Question 1

List the features that need to be included in functional strategies to improve differentiation.

Accepted Answer

To successfully differentiate itself, a company must pursue the right actions at the functional level and organize itself appropriately. Pursuing functional-level strategies that enable the company to achieve superior quality in terms of both reliability and excellence are important, as in an emphasis upon innovation in the product offering, and high levels of customer responsiveness. A firm that implements the differentiation strategy cannot ignore efficiency. Because of its strategic choice, the differentiated company is likely to have a higher cost structure than the low-cost player in its industry. Specific functional-level strategies designed to improve differentiation include:
1. Customization of the product offering and marketing mix to different market segments
2. Designing product offerings that have high perceived quality in terms of their functions, features, and performance, in addition to being reliable
3. A well-developed customer-care function for quickly handling and responding to customer inquiries and problems
4. Marketing efforts focused on brand building and perceived differentiation from rivals
5. Hiring and employee development strategies designed to ensure that employees act in a manner that is consistent with the image that the company is trying to project to the world

Question 2

A segmentation strategy requires that a company:

Accepted Answer

A)  standardize its products. 
B)  offer its products at low costs. 
C)  customize its products. 
D)  produce one basic offering. 
E)  attain high economies of scale by achieving a high volume of sales. 
A)  standardize its products. 
B)  offer its products at low costs. 
C)  customize its products. 
D)  produce one basic offering. 
E)  attain high economies of scale by achieving a high volume of sales. C

Question 3

Which of the following generic competitive strategies would a producer of commodity such as steel most likely pursue?

Accepted Answer

A)  Exclusive dealing 
B)  Broad differentiation 
C)  Focus differentiation 
D)  Broad low cost 
E)  Horizontal integration 
A)  Exclusive dealing 
B)  Broad differentiation 
C)  Focus differentiation 
D)  Broad low cost 
E)  Horizontal integration D

Question 4

Define the generic business-level strategies companies pursue. Provide an example of a company that represents each type of strategy.

Accepted Answer

There are four generic business-level st

Question 5

Focus strategy can be defined as the strategy:

Accepted Answer

A)  of merging with an established company to gain monopoly over the market. 
B)  a company uses when it decides to allocate the company resources equally among all the marketing segments. 
C)  a company uses when it decides to serve a limited number of segments, or just one segment of the market. 
D)  a company uses when it decides to ignore the different needs of different market segments to produce one standardized product for all the customers. 
E)  of closing one or more business units in order to minimize the losses. 
A)  of merging with an established company to gain monopoly over the market. 
B)  a company uses when it decides to allocate the company resources equally among all the marketing segments. 
C)  a company uses when it decides to serve a limited number of segments, or just one segment of the market. 
D)  a company uses when it decides to ignore the different needs of different market segments to produce one standardized product for all the customers. 
E)  of closing one or more business units in order to minimize the losses.

Question 6

When a company pioneers new process innovations that lead to value innovation, it effectively changes the game in an industry and may be able to outperform its rivals for a long period of time.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is NOT a principal danger of a low-cost position approach?

Accepted Answer

A)  Substitute goods or services 
B)  Technological change 
C)  Imitation of production techniques 
D)  Changes in consumer tastes 
E)  Rivals lowering their costs 
A)  Substitute goods or services 
B)  Technological change 
C)  Imitation of production techniques 
D)  Changes in consumer tastes 
E)  Rivals lowering their costs

Question 8

A differentiated company is protected from intense price rivalry within its industry by its brand loyalty which is built through marketing campaigns and expensive product development efforts.

Accepted Answer

A) True 
 B)False

Question 9

A disadvantage of pursuing a low-cost strategy is that:

Accepted Answer

A)  it makes it difficult for the firm to customize its product offerings. 
B)  price wars make it hard to compete with differentiators. 
C)  it makes it easier for rivals to enter the firm's market. 
D)  it makes it difficult to respond to demands from deep price discounts from powerful buyers and still make money. 
E)  it makes it difficult to absorb cost increases that may be passed on downstream by powerful suppliers. 
A)  it makes it difficult for the firm to customize its product offerings. 
B)  price wars make it hard to compete with differentiators. 
C)  it makes it easier for rivals to enter the firm's market. 
D)  it makes it difficult to respond to demands from deep price discounts from powerful buyers and still make money. 
E)  it makes it difficult to absorb cost increases that may be passed on downstream by powerful suppliers.

Question 10

Which of the following statements about differentiation and cost structure is true?

Accepted Answer

A)  Differentiation and cost structure decisions affect one another. 
B)  Differentiation and cost structure decisions do not affect one another. 
C)  Companies that focus on the higher-value end of the market tend to have a lower cost structure. 
D)  Differentiation decisions do not affect a company's profitability. 
E)  Cost structure decisions do not affect a company's profitability. 
A)  Differentiation and cost structure decisions affect one another. 
B)  Differentiation and cost structure decisions do not affect one another. 
C)  Companies that focus on the higher-value end of the market tend to have a lower cost structure. 
D)  Differentiation decisions do not affect a company's profitability. 
E)  Cost structure decisions do not affect a company's profitability.

