Which of the following is a component of Porter’s 5-Forces Model?

Threat of substitutes

Rivalry among suppliers

Bargaining power of competitors

Barriers to existence


Deelited Inc. is a company that manufactures soft toys for children. The company operates on a very large scale, and this has enabled it to price its toys at competitive rates while still retaining good product quality. Since it is extremely difficult for a new entrant to sell toys at such low prices, few competitors have emerged for Deelited in the past five years. In this case, the low threat that Deelited Inc. faces from new entrants can be attributed to

supply-side economies of scale.

incumbency advantages.

demand-side benefits of scale.

high capital requirements of the industry.


Which of the following factors discourages the entry of new players into a market by reducing consumers’ preference to purchase from them?

Demand-side benefits of scale

Supply-side economies of scale

Incumbency advantages

Unequal access to distribution channels


A buyer will have high bargaining power relative to a supplier when

the supplier’s products are largely undifferentiated.

the supplier’s products are highly specialized.

there are few suppliers who provide the required product.

the demand for the supplier’s product is high.


Which of the following is an example of an intangible resource of a firm?


Computing systems

Brand name

Raw materials


Which of the following functions is a support activity of a firm?

Technological development

Marketing and sales

Outbound and inbound logistics



Which of the following refers to activities involved with collecting, storing, and physically distributing a final product to customers?

Outbound logistics

Inbound logistics




SWOT analysis is a tool that allows the managers of a firm to

analyze and evaluate the strengths, weaknesses, opportunities, and threats faced by their competitors in the market.

get an overview of the firm’s internal strengths and weaknesses and predict external threats and opportunities.

compare the firm’s processes and performance metrics with those of its competitors and other leading players in the industry.

check the progress of projects that are yet to be completed and set more realistic deadlines for them.


A _____ strategy aims to provide a product or service at as low a price as possible to a broad audience.



cost leadership

mass distribution


Which of the following is true of a differentiation strategy?

Differentiation strategies based on distribution systems are generally unsuccessful.

More than one firm can compete successfully based on differentiation in an industry.

An advantage of differentiation is that customers do not have to pay a premium price for a firm’s product, even if that product is truly differentiated in terms of value.

A firm can achieve and sustain differentiation as long as its price premium is less than the extra costs incurred in being unique.


Vanguard’s strategy is ______:

All of these choices are correct.


Difficult to duplicate effectively.

Market driven.


Vanguard’s business model is one of:

Global diversity.

High cost.

Low cost.

High quality


Vanguard differentiated itself by:

Employing a business level strategy of cost containment.

Advantageous negotiations with brokerage firms.

Positioning the company as a global leader.

Maintaining a large investment in branding.


Vanguard maintains its competitive advantage through:

Employing a low cost strategy in all aspects of their business.

Its identification of good buys in the market place.

Buying low and selling high.

Strong branding.


The future of Vanguard is one that is:

Too difficult to predict.

Promising because of their strategic advantage.

Tentative because their strategy is easy to imitate.

Weak because of the rising cost of technology.


Theo Chocolate initially used which of the following strategies to try to achieve competitive advantage in the marketplace?


Economies of scale

Strategic flexibility

Cost leadership


In order to grow, Theo Chocolate had to adjust its product line because consumers and retail distributors were demanding simpler offerings that appealed to the mass market. The managers of Theo Chocolate may have implemented which of the following tools in making this decision?

SWOT analysis

Porter’s 5-Forces Model

First-mover advantage

Primary activities


What barrier to entry in the retail chocolate bar market did Theo Chocolate experience?

Restrictive government policy

High capital requirements

Unequal access to distribution channels

First-mover advantage