Question 1

What term coined by Michael Porter describes a tool that can be used to show how nearly every industry can be broken down into smaller pieces known as segments?

Accepted Answer

A)   Industry breakdown matrix
B)   Industry five forces matrix
C)   Industry value creation matrix
D)   Industry segmentation matrix
E)   Industry dimensions matrix D

Question 2

What type of curve can be used to describe the set of price-quality combinations that yields the same consumer surplus to an individual?

Accepted Answer

A)   Frontier curve
B)   Learning curve
C)   Level curve
D)   Implicit curve
E)   Indifference curve E

Question 3

What term describes the price at which a consumer is indifferent between buying a product and going without it?

Accepted Answer

A)   Value creation
B)   Competitive advantage
C)   Consumer surplus
D)   Maximum willingness-to-pay
E)   Value chain D

Question 4

What term coined by Michael Porter describes a firm that pursues elements of cost leadership and benefit leadership at the same time and in the process fails to achieve either a cost advantage or a benefit advantage?

Accepted Answer

A)   Five forces
B)   Value creation
C)   Value chain
D)   Stuck in the middle
E)   Generic strategy

Question 5

What term best describes a targeting strategy in which the firm offers a variety or related products to a particular class of customers?

Accepted Answer

A)   Broad-coverage strategy
B)   Focus Strategy
C)   Geographic specialization
D)   Product specialization
E)   Customer specialization

Question 6

What term describes the situation when a firm earns a higher rate of economic profit than the average rate of economic profit of other firms competing within the same market?

Accepted Answer

A)   Industry effect
B)   Competitive advantage
C)   Business unit effect
D)   Competitive position
E)   Market profitability economics

Question 7

Under what type of strategy does a firm either offer a narrow set of varieties,serve a narrow set of customers,or do both?

Accepted Answer

A)   Generic strategy
B)   Margin strategy
C)   Focus strategy
D)   Share strategy
E)   Broad-coverage strategy

Question 8

What is the perceived benefit of a product per unit consumed minus the product's monetary price?

Accepted Answer

A)   Value creation
B)   Competitive advantage
C)   Consumer surplus
D)   Maximum willingness-to-pay
E)   Value chain

Question 9

Which of the following is false with respect to the strategy of cost leadership?

Accepted Answer

A)   A firm following a strategy of cost leadership is following a generic strategy narrow in scope
B)   A firm can follow a cost leadership strategy through achieving benefit parity by making products with the same B, but at a lower C than its rivals
C)   A firm can follow a cost leadership strategy through achieving benefit proximity by offering a B that is not much less than those of competitors
D)   A firm following a strategy of cost leadership creates more value than its competitors by offering products that have a lower C than those of its rivals
E)   A firm can follow a cost leadership strategy by offering a product that is qualitatively different from that of its rivals

Question 10

Which of the following terms is a concept,developed by Michael Porter,which describes the activities within firms and across firms that add value along the way to the ultimate transacted good or service?

Accepted Answer

A)   Five forces
B)   Value creation
C)   Value chain
D)   Consumer surplus
E)   Producer surplus

Question 11

What term describes the process of using market prices of unfinished and semifinished goods to estimate the incremental value-created by distinctive parts of the value chain?

Accepted Answer

A)   Value-added analysis
B)   Value creation analysis
C)   Market value analysis
D)   Value benefit drivers
E)   Value cost drivers

Question 12

Which of the following statements best describes a characteristic of geographic specialization focus strategies?

Accepted Answer

A)   Offers a variety of products and/or sells to a variety of customer groups within a narrow geography
B)   Offers an array of product varieties to a limited class of customers
C)   Caters to the particular needs of the customer group served
D)   Offers a limited set of products to an array of different customer groups
E)   Does an especially good job satisfying a subset of the needs of the consumer groups being served

Question 13

Which of the following is a resource?

Accepted Answer

A)   Brand promotion skills
B)   Yield management capabilities
C)   Ability to manage sourcing and procurement functions
D)   Workers with firm-specific expertise or know-how
E)   Ability to integrate order-taking, procurement, manufacturing and out-bound logistics

Question 14

Which of the following represents producer surplus in the value creation equation,(B-P)+ (P-C)?

Accepted Answer

A)   B
B)   P
C)   C
D)   B-P
E)   P-C

Question 15

Benefit proximity refers to which of the following?

Accepted Answer

A)   Competing firms offering products with exactly the same benefit
B)   Cost leading firms offering products with slightly less benefit
C)   Product benefits that cannot easily be differentiated by the consumer
D)   Cost leading firms offering products with slightly more benefit
E)   The inability for competing firms to produce products with similar benefits

Question 16

What is another term for a "win-win" business opportunity?

Accepted Answer

A)   Economic profit
B)   Excess total surplus
C)   Gains from trade
D)   Consumer surplus excess
E)   Benefit - Benefit transaction

Question 17

What type of good is one whose quality is relatively easy to evaluate before purchase?

Accepted Answer

A)   Consumer packaged good
B)   Search good
C)   Experience good
D)   Automobile
E)   Appliance

Question 18

Which of the following is a capability?

Accepted Answer

A)   Patents and trademarks
B)   Brand-name reputation
C)   Installed base
D)   Organizational culture
E)   Sourcing skills

Question 19

Which of the following represents total surplus in t he value creation equation,(B-P)+ (P-C)?

Accepted Answer

A)   B + C
B)   P + C
C)   B - C
D)   P - C
E)   None of the above

Question 20

Select the letter corresponding to the best answer.For a given consumer,any price-quality combination along the indifference curve yields the _______________.

Accepted Answer

A)   Same consumer surplus
B)   Same maximum willingness-to-pay
C)   High consumer surplus
D)   Low consumer surplus
E)   Same competitive advantage

Exam 9: Strategic Positioning for Competitive Advantage