Unit 2 - LE

Question 1

The power of customers to demand lower prices or better quality.

Answer 1

Bargaining Power of Buyers

Question 2

The cost advantage gained when production scales up and per-unit costs decline.

Answer 2

Economies of Scale

Question 3

The value chain activity responsible for turning raw materials into finished goods.

Answer 3

Operations

Question 4

These are sets of firms within an industry that pursue similar competitive strategies.

Answer 4

Strategic Groups

Question 5

A primary activity in the value chain responsible for receiving, storing, and handling raw materials.

Answer 5

Inbound Logistics

Question 6

Buyers are strong when they can easily switch suppliers without incurring significant costs. T or F

Answer 6

True

Question 7

A primary activity in the value chain responsible for receiving, storing, and handling raw materials.

Answer 7

Inbound Logistics

Question 8

This refes to a group of businesses that produce similar goods or services and operate within the same sector of the economy.

Answer 8

Industry

Question 9

Intense rivalry leads firms to engage in price wars and aggressive marketing. T or F

Answer 9

True

Question 10

A strategy where firms create cost advantages by producing in larger volumes.

Answer 10

Economies of Scale

Question 11

Economies of scale reduces costs, making it harder for new entrants to compete. T or F

Answer 11

True

Question 12

Competitive intelligence helps firms understand market forces and competitors’ strategies. T or F

Answer 12

True

Question 13

A support activity in the value chain that involves acquiring inputs such as materials and suppliers.

Answer 13

Procurement

Question 14

The framework that argues firms achieve competitive advantage by leveraging rare, valuable, and hard-to-imitate resources.

Answer 14

Resource-Based View

Question 15

The framework that suggests that firms achieve competitive advantage by leveraging rare, valuable, and hard-to-imitate resources.

Answer 15

Resource-Based View

Question 16

Value Chain Analysis helps identify activities that contribute to cost efficiency. T or F

Answer 16

True

Question 17

Investing in upgrading unique capabilities aligns with Resource-Based View. T or F

Answer 17

True

Question 18

Under the Value Chain Analysis, the firm’s infrastructure, human resource management, technology development, and procurement are support activities, not primary activities. T or F

Answer 18

True

Question 19

The costs incurred by a customer when changing from one supplier to another.

Answer 19

Customer Switching Costs

Question 20

RBV argues that competitive advantage comes from internal resources and capabilities, not external forces. T or F

Answer 20

True

Question 21

High customer switching costs make it harder for new firms to attract customers, acting as a barrier to entry. T or F

Answer 21

True

Question 22

The power suppliers hold over buyers when they provide unique, high-demand products.

Answer 22

Bargaining Power of Suppliers

Question 23

The value chain activity responsible for turning raw materials into finished goods.

Answer 23

Operations

Question 24

A unique strength or capability that differentiates a company from competitors.

Answer 24

Competitive Advantage
or
Core Competencies

Question 25

When switching costs are high, customers are less likely to switch substitutes reducing their threat. T or F

Answer 25

True

Question 26

Suppliers with unique products and forward integration threats hold more power over buyers. T or F

Answer 26

True

Question 27

If a resource is easily imitated or substituted, it cannot provide a sustainable competitive advantage. T or F

Answer 27

True

Question 28

It refers to the organized efforts and activities of individuals or entities to produce, distribute, and sell goods and services to generate profit.

Answer 28

Business

Question 29

The process or model that helps firms identify areas to either reduce costs or create differentiation.

Answer 29

Value Chain Analysis

Question 30

The process of gathering and analyzing information about competitors and market forces.

Answer 30

Competitive Intelligence

Question 31

According to the RBV, a resource must be valuable, rare, inimitable, and organized (VRIO) to provide a sustainable competitive advantage. T or F

Answer 31

True

Question 32

Procurement, human resource management, and technology development are support activities in the VCA. T or F

Answer 32

True

Question 33

Value Chain Analysis is applied to manufacturing-based firms. T or F

Answer 33

False

Question 34

High entry barriers discourage new entrants, reducing competitive pressures from potential newcomers. T or F

Answer 34

True

Question 35

In the Value Chain Model, inbound logistics, operations, outbound logistics, marketing and sales, and services are primary activities. T or F

Answer 35

True

Question 36

Intangible assets like brand reputation and organizational culture can be a source of competitive advantage. T or F

Answer 36

True

Question 37

A fragmented industry with many small competitors generally experiences more intense rivalry. T or F

Answer 37

True

Question 38

Factors that make it difficult for new competitors to enter an industry.

Answer 38

Threat of New Entrants or Barriers to Entry

Question 39

Strong substitutes increase buyer power but decrease supplier power, as buyers have more alternatives. T or F

Answer 39

True