Question 11

The basic proposition of the blue ocean strategy is that many successful companies have built their competitive advantage by initiating price wars and driving weaker rivals out of the industry.

Accepted Answer

A) True 
 B)False

Question 12

Companies that focus on the higher-income or higher-value end of the market will tend to have a higher cost structure.

Accepted Answer

A) True 
 B)False

Question 13

Delta Air Lines used to advertise its high-quality air travel service by saying it flew "anywhere, anytime." What generic business-level strategy is represented by this advertisement?

Accepted Answer

A)  Broad low-cost strategy 
B)  Broad differentiation strategy 
C)  Vertical integration strategy 
D)  Right-time marketing strategy 
E)  Rapid growth strategy 
A)  Broad low-cost strategy 
B)  Broad differentiation strategy 
C)  Vertical integration strategy 
D)  Right-time marketing strategy 
E)  Rapid growth strategy

Question 14

Compared to a differentiator, the company that follows a low-cost strategy:

Accepted Answer

A)  distinguishes its products from those of rivals by offering something that they find hard to match. 
B)  absorbs cost increases by powerful suppliers while keeping to their lower pricing. 
C)  allows the company to charge a premium price for its good or service, should it choose to do so. 
D)  uses perceived superior value to generate growth in demand among customers. 
E)  creates entry barriers for rivals with greater brand loyalty to the specific products offered. 
A)  distinguishes its products from those of rivals by offering something that they find hard to match. 
B)  absorbs cost increases by powerful suppliers while keeping to their lower pricing. 
C)  allows the company to charge a premium price for its good or service, should it choose to do so. 
D)  uses perceived superior value to generate growth in demand among customers. 
E)  creates entry barriers for rivals with greater brand loyalty to the specific products offered.

Question 15

The advantage that focused companies have over their broad market rivals is that they can:

Accepted Answer

A)  sell on non-price factors, such as design or customer service. 
B)  respond to demands for deep price discounts. 
C)  can establish a cost advantage and customize offerings for a niche market. 
D)  initiate a price war to grow volume and drive its weaker rivals out of the industry. 
E)  absorb cost increases that may be passed on downstream by powerful suppliers. 
A)  sell on non-price factors, such as design or customer service. 
B)  respond to demands for deep price discounts. 
C)  can establish a cost advantage and customize offerings for a niche market. 
D)  initiate a price war to grow volume and drive its weaker rivals out of the industry. 
E)  absorb cost increases that may be passed on downstream by powerful suppliers.

Question 16

Nick, a professional magician, is often invited to perform magic tricks at birthday parties and other social gatherings from across the country. However, he offers his services only to clients who stay in the same city as him. He is also known to charge less than other magicians in the city. Nick is pursuing which generic business-level strategy?

Accepted Answer

A)  Broad differentiation strategy 
B)  Focus differentiation strategy 
C)  Focus low-cost strategy 
D)  Broad low-cost strategy 
E)  Medium market segmentation strategy 
A)  Broad differentiation strategy 
B)  Focus differentiation strategy 
C)  Focus low-cost strategy 
D)  Broad low-cost strategy 
E)  Medium market segmentation strategy

Question 17

Acknowledging the demand for healthier drinking options, a large beverage company has developed a new line of beverages with no calories and no artificial sweeteners to add to its existing product line. Which of the following approaches to market segmentation is the beverage company using?

Accepted Answer

A)  Broad low-cost strategy 
B)  Focus differentiation strategy 
C)  Medium market segmentation strategy 
D)  Focus low-cost strategy 
E)  Broad differentiation strategy 
A)  Broad low-cost strategy 
B)  Focus differentiation strategy 
C)  Medium market segmentation strategy 
D)  Focus low-cost strategy 
E)  Broad differentiation strategy

Question 18

When a company recognizes that the needs of one market segment is not the same as another and accordingly customizes its product offerings, it is said to be pursuing a __________ strategy.

Accepted Answer

A)  stuck-in-the-middle 
B)  standardization 
C)  segmentation 
D)  focus 
E)  low-cost 
A)  stuck-in-the-middle 
B)  standardization 
C)  segmentation 
D)  focus 
E)  low-cost

Question 19

Which of the following organizational arrangements does NOT support a company taking a low-cost position?

