AFM 241 Chapter 2.3 & 2.4 Exam Unit With Correct Solutions.
sustainable competitive advantage - Answer Financial performance that consistently outperforms industry averages Environmental Scanning - Answer the acquisition and analysis of events and trends in the environment external to an organization Three tools to develop competitive advantage - Answer 1. Porter's Five Forces Model 2. Porter's Generic Strategies 3. Value Chains Porter's Five Forces - Answer 1. Threat of New Entry 2. Power of Suppliers 3. Power of Buyers 4. Threat of Substitutes 5. Existing Competitors How can IT help influence or shape the five forces? - Answer 1. Collects, processes, and reports Environmental Scan information 2. Provides the technology to support strategies to limit the threat of the forces Buyer Power - Answer The ability of buyers to affect the price of an item Switching costs - Answer The amount of benefits a consumer must give up to go to another buyer Loyalty Program - Answer Rewards customers based on the amount of business they do with a particular organization
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