Exam 4: Business Level Strategy

The analysis of the activity map of a successful company such as Southwest Airlines emphasizes how

What are the risks of an integrated cost leadership/differentiation strategy?

A flexible manufacturing system is

Describe the additional risks undertaken by firms pursuing a focus strategy.

Essentially, there are only two basic competitive advantages: cost and uniqueness.

Companies successfully implementing an integrated cost leadership/differentiation strategy are better positioned than firms pursuing the other four business strategies to do all of the following EXCEPT

A cost leadership strategy provides goods or services with features that are

Every firm uses all levels of strategy: corporate, acquisition and restructuring, international and cooperative.

Business-level strategy can be thought of as the firm's core strategy.

A risk of the differentiation strategy is that the firm's means of differentiation may eventually not provide value for which customers are willing to pay.

A business-level strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage in specific product markets.

A river barge company can offer cheaper, although slower, per pound transportation of products to companies when compared with transportation by air, truck, or rail. The river barge company should first target customers whose companies use

A flexible manufacturing system is a computer-controlled process used to produce a variety of products in moderate, flexible quantities with minimal manual intervention.

According to the Chapter 4 Strategic Focus, Kazoo Toys focuses on the market of children from birth to age 12 and differentiates by providing unique toys and services.

New Balance Athletic Shoes target Baby Boomers' needs for well-fitting shoes. The company is unique in that it offers a very broad range of shoe widths. A realistic potential risk New Balance runs in this focused differentiation strategy includes the possibility that:

The ________dimension of relationships with customers is particularly important for social networking sites such as Facebook and MySpace.

McDonald's brand recognition is a fundamental source of differentiation, while the rigorous standardization of processes allows it to lower costs. Thus, McDonalds is a classic example of the focused differentiation strategy.

When selecting a business level strategy, the firm must determine all of the following EXCEPT

The difference between the cost leadership and differentiation business-level strategies, and the focused cost leadership and focused differentiation strategies, is their competitive reach.

Case Scenario : Walt Disney Company. Walt Disney Company is famed for its creativity, strong global brand, and uncanny ability to take service and experience businesses to higher levels. In the early 1990s, then-CEO Michael Eisner looked to the fast-food industry as a way to draw additional attention to the Disney presence outside of its theme parks - its retail chain was highly successful and growing rapidly. A fast-food restaurant made sense from Eisner's perspective since Disney's theme parks had already mastered rapid, high-volume food preparation, and, despite somewhat undistinguished food and high prices (or perhaps because of), all its in-park restaurants were extremely profitable. From this inspiration, Mickey's Kitchen was launched. The first two locations were opened in California and in a suburb of Chicago, adjacent to existing Disney stores. Menu items included healthy, child-oriented fare like Jumbo Dumbo burgers and even a meatless Mickey Burger. Eisner thought that locating each restaurant next to existing Disney stores was sure to increase foot traffic through both venues. Less than two years later Disney closed down the California and Chicago stores and shuttered further expansion plans. Eisner cited overwhelming competition from McDonalds and general oversaturation in the fast-food industry as the primary reasons for closing down the failing Mickey's Kitchen. -(Refer to the above Case Scenario ) What resources and value-chain activities did Disney try to leverage through the opening of Mickey's Kitchen?