Question 1

What kind of strategy is one by which a firm maintains price parity with its competitors and profits from its benefit or cost advantage primarily through high price-cost margins,rather than through a higher market share?

Accepted Answer

A) Pricing strategy 
B) Share strategy 
C) Margin strategy 
D) Focus strategy 
E) Generic strategy

Question 2

Which of the following is a concept developed by Michael Porter that describes,in broad terms,how it positions itself to compete in the market it serves?

Accepted Answer

A) Value chain 
B) Generic strategy 
C) Benefit leadership 
D) Cost Leadership 
E) Focus

Question 3

What type of good is one whose quality can be assessed only after the customer has used it for a while?

Accepted Answer

A) Apparel 
B) Search good 
C) Experience good 
D) Office furniture 
E) Airline tickets

Question 4

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 5

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 6

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 7

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 8

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

Question 9

What is one way to measure a firm's willingness-to-pay?

Accepted Answer

A) Marginal profit per unit of production 
B) Value added analysis 
C) Cost-benefit analysis 
D) Input-output analysis 
E) Sales-per-cost analysis

Question 10

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 11

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

Question 12

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 13

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

Exam 9: Strategic Positioning for Competitive Advantage