Exam 4: Business Level Strategy

Counterfeit products are a serious problem for firms following the differentiation strategy.

A low-cost leader may create entry barriers to potential entrants by continually improving its levels of efficiency.

Although they are radically different companies, Houston-based New Look Laser Tattoo Removal and Denver-based Kazoo Toys share a business strategy, which is

Discuss how a cost leadership strategy can allow a firm to earn above-average returns in spite of strong competitive forces. Address each of the five competitive forces.

When a firm chooses a business-level strategy, it must answer the questions "Who? What? and How?" What are these questions and why are they important?

A firm's core strategy is its ____ strategy.

Because of its focus on innovation and quality manufacturing, Total Quality Management is not useful for firms which follow a cost leadership strategy.

A company pursuing the differentiation or focused differentiation strategy would tend to

The term "stuck in the middle"

As shown in the Chapter 4 Opening Case, because of its lower overhead cost structure, Acer is able to price its products below those of its competitors.

Before the firm decides what products to offer and what benefits and features they will have, the firm must decide all the following questions EXCEPT

The typical risks of a differentiation strategy do NOT include which of the following?

Human resources and other support activities are not value-creating activities in the value chain; only the primary activities create value.

The Chapter 4 Strategic Focus, counterfeiting contributed to Hewlett-Packard not only losing revenue, but also risk to the company's brand reputation.

Describe the risks of a differentiation strategy.

Case Scenario : Abrahamson's Jewelers. Through its sole location in an affluent suburb of San Francisco, Abrahamson's Jewelers has established a strong niche market in the upscale jewelry store segment. Abrahamson's was founded in 1871 and is currently owned and operated by John Wickersham, who bought the firm from its namesake founders in 1985. Wickersham joined the firm as a trainee out of high school, completed his gemology training, and several years later took ownership with the financial help of his parents. That debt has long been paid off and business has thrived. When he first acquired the business, Abrahamson's offered a full range of jewelry and gift items from watches to wedding sets to silverware to clocks. This broad range of products was mirrored by a broad price range-$10,000 Rolex watches were sold next to $50 Seiko watches. While some jewelry was custom designed and manufactured, most of the products were "case ready," meaning they were sourced from large jewelry and silver manufacturers from around the world. Over the last 15 years, Wickersham has narrowed the company's product offering considerably to focus only on high-end watches like Rolex and Piaget, custom jewelry, and estate jewelry. Wickersham stresses that this is an appropriate focus for his business since each of the products lends itself to relationship selling, and price rarely comes into the discussion. Despite the narrower offering moreover, Abrahamson's floor space has doubled, and clients are intensely loyal to the good taste, design skills, and personal service level provided by Mr. Wickersham. -(Refer to the above Case Scenario ) While Abrahamson's is doing well, Mr. Wickersham would like to grow his business beyond the present location. He believes that growth may bring greater profitability, as well as employment avenues for his only child, who will soon be finishing high school. What recommendations do you have for Mr. Wickersham regarding his growth choices?

The focused differentiation strategy differs from the differentiation strategy in that

According to the Chapter 4 Strategic focus, Kazoo Toys focuses on the __________market and differentiates by providing _____________________.

Gap used shopping experience to subdivide its customers into different segments. Specifically, Gap learned from market research that its female and male customers want different shopping experiences (e.g., men come and go easily, women want exploration). Which of the following aspects of managing customer relationships was Gap engaged in?

Case Scenario : Abrahamson's Jewelers. Through its sole location in an affluent suburb of San Francisco, Abrahamson's Jewelers has established a strong niche market in the upscale jewelry store segment. Abrahamson's was founded in 1871 and is currently owned and operated by John Wickersham, who bought the firm from its namesake founders in 1985. Wickersham joined the firm as a trainee out of high school, completed his gemology training, and several years later took ownership with the financial help of his parents. That debt has long been paid off and business has thrived. When he first acquired the business, Abrahamson's offered a full range of jewelry and gift items from watches to wedding sets to silverware to clocks. This broad range of products was mirrored by a broad price range-$10,000 Rolex watches were sold next to $50 Seiko watches. While some jewelry was custom designed and manufactured, most of the products were "case ready," meaning they were sourced from large jewelry and silver manufacturers from around the world. Over the last 15 years, Wickersham has narrowed the company's product offering considerably to focus only on high-end watches like Rolex and Piaget, custom jewelry, and estate jewelry. Wickersham stresses that this is an appropriate focus for his business since each of the products lends itself to relationship selling, and price rarely comes into the discussion. Despite the narrower offering moreover, Abrahamson's floor space has doubled, and clients are intensely loyal to the good taste, design skills, and personal service level provided by Mr. Wickersham. -(Refer to the above Case Scenario ) What generic business strategy best describes Abrahamson's? Why?