Exam 5: Business-Level Strategy: Creating and Sustaining Competitive Advantages

Discuss the risks associated with each of these forms of competitive advantage-cost leadership, differentiation, and focus.

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Question 1

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Cost leadership: must pay attention to all aspects of value chain and manage overall costs; firm is vulnerable to raw material cost increases; the strategy is easily imitated; need to maintain parity on differentiation but lower prices.
Differentiation: risk that differentiation is not deemed as valuable; too much differentiation could make product or service less attractive; price premium can be higher than customers willing to pay; differentiation can be imitated; brand can be diluted through product line extensions; perceptions of differentiation may vary.
Focus: cost advantage may erode over time; competition may come from new entrants and imitation; there can be too much focus to satisfy buyer needs.

Convincing rivals not to enter a price war, protection from customer pressure to lower prices, and the ability to better withstand cost increases from suppliers characterize which type of competitive strategy?

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Question 2

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Concentrating solely on one form of competitive advantage generally leads to the highest possible level of profitability.

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Question 3

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False

The case of Cott beverages explains how this company

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Question 4

An important idea behind the "profit pool" concept is that there is always a strong relationship between the generation of revenues and the capturing of profits.

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Question 5

Which of the following is false regarding how a differentiation strategy can help a firm to improve its competitive position vis à vis Porter's five forces?

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Question 6

Explain how a cost leadership strategy permits a firm to address the five forces in their competitive environment so it can enjoy higher-than-normal profits.

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Question 7

Research has consistently shown that firms that achieve both cost and differentiation advantages tend to perform

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Question 8

Which of the following is a risk (or pitfall) of cost leadership?

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Question 9

A manufacturing business pursuing cost leadership will likely

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Question 10

All of the following are potential pitfalls of a focus strategy except

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Question 11

Developing uniqueness that is not valuable is:

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Question 12

The Keg Steakhouse & Bar has a simple operating formula. The Keg

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Question 13

The experience curve suggests that cutting prices is a good strategy

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Question 14

What are the benefits and risks associated with combining overall cost leadership and differentiation strategies?

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Question 15

A firm striving for cost leadership will typically spend relatively more on product related R&D than on process related R&D.

(True/False)

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Question 16

Differentiation provides protection against rivalry since brand loyalty lowers customer sensitivity to price and raises customer switching cost.

(True/False)

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Question 17

The experience curve concept suggests that production costs tend to decrease as production increases regardless of where an industry is at in its life cycle.

(True/False)

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Question 18

A disadvantage of firms that successfully integrate overall cost leadership and differentiation strategies is that they are relatively easy for competitors to imitate.

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Question 19

A successful differentiation strategy increases rivalry since buyers become more price-sensitive.

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Question 20

Showing 1 - 20 of 54

Discuss the risks associated with each of these forms of competitive advantage-cost leadership, differentiation, and focus.

Convincing rivals not to enter a price war, protection from customer pressure to lower prices, and the ability to better withstand cost increases from suppliers characterize which type of competitive strategy?

Concentrating solely on one form of competitive advantage generally leads to the highest possible level of profitability.

The case of Cott beverages explains how this company

An important idea behind the "profit pool" concept is that there is always a strong relationship between the generation of revenues and the capturing of profits.

Which of the following is false regarding how a differentiation strategy can help a firm to improve its competitive position vis à vis Porter's five forces?

Explain how a cost leadership strategy permits a firm to address the five forces in their competitive environment so it can enjoy higher-than-normal profits.

Research has consistently shown that firms that achieve both cost and differentiation advantages tend to perform

Which of the following is a risk (or pitfall) of cost leadership?

A manufacturing business pursuing cost leadership will likely

All of the following are potential pitfalls of a focus strategy except

Developing uniqueness that is not valuable is:

The Keg Steakhouse & Bar has a simple operating formula. The Keg

The experience curve suggests that cutting prices is a good strategy

What are the benefits and risks associated with combining overall cost leadership and differentiation strategies?

A firm striving for cost leadership will typically spend relatively more on product related R&D than on process related R&D.

Differentiation provides protection against rivalry since brand loyalty lowers customer sensitivity to price and raises customer switching cost.

The experience curve concept suggests that production costs tend to decrease as production increases regardless of where an industry is at in its life cycle.

A disadvantage of firms that successfully integrate overall cost leadership and differentiation strategies is that they are relatively easy for competitors to imitate.

A successful differentiation strategy increases rivalry since buyers become more price-sensitive.

Strategic Management: Creating Competitive Advantages

Analyzing the External Environment of the Firm: Creating Competitive Advantages

Assessing the Internal Environment of the Firm

Recognizing a Firms Intellectual Assets: Moving Beyond a Firms Tangible Resources

Corporate-Level Strategy: Creating Value Through Diversification

International Strategy: Creating Value in Global Markets

Entrepreneurial Strategy and Competitive Dynamics

Strategic Control and Corporate Governance

Creating Effective Organizational Designs

Strategic Leadership: Creating a Learning Organization and an Ethical Organization

Managing Innovation and Fostering Corporate Entrepreneurship

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