True/False Questions
_____ 1. A company has a competitive advantage when its profitability is higher than the average for its industry.
_____ 2. Michael Porter has argued that low cost and differentiation are two basic strategies for creating value and attaining a competitive advantage in an industry.
_____ 3. The most complicated measure of efficiency is the quantity of inputs that it takes to produce a given output.
_____ 4. A product can be said to be reliable when it consistently does the job is designed for, does it well, and rarely, if ever, breaks down.
_____ 5. Product innovation refers to the act of creating new products or processes.
_____ 6. The term value chain refers to the idea that a company is a chain of activities for transforming inputs into outputs valued by customers’ value.
_____ 7. Marketing strategy refers to the position that a company takes with regard to pricing, promotion, advertising, product design, and distribution.
Multiple-Choice Questions
8. Which of the following is a primary activity in a firm’s value chain?
a. Information systems
b. Human resources.
c. Materials Management
d. Research and Development
e. Company Infrastructure
9. Functional level strategies build ______by focusing on a limited number of important functional level strategies.
a. product innovation
b. competitive advantage
c. customer response time
d. a & b above
e. None of the above
10. The term ______has been coined to describe the ability of companies to use flexible manufacturing technology to reconcile two goals that were once thought to be incompatible: low cost and differentiation through product customization.
a. marketing strategy
b. lean production
c. mass customization
d. learning effects
e. flexible manufacturing technology
11. In a ______, members coordinate their own activities, which might include making their own hiring, training, work and reward decisions.
a. group work team
b. organizational team
c. self-managing team
d. operating team
d. management team
12. The principle tool that most managers now use to increase the reliability of their product offering is______.
a. the Total Quality Management philosophy
b. the Six Sigma quality improvement methodology
c. effective human resource training and development.
d. information systems efficiency
e. none of the above
13. ______is the specific set of options a company adopts for a product on four main dimensions of marketing: price, distribution, promotion and advertising, and product features.
a. New product development
b. Time to market strategies
c. Product innovation
d. Positioning strategy
e. Customer focus strategies
14. ______are something physical, such as land, buildings, plant, equipment, inventory, and money.
a. Intangible resources
b. Distinctive competencies
c. Organizational factors
d. Capabilities
e. Tangible resources
15. Which of the following is a support activity of the value chain?
a. Marketing and Sales
b. Customer Service
c. Information Systems
d. Research and Development
e. Production
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