Question 1

What are the advantages of a differentiation strategy?

Accepted Answer

Each of the generic strategies offers ad

Question 2

Which of the following are created when the costs of offering goods and services decreases as a firm is able to sell more items?

Accepted Answer

A)  Economies of cost 
B)  Economies of demand 
C)  Economies of distribution 
D)  Economies of scale 
E)  Economies of supply 
A)  Economies of cost 
B)  Economies of demand 
C)  Economies of distribution 
D)  Economies of scale 
E)  Economies of supply

Question 3

Economies of scale occur because expenses are distributed across a greater number of items.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following constitutes a disadvantage of the differentiation strategy?

Accepted Answer

A)  A differentiation strategy lacks the capacity to generate buyer loyalty. 
B)  Competitors are able to imitate the features well enough that they are no longer unique. 
C)  The firm needs to attract huge numbers of customers in order to have a good overall level of profit. 
D)  Differentiation lacks an ability to obtain premium prices from customers. 
E)  A differentiation strategy allows the entrance of new companies in the market. 
A)  A differentiation strategy lacks the capacity to generate buyer loyalty. 
B)  Competitors are able to imitate the features well enough that they are no longer unique. 
C)  The firm needs to attract huge numbers of customers in order to have a good overall level of profit. 
D)  Differentiation lacks an ability to obtain premium prices from customers. 
E)  A differentiation strategy allows the entrance of new companies in the market.

Question 5

Most cost leaders spend little on advertising, market research, or research and development in order to be efficient.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is an advantage of cost leadership?

Accepted Answer

A)  It makes a firm following this strategy well positioned to withstand price competition from rivals. 
B)  The need for high sales volume requires low upfront investments in production and/or distribution capacity. 
C)  In markets that involve a lot of brand loyalty, cost leadership companies command the largest share in the market. 
D)  Low expenditure on market research helps firms following the cost leadership strategy to detect important environmental changes at a lower cost. 
E)  Highly fragmented markets offer firms following this strategy greater opportunities to attract a large segment of customers. 
A)  It makes a firm following this strategy well positioned to withstand price competition from rivals. 
B)  The need for high sales volume requires low upfront investments in production and/or distribution capacity. 
C)  In markets that involve a lot of brand loyalty, cost leadership companies command the largest share in the market. 
D)  Low expenditure on market research helps firms following the cost leadership strategy to detect important environmental changes at a lower cost. 
E)  Highly fragmented markets offer firms following this strategy greater opportunities to attract a large segment of customers.

Question 7

A hotel chain offers rooms which are priced higher than what other hotels in the same category offer. The services provided by the hotel are similar in quality when compared to the other firms. This situation makes it impossible for the hotel chain to compete either on the basis of price or on the basis of standout features. This hotel chain is a _____ organization.

Accepted Answer

A)  runner 
B)  preretailing 
C)  paste-up 
D)  rack jobber 
E)  stuck in the middle 
A)  runner 
B)  preretailing 
C)  paste-up 
D)  rack jobber 
E)  stuck in the middle

Question 8

A health drink company is known for launching drinks with flavors which are different from what are offered in the market. It regularly indulges in experimentation to come up with new and exotic flavored drinks. It also charges higher than what other health drink companies charge. Which of the following statements would hold true for this company?

Accepted Answer

A)  It offers generic and standardized products. 
B)  It does not invest in the field of market research. 
C)  It spends little on research and development. 
D)  It invests heavily in advertising and brand building. 
E)  It competes with its rivals on the basis of price. 
A)  It offers generic and standardized products. 
B)  It does not invest in the field of market research. 
C)  It spends little on research and development. 
D)  It invests heavily in advertising and brand building. 
E)  It competes with its rivals on the basis of price.

Question 9

In many cases, firms become stuck in the middle because firms are simply outmaneuvered by their rivals.

Accepted Answer

A) True 
 B)False

Question 10

According to Michael Porter, using a differentiation strategy means a company is competing based on _______ rather than ______and is seeking to attract a broad market.

Accepted Answer

A)  Uniqueness, Marketability 
B)  Uniqueness, Price 
C)  Price, Uniqueness 
D)  Price, Marketability 
E)  Marketability, Price 
A)  Uniqueness, Marketability 
B)  Uniqueness, Price 
C)  Price, Uniqueness 
D)  Price, Marketability 
E)  Marketability, Price

Question 11

Car manufacturers such as Lamborghini and Ferrari compete in the small super car category. These cars offer more than just transportation. They are known for their styling and state-of-the-art technology. This is an example of a(n):

Accepted Answer

A)  adaptive strategy. 
B)  pull strategy. 
C)  focused cost leadership strategy. 
D)  cost leadership strategy. 
E)  focused differentiation strategy. 
A)  adaptive strategy. 
B)  pull strategy. 
C)  focused cost leadership strategy. 
D)  cost leadership strategy. 
E)  focused differentiation strategy.

Question 12

A differentiation strategy also creates benefits relative to potential new entrants.

Accepted Answer

A) True 
 B)False

Question 13

The most popular set of generic strategies is based on the work of which Harvard Business School Professor?

Accepted Answer

A)  John Kotter 
B)  Michael Porter 
C)  Bill George 
D)  Clayton Christensen 
E)  Michael Taylor 
A)  John Kotter 
B)  Michael Porter 
C)  Bill George 
D)  Clayton Christensen 
E)  Michael Taylor

Question 14

Cost leaders' emphasis on efficiency makes them vulnerable to price competition from rivals.

