MIS 309 CHAPTER 3 EXAM QUESTIONS AND
ANSWERS
/. An organization's goals and objectives are determined by its competitive strategy. -
Answer-✅T
/.Organizational strategy begins with the formation of a value chain. - Answer-✅F
/.A major drawback associated with Porter's five forces model is that it ignores the
rivalry
among firms in the industry. - Answer-✅F
/.A major drawback of the five forces model is that it does not analyze the threat of
substitutes
when forming a corporate strategy. - Answer-✅F
/.According to Porter's five forces model, the intensity of each of the forces determines
the
characteristics of the industry, how profitable it is, and how sustainable that profitability
will be. - Answer-✅T
/.The bargaining power of grain farmers in a surplus year is an example of a weak
market force. - Answer-✅T
/.The bargaining power of suppliers is a weak force when considering the example of
students
purchasing gasoline. - Answer-✅F
/.The bargaining power of customers of medicinal drugs is enhanced when
pharmaceutical
companies patent their products. - Answer-✅F
/.An organization responds to the structure of its industry by choosing a competitive
strategy. - Answer-✅T
/.A telecom service provider focusing on high-end users is following an industry-wide
differentiation strategy. - Answer-✅F
/.A furniture dealer offering a wide variety of designs to premium customers alone is
following an industry-wide cost leadership strategy. - Answer-✅F
, /.Providing the lowest cost across an industry can be referred to as focused cost-
leadership. - Answer-✅F
/.Focused differentiation refers to providing a better product or service within an industry
segment. - Answer-✅T
/.A business that selects a differentiation strategy would naturally structure itself around
low-
cost activities. - Answer-✅F
/.Porter defines value as the amount of money that a customer is willing to pay for a
resource,
product, or service. - Answer-✅T
/.The difference between the value that an activity generates and the cost of the activity
is
called revenue. - Answer-✅F
/.A business with a differentiation strategy will add cost to an activity only as long as the
activity has a positive margin. - Answer-✅T
/.A generic value chain consists of five primary activities and four support activities. -
Answer-✅T
/.Inbound logistics is a supporting activity in the value chain of a manufacturing firm. -
Answer-✅F
/.Activities such as collecting, storing, and physically distributing the product to buyers
are
considered as primary activities in a value chain. - Answer-✅T
/.In the inbound logistics activity of a value chain, the manufacturer receives, stores, and
disseminates inputs to the product. - Answer-✅T
/.Outbound logistics refer to transforming inputs into the final product. - Answer-✅F
/.A furniture manufacturer delivers products to its customers' houses. This is an
example of
inbound logistics. - Answer-✅F
/.The primary activity of sales and marketing is the collection, storage, and physical
distribution of the products to the buyers. - Answer-✅F
ANSWERS
/. An organization's goals and objectives are determined by its competitive strategy. -
Answer-✅T
/.Organizational strategy begins with the formation of a value chain. - Answer-✅F
/.A major drawback associated with Porter's five forces model is that it ignores the
rivalry
among firms in the industry. - Answer-✅F
/.A major drawback of the five forces model is that it does not analyze the threat of
substitutes
when forming a corporate strategy. - Answer-✅F
/.According to Porter's five forces model, the intensity of each of the forces determines
the
characteristics of the industry, how profitable it is, and how sustainable that profitability
will be. - Answer-✅T
/.The bargaining power of grain farmers in a surplus year is an example of a weak
market force. - Answer-✅T
/.The bargaining power of suppliers is a weak force when considering the example of
students
purchasing gasoline. - Answer-✅F
/.The bargaining power of customers of medicinal drugs is enhanced when
pharmaceutical
companies patent their products. - Answer-✅F
/.An organization responds to the structure of its industry by choosing a competitive
strategy. - Answer-✅T
/.A telecom service provider focusing on high-end users is following an industry-wide
differentiation strategy. - Answer-✅F
/.A furniture dealer offering a wide variety of designs to premium customers alone is
following an industry-wide cost leadership strategy. - Answer-✅F
, /.Providing the lowest cost across an industry can be referred to as focused cost-
leadership. - Answer-✅F
/.Focused differentiation refers to providing a better product or service within an industry
segment. - Answer-✅T
/.A business that selects a differentiation strategy would naturally structure itself around
low-
cost activities. - Answer-✅F
/.Porter defines value as the amount of money that a customer is willing to pay for a
resource,
product, or service. - Answer-✅T
/.The difference between the value that an activity generates and the cost of the activity
is
called revenue. - Answer-✅F
/.A business with a differentiation strategy will add cost to an activity only as long as the
activity has a positive margin. - Answer-✅T
/.A generic value chain consists of five primary activities and four support activities. -
Answer-✅T
/.Inbound logistics is a supporting activity in the value chain of a manufacturing firm. -
Answer-✅F
/.Activities such as collecting, storing, and physically distributing the product to buyers
are
considered as primary activities in a value chain. - Answer-✅T
/.In the inbound logistics activity of a value chain, the manufacturer receives, stores, and
disseminates inputs to the product. - Answer-✅T
/.Outbound logistics refer to transforming inputs into the final product. - Answer-✅F
/.A furniture manufacturer delivers products to its customers' houses. This is an
example of
inbound logistics. - Answer-✅F
/.The primary activity of sales and marketing is the collection, storage, and physical
distribution of the products to the buyers. - Answer-✅F
