Competitive Advantage – Quiz (answers)
True/False questions:
1. Porter and Millar's concept of the value chain divides the functions that a company performs
2.
3.
4.
5.
6.
7.
into primary activities and support activities. T
According to the value chain concept, primary activities consist of human resources,
information technologies and general management. F
According to the value chain concept, primary activities consist of inbound logistics,
operations, outbound logistics, marketing and service activities.T
According to Porter and Millar's value chain concept, the way that one activity is performed
may affect the performance of other activities in the organization. T
According to Porter and Millar, the way that an organization goes about performing its value
chain activities has little or no impact on the firm's competitive position. F
Information technology will probably have little or no impact on how the activities within a
firm's value chain are performed. F
More managers are using information technology to support, control and make decisions
about the daily business activities for which they are responsible. T
8. Information technology can change the nature of the industry in which a firm
competes. T
9. Competition in established markets has little value to the buyer. F
10. Sometimes, small firms within an industry combine resources to develop a joint
information technology that allows them to compete more effectively with larger
firms. T
11. The marketing strategy of low-cost leadership consists of providing unique features to
a product to differentiate the product from that of a firm's rivals. F
12. The marketing strategy of product differentiation is achieved by adding value or
unique features to a product and to improve its image, quality or service. T
13. A firm needs to decide what information technologies it wants to develop before
determining what competitive marketing strategy it wants to employ. F
Multiple choice questions:
1. According to Porter and Millar's value chain concept, all of the following would be
considered as primary activities except for: (B)
a.
Inbound logistics
b.
Human resources
c.
Marketing
d.
Operations
2. The primary value chain activity that includes manufacturing related functions is: (C)
a.
Inbound logistics
b.
Outbound logistics
c.
Operations
d.
Information technology
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3. The primary value chain activity that includes delivery and handling of incoming
materials is: (A)
a.
Inbound logistics
b.
Outbound logistics
c.
Operations
d.
Marketing
4. The primary value chain activity that includes order processing and shipping goods to
customers is: (B)
a.
Inbound logistics
b.
Outbound logistics
c.
Operations
d.
Marketing
5. The primary value activity that includes advertising, sales force and promotions is:
(D)
a.
Outbound logistics
b.
Operations
c.
Service
d.
Marketing
6. The development of million-dollar telecommunications networks which inhibit new
entrants into the insurance industry is an example of how information technology can
be used to lessen the power of: (C)
a.
Buyers
b.
Suppliers
c.
New entrants
d.
Rivals
7. A competitive strategy that enables a firm to reduce costs or to improve productivity
without incurring additional costs is: (A)
a.
Low-cost leadership
b.
Product differentiation
c.
Market specialization
d.
Cost-plus marketing
8. The development of a sophisticated freight tracking communications network in the
railroad industry, in an effort to make railroad distribution more attractive than truck
distribution, demonstrates how information technology can be used to lessen the
impact of: (D)
a.
Buyers
b.
Suppliers
c.
New entrants
d.
Rivals
2
9. A competitive strategy that enables a firm to add value or
products or services is: (B)
a.
Low-cost leadership
b.
Product differentiation
c.
Market specialization
d.
Cost-plus marketing
unique features to
10. Introducing office automation systems to mechanize office paperwork and to reduce
administrative costs supports which of the following competitive strategies: (A)
a.
Low-cost leadership
b.
Product differentiation
c.
Market specialization
d.
Cost-plus marketing
11. A tire manufacturer that introduces sensors which alert the driver to potential tire
problems supports which of the following competitive strategies: (B)
a.
Low-cost leadership
b.
Product differentiation
c.
Market specialization
d.
Cost-plus marketing
12. A competitive strategy that is achieved by concentrating on a particular market or
product niche is: (C)
a.
Low-cost leadership
b.
Product differentiation
c.
Market specialization
d.
Cost-plus marketing
3