21. Supplier power is one of Porter’s five forces, and
it measures the suppliers’ ability to influence the prices they charge for
supplies (including materials, labor, and services).
22. Polaroid had a unique competitive advantage for
many years until it forgot to observe competitive intelligence. The firm went
bankrupt when people began taking digital pictures. Polaroid provides a great
example of Porter’s threat of new entrants.
23. Product differentiation occurs when a company
develops unique differences in its products or services with the intent to
24. Buyer power is the ability of buyers to affect the
price they must pay for an item.
25. Tiffany & Company competes in the marketplace
by offering high-cost custom jewelry. Tiffany & Company is following a
broad market and cost leadership strategy.
26. Porter has identified three generic business
strategies, including focused, broad cost leadership, and switching
27. According to Porter’s three generic strategies,
Walmart is following a business strategy that focuses on “broad market and
28. Value chain analysis views a firm as a series of
business processes that each adds value to the product or service.
29. A standardized set of activities that accomplish a
specific task is called a supply chain component.
30. The value chain will group a company’s activities
into two categories: primary value activities and support value