Past Year Questions on Chapter 1 & 2

MARCH 2013

Question 1

Describe five (5) primary value activities.

Five primary value activities are receive and store the raw materials, make the product or service, deliver the product or service, market and sell the product or service and service after sale. First, collect the raw materials and resources and distribute it to the manufacturing as needed . Then, the raw materials or inputs is transform to goods and services. Next, the goods and services will be distribute to the customers. Lastly, provide customers support after sale of goods and services. 

OCTOBER 2012

Question 1

a) Explain four (4) organizational information cultures
  
1. Information-Functional Culture
Employees use information as a means of exercising influence or power over others. For example,  a manager in sales refuses to share information with marketing. This causes marketing to need the sales manager's input each time a new sales strategy is developed.

2. Information-Sharing Culture
Employees across departments trust each other to use information (especially about problems and failures) to improve performance.

3. Information-Inquiring Culture
Employees across departments search for information to better understand the future and align themselves with current trends and new directions.

4. Information-Discovery Culture
Employees across departments are open to new insights about crisis and radical changes and seek ways to create competitive advantages.


Question 2

Describe three (3) Porter Generic Strategies. Support your answer with example.

1. Cost Leadership

• Becoming  a low-cost producer in the industry allows the company to lower their prices to customers.
• Competitors with higher costs cannot afford to compete with the low-cost leader on price.

2. Differentiation

• Create competitive advantage by distinguishing their products on one or more features important to their customers.
• Unique features or benefits may justify price differences or stimulate demand.

3. Focused Strategy

• Target  to a niche market.
• Concentrates on either cost leadership or differentiation.

 

MARCH 2012

Question 2

Porter's FIVE forces Model is a one of common tools used in industry to analyze and develop advantages. List and describe each of the five (5) forces in Porter's Five Forces Model.

• Buyer Power

Buyer power is the ability of buyers to affect the price they must pay for an item.  It is high when buyers have many choices of whom to buy from and low when their choices are few. One way to reduce buyer power is through loyalty programs. Loyalty program which rewards customers based on the amount of business they do with a particular organization.

• Supplier Power 

Supplier power is the suppliers’ ability to influence the prices they charge for supplies. Supplier power is high when buyers have few choices of whom to buy from and low when their choices are many. Supply chain consists of all parties involved in the procurement of a product or raw material or a product. Organizations that are buying goods and services in the supply chain can create a competitive advantage by locating alternative supply sources to decrease supplier power through B2B marketplaces.

•  Threat To Substitute Products and Services 

Threat of substitute products or services is high when there are many alternatives to a product or service and low when there are few alternatives from which to choose. Switching cost is costs that can make customers reluctant to switch to another product or service.

• Threat of New Entrants

Threat of new entrants is high when it is easy for new competitors to enter a market and low when there are significant entry barriers to entering a market. Entry barrier is a product or service feature that customers have come to expect from organizations in a particular industry and must be offered by an entering organization to compete and survive.

• Rivalry among Existing Competitors

Rivalry among existing competitors is high when competition is fierce in a market and low when competition is more complacent. Although competition is always more intense in some industries than in others, the overall trend is toward increased competition in just about every industry. Organizations typically follow one of Porter’s three generic strategies when entering a new market.