WPC 480 Midterm Exam Questions with
Complete Solutions
The relative bargaining power of suppliers is high when incumbent firms face low
switching costs when changing suppliers.
A. True
B. False - Answer-False
According to the internal value chain analysis, which of the following is a primary
activity?
A. Research and Development
B. Supply Chain Mgt
C. Accounting
D. Human Resources - Answer-Supply Chain Mgt
_______________________ is best described as the difference between the value a
consumer attaches to a good and the cost to provide the good.
A. Profit
B. Economic Value Created
C. Consumer's Surplus
D. Producer's Surplus - Answer-Economic Value Created
Onivo Auto Inc. has been the leader in low-cost and fuel-efficient engine technology for
many years. It has been able to sustain its competitive advantage primarily because of
its highly efficient automobile engines, which competitors have been unable to develop
or buy at a reasonable price. In the context of the VRIO framework, which of the
following resource attributes most likely underpins Onivo's competitive advantage?
A. The resource is easy to replicate.
B. The resource is costly to imitate.
C. The resource neutralizes external opportunities - Answer-The resource is costly to
imitate.
Which is a source of increasing customers' willingness to pay?
A. Common Product Feature
B. Learning Curve Effect
C. Poor Customer Service
D. Existence of Great Compliments - Answer-Existence of Great Compliments
Which of the following is not true about the business-level strategy of Walmart?
, A. Walmart has been pursuing cost leadership strategy.
B. Walmart charges lower price for national brand goods, increasing consumers'
surplus.
C. Heavy investment in smart IT systems is not consistent with Walmart's overall
strategic position.
D. Real-time EDI with suppliers helped Walmart lower inventory management cost. -
Answer-Heavy investment in smart IT systems is not consistent with Walmart's overall
strategic position
What is strategy? - Answer-An integrated set of goal-directed actions a firm takes to
gain and sustain competitive advantages
Competitive Advantage - Answer-Occurs when an organization is able to
create more economic value than the marginal (breakeven)
competitor in its product market (through superior differentiation
and/or lower costs). [Temporary or Sustainable]
Sustainable Competitive Advantage - Answer-Outperforming competitors or the industry
average over a prolonged period of time
Competitive Disadvantage - Answer-Underperformance relative to other competitors in
the
same industry or the industry average
Competitive Parity - Answer-Performance of two or more firms at the same level
Vision - Answer-What do we want to accomplish?
Mission - Answer-How do we accomplish our goals? What do we do to accomplish our
goals?
Values - Answer-What commitments do we make? What guardrails do we put in place?
How can we act legally and ethically in pursuit of the vision and mission?
Product-Oriented Vision Statement - Answer-Defines a business in terms of a good or
service provided
ex. "We aim to be the best player in the typewriter business"
Cons: Less flexible, not needs-based
Customer-Oriented Vision Statement - Answer-Defines a business in terms of providing
solutions to customer needs
Ex. Nike: "To bring inspiration and innovation to every athlete in the world"
Complete Solutions
The relative bargaining power of suppliers is high when incumbent firms face low
switching costs when changing suppliers.
A. True
B. False - Answer-False
According to the internal value chain analysis, which of the following is a primary
activity?
A. Research and Development
B. Supply Chain Mgt
C. Accounting
D. Human Resources - Answer-Supply Chain Mgt
_______________________ is best described as the difference between the value a
consumer attaches to a good and the cost to provide the good.
A. Profit
B. Economic Value Created
C. Consumer's Surplus
D. Producer's Surplus - Answer-Economic Value Created
Onivo Auto Inc. has been the leader in low-cost and fuel-efficient engine technology for
many years. It has been able to sustain its competitive advantage primarily because of
its highly efficient automobile engines, which competitors have been unable to develop
or buy at a reasonable price. In the context of the VRIO framework, which of the
following resource attributes most likely underpins Onivo's competitive advantage?
A. The resource is easy to replicate.
B. The resource is costly to imitate.
C. The resource neutralizes external opportunities - Answer-The resource is costly to
imitate.
Which is a source of increasing customers' willingness to pay?
A. Common Product Feature
B. Learning Curve Effect
C. Poor Customer Service
D. Existence of Great Compliments - Answer-Existence of Great Compliments
Which of the following is not true about the business-level strategy of Walmart?
, A. Walmart has been pursuing cost leadership strategy.
B. Walmart charges lower price for national brand goods, increasing consumers'
surplus.
C. Heavy investment in smart IT systems is not consistent with Walmart's overall
strategic position.
D. Real-time EDI with suppliers helped Walmart lower inventory management cost. -
Answer-Heavy investment in smart IT systems is not consistent with Walmart's overall
strategic position
What is strategy? - Answer-An integrated set of goal-directed actions a firm takes to
gain and sustain competitive advantages
Competitive Advantage - Answer-Occurs when an organization is able to
create more economic value than the marginal (breakeven)
competitor in its product market (through superior differentiation
and/or lower costs). [Temporary or Sustainable]
Sustainable Competitive Advantage - Answer-Outperforming competitors or the industry
average over a prolonged period of time
Competitive Disadvantage - Answer-Underperformance relative to other competitors in
the
same industry or the industry average
Competitive Parity - Answer-Performance of two or more firms at the same level
Vision - Answer-What do we want to accomplish?
Mission - Answer-How do we accomplish our goals? What do we do to accomplish our
goals?
Values - Answer-What commitments do we make? What guardrails do we put in place?
How can we act legally and ethically in pursuit of the vision and mission?
Product-Oriented Vision Statement - Answer-Defines a business in terms of a good or
service provided
ex. "We aim to be the best player in the typewriter business"
Cons: Less flexible, not needs-based
Customer-Oriented Vision Statement - Answer-Defines a business in terms of providing
solutions to customer needs
Ex. Nike: "To bring inspiration and innovation to every athlete in the world"
