Question 1

If a firm has a successful differentiation strategy, it is not necessary to attain parity on cost.

Accepted Answer

A) True 
 B)False  False

Question 2

Use the value chain as a framework to explain how the competitive advantage of differentiation can create products and/or services that are highly valued by customers.

Accepted Answer

The firm infrastructure would include superior information systems designed to integrate value creating activities and improve quality. The human resource management systems would be designed to attract talented engineers and scientists. Technology development would feature superior material handling and sorting technology and procurement would include the purchase of high-quality components from prestigious outlets.

Question 3

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

Accepted Answer

A) True 
 B)False  False

Question 4

An important pitfall of an integrated overall cost leadership and differentiation strategy is that firms may fail to implement either one and become 'stuck-in-the-middle.'

Accepted Answer

A) True 
 B)False

Question 5

A successful differentiation strategy lowers entry barriers because of customer loyalty and the firm's ability to provide uniqueness in its products and services.

Accepted Answer

A) True 
 B)False

Question 6

The focus strategy refers to focusing on the 'non-price' attributes of a company's products.

Accepted Answer

A) True 
 B)False

Question 7

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.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Describe the two most dominant schools of strategic management.

Accepted Answer

The two most dominant schools are arguab

Question 10

The experience curve suggests that cutting prices is a good strategy

Accepted Answer

A)  if it can induce greater demand and thereby help a firm travel down the experience curve faster. 
B)  in industries characterized by high economies of scale. 
C)  in the maturity stage of the industry life cycle. 
D)  in the decline stage of the industry life cycle. 
A)  if it can induce greater demand and thereby help a firm travel down the experience curve faster. 
B)  in industries characterized by high economies of scale. 
C)  in the maturity stage of the industry life cycle. 
D)  in the decline stage of the industry life cycle.

Question 11

The text discusses three approaches to combining overall cost leadership and differentiation competitive advantages. These are the following, except

Accepted Answer

A)  automated and flexible manufacturing systems. 
B)  exploiting the profit pool concept for competitive advantage. 
C)  coordinating the 'extended' value chain by way of information technology. 
D)  deriving benefits from highly focused and high technology markets. 
A)  automated and flexible manufacturing systems. 
B)  exploiting the profit pool concept for competitive advantage. 
C)  coordinating the 'extended' value chain by way of information technology. 
D)  deriving benefits from highly focused and high technology markets.

Question 12

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

Accepted Answer

A)  By increasing a firm's margins, it avoids the need for a low-cost position 
B)  It helps a firm to deal with supplier power and reduces buyer power since buyers lack comparable alternatives 
C)  Supplier power is increased because suppliers will be able to charge higher prices for their inputs 
D)  Firms will enjoy high customer loyalty, thus experiencing less threat from substitutes than its competitors 
A)  By increasing a firm's margins, it avoids the need for a low-cost position 
B)  It helps a firm to deal with supplier power and reduces buyer power since buyers lack comparable alternatives 
C)  Supplier power is increased because suppliers will be able to charge higher prices for their inputs 
D)  Firms will enjoy high customer loyalty, thus experiencing less threat from substitutes than its competitors

Question 13

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?

Accepted Answer

A)  overall cost leadership 
B)  differentiation 
C)  differentiation focus 
D)  cost leadership focus 
A)  overall cost leadership 
B)  differentiation 
C)  differentiation focus 
D)  cost leadership focus

Question 14

The following are potential pitfalls of a focus strategy, except

Accepted Answer

A)  erosion of cost advantages within the narrow segment. 
B)  all rivals share a common input or raw material. 
C)  even product and service offerings that are highly focused are subject to competition from new entrants and from imitation. 
D)  focusers can become too focused to satisfy buyer needs. 
A)  erosion of cost advantages within the narrow segment. 
B)  all rivals share a common input or raw material. 
C)  even product and service offerings that are highly focused are subject to competition from new entrants and from imitation. 
D)  focusers can become too focused to satisfy buyer needs.

Question 15

BMW integrates several different dimensions along the value chain at the same time.

Accepted Answer

A) True 
 B)False

Question 16

A firm can achieve differentiation through the following means, except

Accepted Answer

A)  improving brand image. 
B)  better customer service. 
C)  offering lower prices to frequent customers. 
D)  adding additional product features. 
A)  improving brand image. 
B)  better customer service. 
C)  offering lower prices to frequent customers. 
D)  adding additional product features.

Question 17

Which of the following are good examples of firms that follows the strategy of differentiation based on prestige or brand image?