Accepted Answer

A)  Incentive systems that empower employees to suggest and pursue initiatives that are consistent with productivity improvements. 
B)  A frugal company culture that emphasizes the need to control costs. 
C)  Measurement and control systems that focus on productivity and cost containment. 
D)  A multi-level structure with several tiers in the management hierarchy. 
E)  Clear lines of accountability and control. 
A)  Incentive systems that empower employees to suggest and pursue initiatives that are consistent with productivity improvements. 
B)  A frugal company culture that emphasizes the need to control costs. 
C)  Measurement and control systems that focus on productivity and cost containment. 
D)  A multi-level structure with several tiers in the management hierarchy. 
E)  Clear lines of accountability and control.

Question 20

Mike's Eatery, a fast-food chain, neither customizes its product offerings nor sells new products based on market segments. Mike's Eatery is pursuing a standardization strategy.

Accepted Answer

A) True 
 B)False

List the features that need to be included in functional strategies to improve differentiation.

A segmentation strategy requires that a company:

Which of the following generic competitive strategies would a producer of commodity such as steel most likely pursue?

Define the generic business-level strategies companies pursue. Provide an example of a company that represents each type of strategy.

Focus strategy can be defined as the strategy:

When a company pioneers new process innovations that lead to value innovation, it effectively changes the game in an industry and may be able to outperform its rivals for a long period of time.

Which of the following is NOT a principal danger of a low-cost position approach?

A differentiated company is protected from intense price rivalry within its industry by its brand loyalty which is built through marketing campaigns and expensive product development efforts.

A disadvantage of pursuing a low-cost strategy is that:

Which of the following statements about differentiation and cost structure is true?

The basic proposition of the blue ocean strategy is that many successful companies have built their competitive advantage by initiating price wars and driving weaker rivals out of the industry.

Companies that focus on the higher-income or higher-value end of the market will tend to have a higher cost structure.

Delta Air Lines used to advertise its high-quality air travel service by saying it flew "anywhere, anytime." What generic business-level strategy is represented by this advertisement?

Compared to a differentiator, the company that follows a low-cost strategy:

The advantage that focused companies have over their broad market rivals is that they can:

Acknowledging the demand for healthier drinking options, a large beverage company has developed a new line of beverages with no calories and no artificial sweeteners to add to its existing product line. Which of the following approaches to market segmentation is the beverage company using?

When a company recognizes that the needs of one market segment is not the same as another and accordingly customizes its product offerings, it is said to be pursuing a __________ strategy.

Which of the following organizational arrangements does NOT support a company taking a low-cost position?

Mike's Eatery, a fast-food chain, neither customizes its product offerings nor sells new products based on market segments. Mike's Eatery is pursuing a standardization strategy.

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: the Identification of Opportunities and Threats

Internal Analysis: Resources and Competitive Advantage

Competitive Advantage Through Functional-Level Strategies

Business-Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate-Level Strategy: Related and Unrelated Diversification

Corporate Governance, Social Responsibility, and Ethics

Implementing Strategy Through Organization

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Exam 5: Business-Level Strategy

List the features that need to be included in functional strategies to improve differentiation.

A segmentation strategy requires that a company:

Which of the following generic competitive strategies would a producer of commodity such as steel most likely pursue?

Define the generic business-level strategies companies pursue. Provide an example of a company that represents each type of strategy.

Focus strategy can be defined as the strategy:

When a company pioneers new process innovations that lead to value innovation, it effectively changes the game in an industry and may be able to outperform its rivals for a long period of time.

Which of the following is NOT a principal danger of a low-cost position approach?

A differentiated company is protected from intense price rivalry within its industry by its brand loyalty which is built through marketing campaigns and expensive product development efforts.

A disadvantage of pursuing a low-cost strategy is that:

Which of the following statements about differentiation and cost structure is true?

The basic proposition of the blue ocean strategy is that many successful companies have built their competitive advantage by initiating price wars and driving weaker rivals out of the industry.

Companies that focus on the higher-income or higher-value end of the market will tend to have a higher cost structure.

Delta Air Lines used to advertise its high-quality air travel service by saying it flew "anywhere, anytime." What generic business-level strategy is represented by this advertisement?

Compared to a differentiator, the company that follows a low-cost strategy:

The advantage that focused companies have over their broad market rivals is that they can:

Acknowledging the demand for healthier drinking options, a large beverage company has developed a new line of beverages with no calories and no artificial sweeteners to add to its existing product line. Which of the following approaches to market segmentation is the beverage company using?

When a company recognizes that the needs of one market segment is not the same as another and accordingly customizes its product offerings, it is said to be pursuing a __________ strategy.

Which of the following organizational arrangements does NOT support a company taking a low-cost position?

Mike's Eatery, a fast-food chain, neither customizes its product offerings nor sells new products based on market segments. Mike's Eatery is pursuing a standardization strategy.

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: the Identification of Opportunities and Threats

Internal Analysis: Resources and Competitive Advantage

Competitive Advantage Through Functional-Level Strategies

Business-Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate-Level Strategy: Related and Unrelated Diversification

Corporate Governance, Social Responsibility, and Ethics

Implementing Strategy Through Organization

Filters