SOLVED

11) If customers perceive the benefits of a substitute to be similar to that of a product then ________. A) the threat of the substitute is weak B) the price should be increased to retain market C) the threat from the substitute is strong D) there is no threat from the substitute 12) The strength of bargaining power forces depends on the availability of substitutes and ________ compared to the size of suppliers or customers. A) the amount of profit made annually B) the relative size of the firm C) the presence of competitors in the market D) the threat of new competitors 13) An organization responds to the structure of its industry by choosing a ________ strategy A) competitive B) growth C) leadership D) operational 14) If a company produces a uniquely formulated anti-ageing face cream targeted at women above the age of forty, which of the following competitive strategies is it following? A) industry-wide low cost B) industry-wide differentiation C) focused low cost D) focused differentiation 15) Which of the following is an example of a competitive strategy employed by a firm? A) increasing the price of its product when raw material prices increase B) laying off staff in order to cut down costs during a recession period C) advertising its products nationwide like its competitor organizations D) launching a unique product targeted at a section of consumers 16) According to Porter, to be effective the organization’s goals, objectives, culture, and activities must be consistent with the ________. A) organization’s structure B) organization’s competitors C) organization’s strategy D) organization’s workforce 17) Porter defined ________ as the amount of money that a customer is willing to pay for a resource, product, or service. A) margin B) profit C) price D) value 18) Which of the following is true of a value-chain? A) It is a network of value-creating activities. B) It consists of only primary activities. C) It is specific to manufacturing industries. D) It nullifies the importance of support activities. 19) A business that selects a differentiation strategy would ________. A) add cost to an activity provided it has a positive margin B) provide essential functions at lowest costs C) imitate rival companies’ strategy and products D) aim to please stockholders with highest dividends 20) The difference between the value that an activity generates and the cost of the activity is called the ________. A) equity B) liability C) overhead D