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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 |
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"what do we provide" is a fundamental question in developing a
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business level strategy |
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"how do we provide it?" is a fundamental question in developing a |
business level strategy
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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? |
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correct this statement: "The level of threat of entry from competition is generally the same across all industries"
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All industries have some threat of entry from competition, the level of threat differs from industry to industry
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correct this statement: the buyer or customer has no power to force down prices in an industry
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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 |
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correct this statement: "not all companies face the threat of substitutes"
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all companies face the threat of some kind of substitutes |
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correct this statement: every industry is different in terms of who maintains the power in the firm-supplier relationship. |
this is true |
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supply side economies of scale arise when |
a firm manufactures products in high volumes
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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 |
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in many industries, incumbent companies maintain |
cost or quality advantages that are not easily available to a potential rival |
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Cost or quality advantages that incumbent companies maintain include |
superior technology, preferential access to raw materials, or government subsidies |
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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 |
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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 |
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Walmart exerts extreme buyer power over a number of firms because of its |
size |
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A characteristic of a powerful customer group is buyers can integrate |
backwards to produce the industry's product |
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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 |
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Why is "the industry's products are clearly differentiated" not a characteristic of a powerful customer group |
the industry's products are undifferentiated |
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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 |
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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 |
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drawback of Porter's 5-forces model |
it typically looks at an industry at one point in time |
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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 |
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intangible resources often include |
a firms internal processes or systems, brand names, technology, culture, and intellectual property |
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The most recognizable resources that a firm uses to manufacture its products, such as raw materials and computing systems, are categorized as _____ resources. |
tangible |
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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. |
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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? |
strengths |
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"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 |
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competitive advantage can come from three generic strategies that a manager can choose for the firm: list the three |
cost leadership, differentiation, and focus |
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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 |
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In a differentiation focused approach, a firm attempts to target: |
customers with special needs who have been under served historically |
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In a differentiation strategy, a firm seeks |
to be unique in its industry along a group of dimensions that are valued by consumers |
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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 |
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value chain 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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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. |
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example of support activities of a firm's value chain |
firm infrastructure, HR management, technological development, and procurement |
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example of primary activities of a firm's value chain |
inbound logistics, operations, outbound logistics, marketing & sales, and service |