Chapter 2

Question 1

What is a competitive advantage?
A.A product that an organization’s customers place a lesser value on than similar
offerings from a competitor
B. A product or service that an organization’s customers value more highly than similar
offerings from a supplier
C.A service that an organization’s customers place a lesser value on than similar offerings
from a supplier
D. A product or service that an organization’s
customers place a greater value on than
similar offerings from a competitor

Answer 1

D. A product or service that an organization’s
customers place a greater value on than
similar offerings from a competitor

Question 2

2. What occurs when an organization can significantly impact its market share by being the first to market with a competitive advantage?
A. Private exchange
B. First-mover advantage
C. Environmental scanning
D. Loyalty program

Answer 2

B. First-mover advantage

Question 3

3.What is the acquisition and analysis of events and trends in the environment external to an
organization?
A.Private exchange
B.First-mover advantage
C.Environmental scanning
D.Loyalty program

Answer 3

C. Environmental Scanning

Question 4

4.All of the following are common tools used in industry to analyze and develop competitive
advantages, except:
A.Five Forces Model
B.Three Generic Strategies
C.Competitive analysis model
D.Value chain analysis

Answer 4

C. Competitive analysis model

Question 5

5.What does the Five Forces Model help determine the relative attractiveness of?
A.A product
B.A company
C.An industry
D.An investment

Answer 5

C. an industry

Question 6

6.Michael Porter, a University Professor at Harvard Business School, identified four competitive forces that can hurt potential sales. Which of the following is not one of
the forces Porter identified?
A.Knowledgeable customers can force down prices by pitting rivals against each another
B.Influential suppliers can drive down profits by refusing to purchase any products
C.New market entrants can steal potential investment capital
D.Substitute products can steal customers

Answer 6

B.Influential suppliers can drive down profits by refusing to purchase any products

Question 7

Which of the following is not one of Porter's Five Forces?
A.Buyer power
B.Supplier power
C.Threat of substitute buyers
D.Rivalry among existing competitors

Answer 7

C.Threat of substitute buyers

Question 8

Which of the following forces is commonly reduced through the use of a loyalty program?
A.Buyer power
B.Supplier power
C.Threat of new entrants
D.Rivalry among existing competitors

Answer 8

A.Buyer power

Question 9

Which of the following is considered a business process?
A.Processing a customer's order
B.Processing a customer's inquiry
C.Processing a customer's complaint
D.All of the above

Answer 9

D. All of the above

Question 10

Which of the following represents buyer power
in Porter’s Five Forces Model?
A.Low when buyers have many choices of whom to buy from and high when their choices are few
B.Assessed by analyzing the ability of buyers to directly impact the price they are willing to pay for an item
C.Assessed by analyzing the ability of suppliers to directly impact the amount of products that are developed
D.High when buyers have many customers of whom to buy from and low when their customers are few

Answer 10

D.High when buyers have many customers of whom to buy from and low when their customers are few