"who do we serve?" is a fundamental question in developing a

business level strategy

"what do we provide" is a fundamental question in developing a

business level strategy

"how do we provide it?" is a fundamental question in developing a

business level strategy

in developing a business level strategy, a manager must answer three fundamental questions:

1. Who do we serve?

2. What do we provide?

3. How do we provide it?

correct this statement: "The level of threat of entry from competition is generally the same across all industries"
All industries have some threat of entry from competition, the level of threat differs from industry to industry
correct this statement: the buyer or customer has no power to force down prices in an industry

a buyer will tend to have high bargaining power relative the supplier when the buyer purchases in very large volumes or when the suppliers products are largely undifferentiated

correct this statement: "not all companies face the threat of substitutes"

all companies face the threat of some kind of substitutes

correct this statement: every industry is different in terms of who maintains the power in the firm-supplier relationship.

this is true

supply side economies of scale arise when

a firm manufactures products in high volumes

demand side benefits of scale is

where the buyers' willingness to pay for a product increases as the number of other buyers for the industry's product increases

in many industries, incumbent companies maintain

cost or quality advantages that are not easily available to a potential rival

Cost or quality advantages that incumbent companies maintain include

superior technology, preferential access to raw materials, or government subsidies

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 6 months and has been dissatisfied with its service and wanted to cancel the contract. However, he did not do so because he will have to spend a lot for canceling his Z-Gadget contract and signing up for another alternative. Which of the following characteristics of a powerful supplier group does Z-Gadget have with respect to its contract with John?

industry participants face switching costs in changing suppliers

Which force of the five-forces model will exemplify Wal-mart’s ability to buy products from its suppliers at rock-bottom prices?

bargaining power of customers

Walmart exerts extreme buyer power over a number of firms because of its


A characteristic of a powerful customer group is buyers can integrate

backwards to produce the industry's product

Why is "the group purchases in lesser volumes relative to the supplier" not a characteristic of a powerful customer group

the group is concentrated or purchases in large volumes relative to the supplier

Why is "the industry's products are clearly differentiated" not a characteristic of a powerful customer group

the industry's products are undifferentiated

Why is "Buyers face high switching costs in changing vendors" not a characteristic of a powerful customer group

buyers face few switching costs in changing vendors

rivalry among existing competitors is more when

1. fixed costs are high and marginal costs are low

2. exit barriers are high

3. industry growth is slow

4. the product is perishable

drawback of Porter's 5-forces model

it typically looks at an industry at one point in time

A cosmetics company owns a patent for 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.


intangible resources often include

a firms internal processes or systems, brand names, technology, culture, and intellectual property

The most recognizable resources that a firm uses to manufacture its products, such as raw materials and computing systems, are categorized as _____ resources.


SWOT Analysis

a tool that allows managers to take a snapshot of their firm’s internal strengths and weaknesses as well as the opportunities and threats that are evident in the external environment.

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


"It derives from a firm’s ability to create value for its customers that exceeds the cost of producing the product or service" This statement best describes

competitive advantage

competitive advantage can come from three generic strategies that a manager can choose for the firm: list the three

cost leadership, differentiation, and focus

term that refers to the cost savings achieved when the volume of a product produced by a firm enables it to reduce per unit cost

economies of scale

In a differentiation focused approach, a firm attempts to target:

customers with special needs who have been under served historically

In a differentiation strategy, a firm seeks

to be unique in its industry along a group of dimensions that are valued by consumers

firm's can be referred to as being "stuck in the middle" when

a firm engages in numerous strategies but fails to master any one

value chain analysis

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

primary activities of a firm's value chain refers to

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

example of support activities of a firm's value chain

firm infrastructure, HR management, technological development, and procurement

example of primary activities of a firm's value chain

inbound logistics, operations, outbound logistics, marketing & sales, and service