BPL5100 Quiz 1 Questions with Correct Answers
Threat of new entrants - Answer-The possibility that the profits of established firms in the industry may be eroded by new competitors.
Economies of scale - Answer-Decreases in cost per unit as absolute output per period increases.
Product di...
BPL5100 Quiz 1 Questions
with Correct Answers
Threat of new entrants - Answer-The possibility that the profits of established firms in
the industry may be eroded by new competitors.
Economies of scale - Answer-Decreases in cost per unit as absolute output per period
increases.
Product differentiation - Answer-The degree to which a product has strong brand loyalty
or customer loyalty
Switching costs - Answer-One-time costs that a buyer/supplier faces when switching
from one supplier/buyer to another.
Bargaining power of buyers - Answer-The threat that buyers may force down prices,
bargain for higher quality or more services, and play competitors against each other.
Bargaining power of suppliers - Answer-The threat that suppliers may raise prices or
reduce the quality of purchased goods and services.
Threat of substitute products and services - Answer-The threat of limiting the potential
returns of an industry by placing a ceiling on the prices that firms in that industry can
profitably charge without losing too many customers to substitute products
Substitute products and services - Answer-Products and services outside the industry
that serve the same customer need as the industry's products and services.
Intensity of rivalry among competitors in an industry - Answer-The threat that customers
will switch their business to competitors within the industry
Zero-sum game - Answer-A situation in which multiple players interact, and winners win
only by taking from other players.
Complements - Answer-Products or services that have an impact on the value of a
firm's products or services.
Strategic groups - Answer-Clusters of firms that share similar strategies
Value Chain Analysis - Answer-A strategic analysis of an organization that uses value-
creating activities
, Primary activities - Answer-Sequential activities of the value chain that refer to the
physical creation of the product or service, its sale and transfer to the buyer, and its
service after sale, including inbound logistics, operations, outbound logistics, marketing
and sales, and service.
Support activities - Answer-Activities of the value chain that either add value by
themselves or add value through important relationships with both primary activities and
other support activities, including procurement, technology development, human
resource management, and general administration.
Inbound logistics - Answer-Receiving, storing, and distributing inputs of a product.
Operations - Answer-All activities associated with transforming inputs into the final
product form.
Outbound logistics - Answer-Collecting, storing, and distributing the product or service
to buyers.
Marketing and Sales - Answer-Activities associated with purchases of products and
services by end users and the inducements used to get them to make purchases.
Service - Answer-Actions associated with providing service to enhance or maintain the
value of the product.
Procurement - Answer-The function of purchasing inputs used in the firm's value chain,
including raw materials, supplies, and other consumable items as well as assets such
as machinery, laboratory equipment, office equipment, and buildings.
Technology development - Answer-Activities associated with the development of new
knowledge that is applied to the firm's operations.
Human resource management - Answer-Activities involved in the recruiting, hiring,
training, development, and compensation of all types of personnel.
General administration - Answer-General management, planning, finance, accounting,
legal and government affairs, quality management, and information systems; activities
that support the entire value chain and not individual activities.
Interrelationships - Answer-Collaborative and strategic exchange relationships between
value-chain activities either (a) within firms or (b) between firms. Strategic exchange
relationships involve exchange of resources such as information, people, technology, or
money that contribute to the success of the firm.
Resource-based view (RBV) of the firm - Answer-Perspective that firms' competitive
advantages are due to their endowment of strategic resources that are valuable, rare,
costly to imitate, and costly to substitute.
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