Accepted Answer

A)  North Face and Loblaws 
B)  3M and Cirque du Soleil 
C)  Lexus and President's Choice 
D)  BMW, Roots, and Holt Renfrew 
A)  North Face and Loblaws 
B)  3M and Cirque du Soleil 
C)  Lexus and President's Choice 
D)  BMW, Roots, and Holt Renfrew

Question 18

The primary aim of strategic management at the business level is

Accepted Answer

A)  maximizing risk-return trade-offs through diversification. 
B)  achieving a low-cost position. 
C)  maximizing differentiation of products and/or services. 
D)  achieving competitive advantage(s). 
A)  maximizing risk-return trade-offs through diversification. 
B)  achieving a low-cost position. 
C)  maximizing differentiation of products and/or services. 
D)  achieving competitive advantage(s).

Question 19

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

Accepted Answer

Firms that successfully integrate both d

Question 20

Primary value chain activities that involve the effective layout of receiving dock operations (inbound logistics) and support value chain activities that include expertise in process engineering (technology development) characterize what generic strategy?

Accepted Answer

A)  Differentiation 
B)  Overall cost leadership 
C)  Differentiation focus 
D)  Stuck-in-the-middle 
A)  Differentiation 
B)  Overall cost leadership 
C)  Differentiation focus 
D)  Stuck-in-the-middle

If a firm has a successful differentiation strategy, it is not necessary to attain parity on cost.

Use the value chain as a framework to explain how the competitive advantage of differentiation can create products and/or services that are highly valued by customers.

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

An important pitfall of an integrated overall cost leadership and differentiation strategy is that firms may fail to implement either one and become 'stuck-in-the-middle.'

A successful differentiation strategy lowers entry barriers because of customer loyalty and the firm's ability to provide uniqueness in its products and services.

The focus strategy refers to focusing on the 'non-price' attributes of a company's products.

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.

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

Describe the two most dominant schools of strategic management.

The experience curve suggests that cutting prices is a good strategy

The text discusses three approaches to combining overall cost leadership and differentiation competitive advantages. These are the following, except

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

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?

The following are potential pitfalls of a focus strategy, except

BMW integrates several different dimensions along the value chain at the same time.

A firm can achieve differentiation through the following means, except

Which of the following are good examples of firms that follows the strategy of differentiation based on prestige or brand image?

The primary aim of strategic management at the business level is

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

Primary value chain activities that involve the effective layout of receiving dock operations (inbound logistics) and support value chain activities that include expertise in process engineering (technology development) characterize what generic strategy?

Strategic Management: Creating Competitive Advantages: an Overview

Analyzing the External Environment of the Firm

Analyzing the Internal Environment of the Firm

Assessing the Intellectual Assets of the Firm

Corporate-Level Strategy: Creating Value Through Diversification

International Strategy: Creating Value in Global Markets

Industry Change and Competitive Dynamics

Creating Effective Organizational Designs

Strategic Control and Corporate Governance

Strategic Leadership: Creating a Learning, Ethical, and Socially Res

Managing Innovation and Fostering Entrepreneurship

Filters

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

If a firm has a successful differentiation strategy, it is not necessary to attain parity on cost.

Use the value chain as a framework to explain how the competitive advantage of differentiation can create products and/or services that are highly valued by customers.

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

An important pitfall of an integrated overall cost leadership and differentiation strategy is that firms may fail to implement either one and become 'stuck-in-the-middle.'

A successful differentiation strategy lowers entry barriers because of customer loyalty and the firm's ability to provide uniqueness in its products and services.

The focus strategy refers to focusing on the 'non-price' attributes of a company's products.

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.

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

Describe the two most dominant schools of strategic management.

The experience curve suggests that cutting prices is a good strategy

The text discusses three approaches to combining overall cost leadership and differentiation competitive advantages. These are the following, except

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

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?

The following are potential pitfalls of a focus strategy, except

BMW integrates several different dimensions along the value chain at the same time.

A firm can achieve differentiation through the following means, except

Which of the following are good examples of firms that follows the strategy of differentiation based on prestige or brand image?

The primary aim of strategic management at the business level is

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

Primary value chain activities that involve the effective layout of receiving dock operations (inbound logistics) and support value chain activities that include expertise in process engineering (technology development) characterize what generic strategy?

Strategic Management: Creating Competitive Advantages: an Overview

Analyzing the External Environment of the Firm

Analyzing the Internal Environment of the Firm

Assessing the Intellectual Assets of the Firm

Corporate-Level Strategy: Creating Value Through Diversification

International Strategy: Creating Value in Global Markets

Industry Change and Competitive Dynamics

Creating Effective Organizational Designs

Strategic Control and Corporate Governance

Strategic Leadership: Creating a Learning, Ethical, and Socially Res

Managing Innovation and Fostering Entrepreneurship

Filters