Accepted Answer

A) True 
 B)False

Question 15

A company that sells dairy products purchases large quantities of milk from the local dairy farms. Since the quantity purchased is very high, the company is able to demand and get price concessions from the dairy farms. The company prices its dairy products at a lower rate than its competitors. The greater quantity of products sold compensates for the low price. This is an example of:

Accepted Answer

A)  economies of scale. 
B)  economies of supply. 
C)  economies of demand. 
D)  economies of distribution. 
E)  economies of cost. 
A)  economies of scale. 
B)  economies of supply. 
C)  economies of demand. 
D)  economies of distribution. 
E)  economies of cost.

Question 16

A firm following a differentiation strategy attempts to convince customers to pay a premium price for its good or services by providing unique and desirable features.

Accepted Answer

A) True 
 B)False

Question 17

A focused differentiation strategy requires offering unique features that fulfill the demands of a narrow market. All of the following firms are examples except:

Accepted Answer

A)  Maserati 
B)  Old Rip Van Winkle Distillery 
C)  Build a Bear Workshop 
D)  Cinnabon 
E)  Papa Murphy's 
A)  Maserati 
B)  Old Rip Van Winkle Distillery 
C)  Build a Bear Workshop 
D)  Cinnabon 
E)  Papa Murphy's

Question 18

Customers, in many cases, may simply prefer a cheaper alternative to a unique product sold at a premium price.

Accepted Answer

A) True 
 B)False

Question 19

A(n) _____ strategy requires offering unique features that fulfill the demands of a narrow market.

Accepted Answer

A)  focused cost leadership 
B)  cost leadership 
C)  focused differentiation 
D)  adaptive 
E)  pull 
A)  focused cost leadership 
B)  cost leadership 
C)  focused differentiation 
D)  adaptive 
E)  pull

Question 20

A firm following the focused cost strategy necessarily charges the lowest prices in the industry.

Accepted Answer

A) True 
 B)False

What are the advantages of a differentiation strategy?

Which of the following are created when the costs of offering goods and services decreases as a firm is able to sell more items?

Economies of scale occur because expenses are distributed across a greater number of items.

Which of the following constitutes a disadvantage of the differentiation strategy?

Most cost leaders spend little on advertising, market research, or research and development in order to be efficient.

Which of the following is an advantage of cost leadership?

In many cases, firms become stuck in the middle because firms are simply outmaneuvered by their rivals.

According to Michael Porter, using a differentiation strategy means a company is competing based on _ rather than and is seeking to attract a broad market.

Car manufacturers such as Lamborghini and Ferrari compete in the small super car category. These cars offer more than just transportation. They are known for their styling and state-of-the-art technology. This is an example of a(n):

A differentiation strategy also creates benefits relative to potential new entrants.

The most popular set of generic strategies is based on the work of which Harvard Business School Professor?

Cost leaders' emphasis on efficiency makes them vulnerable to price competition from rivals.

A firm following a differentiation strategy attempts to convince customers to pay a premium price for its good or services by providing unique and desirable features.

A focused differentiation strategy requires offering unique features that fulfill the demands of a narrow market. All of the following firms are examples except:

Customers, in many cases, may simply prefer a cheaper alternative to a unique product sold at a premium price.

A(n) _____ strategy requires offering unique features that fulfill the demands of a narrow market.

A firm following the focused cost strategy necessarily charges the lowest prices in the industry.

Mastering Strategy: Art and Science

Leading Strategically

Evaluating the External Environment

Managing Company Resources

Supporting the Business-Level Strategy: Competitive and Cooperative Moves

Competing in International Markets

Selecting Corporate-Level Strategies

Executing Strategy Through Organizational Design

Leading an Ethical Organization: Corporate Governance, Corporate Ethics, and Social Responsibility

Filters

Exam 5: Selecting Business-Level Strategies

What are the advantages of a differentiation strategy?

Which of the following are created when the costs of offering goods and services decreases as a firm is able to sell more items?

Economies of scale occur because expenses are distributed across a greater number of items.

Which of the following constitutes a disadvantage of the differentiation strategy?

Most cost leaders spend little on advertising, market research, or research and development in order to be efficient.

Which of the following is an advantage of cost leadership?

In many cases, firms become stuck in the middle because firms are simply outmaneuvered by their rivals.

According to Michael Porter, using a differentiation strategy means a company is competing based on _______ rather than ______and is seeking to attract a broad market.

Car manufacturers such as Lamborghini and Ferrari compete in the small super car category. These cars offer more than just transportation. They are known for their styling and state-of-the-art technology. This is an example of a(n):

A differentiation strategy also creates benefits relative to potential new entrants.

The most popular set of generic strategies is based on the work of which Harvard Business School Professor?

Cost leaders' emphasis on efficiency makes them vulnerable to price competition from rivals.

A firm following a differentiation strategy attempts to convince customers to pay a premium price for its good or services by providing unique and desirable features.

A focused differentiation strategy requires offering unique features that fulfill the demands of a narrow market. All of the following firms are examples except:

Customers, in many cases, may simply prefer a cheaper alternative to a unique product sold at a premium price.

A(n) _____ strategy requires offering unique features that fulfill the demands of a narrow market.

A firm following the focused cost strategy necessarily charges the lowest prices in the industry.

Mastering Strategy: Art and Science

Leading Strategically

Evaluating the External Environment

Managing Company Resources

Supporting the Business-Level Strategy: Competitive and Cooperative Moves

Competing in International Markets

Selecting Corporate-Level Strategies

Executing Strategy Through Organizational Design

Leading an Ethical Organization: Corporate Governance, Corporate Ethics, and Social Responsibility

Filters

According to Michael Porter, using a differentiation strategy means a company is competing based on _ rather than and is seeking to attract a broad market.