Exam 7: Business-Level Strategy

Many factors can influence the distribution of value in a value chain

Business unit objectives should be measurable and time-specific

Performance of a corporate parent often influences business unit strategy

In a large company, each business unit typically faces different challenges

Creativity is unimportant in strategy development, analysis is the key

A business unit's vision, values and mission are quantitative and directional

Outsourcing is one factor contributing to the increased importance of the service sector

Heterogeneous marketplace needs and wants complicate operations management

Differentiation and low cost are not necessarily in conflict

Employee career paths may improve as a result of outsourcing decisions

Customers buy on the difference between cost and the economic value of a product

If all costs are variable, economies of scale become critically important

Vertical integration is motivated by the perceived benefits of common ownership

Competitive strategy must be either low cost or differentiation

Technology and deregulation have narrowed the scope of competition

Low costs need not translate into low prices

Setting transfer prices is often a source of political conflict in vertically integrated firms

The PESTLE model should be applied mechanically to all businesses

Market segmentation and targeting are marketing issues unimportant for business unit strategy

Managers should understand the drivers of both cost and value enhancement