Question 1

A disadvantage of pursuing a cost leadership strategy is that

Accepted Answer

A)  technological change can make experience curve economies obsolete. 
B)  price wars make it hard to compete with differentiators. 
C)  it costs more than a differentiation strategy because of the necessity of high capital investments. 
D)  powerful buyers are a major threat. 
E)  no quality control exists. 
A)  technological change can make experience curve economies obsolete. 
B)  price wars make it hard to compete with differentiators. 
C)  it costs more than a differentiation strategy because of the necessity of high capital investments. 
D)  powerful buyers are a major threat. 
E)  no quality control exists. A

Question 2

Which of the following is not a generic competitive strategy?

Accepted Answer

A)  Cost leadership 
B)  Differentiation 
C)  Focused cost leadership 
D)  Focused differentiation 
E)  Innovation 
A)  Cost leadership 
B)  Differentiation 
C)  Focused cost leadership 
D)  Focused differentiation 
E)  Innovation E

Question 3

A leadership strategy aims at growing in a declining industry by picking up the market share of companies that are leaving the industry.

Accepted Answer

A) True 
 B)False  True

Question 4

As compared to a differentiator, the cost leader has the advantage over its rivals of

Accepted Answer

A)  making higher profit margins. 
B)  being better able to withstand the negative influence of powerful suppliers and buyers. 
C)  having inimitable production methods. 
D)  enjoying higher brand loyalty. 
E)  being preferred by investors. 
A)  making higher profit margins. 
B)  being better able to withstand the negative influence of powerful suppliers and buyers. 
C)  having inimitable production methods. 
D)  enjoying higher brand loyalty. 
E)  being preferred by investors.

Question 5

The three principal routes to high product differentiation are superior innovation, excellent quality, and responsiveness to customer needs.

Accepted Answer

A) True 
 B)False

Question 6

One strategy used to consolidate fragmented industries is

Accepted Answer

A)  vertical mergers. 
B)  horizontal merger 
C)  product proliferation. 
D)  chaining 
E)  non-price competition. 
A)  vertical mergers. 
B)  horizontal merger 
C)  product proliferation. 
D)  chaining 
E)  non-price competition.

Question 7

A focused company is a specialized differentiator or a cost leader.

Accepted Answer

A) True 
 B)False

Question 8

To compete in the fragmented restaurant industry, Red Lobster Corporation built and operated hundreds of restaurants across the United States and Canada. Red Lobster is using which type of strategy?

Accepted Answer

A)  Acquisitions 
B)  Chaining 
C)  Franchising 
D)  Diversification 
E)  Horizontal mergers 
A)  Acquisitions 
B)  Chaining 
C)  Franchising 
D)  Diversification 
E)  Horizontal mergers

Question 9

A business-level strategy is the plan of action that strategic managers adopt to use a company's resources and distinctive competencies to gain a competitive advantage over its rival in a market or industry.

Accepted Answer

A) True 
 B)False

Question 10

When a company produces a wide range of products for different customer groups, it is following a strategy of

Accepted Answer

A)  cost leadership. 
B)  market concentration. 
C)  focus. 
D)  differentiation. 
E)  share building. 
A)  cost leadership. 
B)  market concentration. 
C)  focus. 
D)  differentiation. 
E)  share building.

Question 11

The cost leader is able to withstand competition better than the other companies because of its lower costs.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following strategies for fragmented industries grants the right to use the parent's name, reputation, and business model in a particular location or area in return for a fee and often a percentage of the profits?

Accepted Answer

A)  Chaining 
B)  Franchising 
C)  Vertical merger 
D)  Horizontal merger 
E)  B2B 
A)  Chaining 
B)  Franchising 
C)  Vertical merger 
D)  Horizontal merger 
E)  B2B

Question 13

A fragmented industry is composed of a large number of small and medium-sized companies.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is an example of a company following a strategy of consolidating a fragmented industry through horizontal merger?

Accepted Answer

A)  Mail Boxes Etc. grew through the investments of local owner-managers. 
B)  America Online grew by acquiring rivals such as Netscape, CompuServe, and ICQ. 
C)  Sears funded growth with cash from operations in its existing stores. 
D)  Software House International is licensed to sell over 100,000 products in a dozen countries. 
E)  Heinz started with just one product, pickled horseradish, and today manufactures almost 6,000 foods. 
A)  Mail Boxes Etc. grew through the investments of local owner-managers. 
B)  America Online grew by acquiring rivals such as Netscape, CompuServe, and ICQ. 
C)  Sears funded growth with cash from operations in its existing stores. 
D)  Software House International is licensed to sell over 100,000 products in a dozen countries. 
E)  Heinz started with just one product, pickled horseradish, and today manufactures almost 6,000 foods.

Question 15

Fragmented industries typically have few barriers to entry.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not a strategy used in declining industries?

Accepted Answer

A)  Leadership 
B)  Niche 
C)  Divestment 
D)  Harvest 
E)  Diversification 
A)  Leadership 
B)  Niche 
C)  Divestment 
D)  Harvest 
E)  Diversification

Question 17

The fate of a company whose strategy fails because it has made product/market choices in a way that does not lead to a sustained competitive advantage is stuck in the middle.

Accepted Answer

A) True 
 B)False

Question 18

Which generic business-level strategy is based on the intent to outperform competitors by doing everything it can to lower its cost structure?

Accepted Answer

A)  Focused differentiation 
B)  Differentiation 
C)  Broad differentiation 
D)  Cost leadership 
E)  None of these 
A)  Focused differentiation 
B)  Differentiation 
C)  Broad differentiation 
D)  Cost leadership 
E)  None of these

Question 19

A factor promoting the trend toward market fragmentation and niche marking is the substantial reeducation of the costs of differentiation as a result of flexible manufacturing.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not a route that can help a company achieve a differentiation advantage?

Accepted Answer

A)  Superior innovation 
B)  Low cost structure 
C)  Responsiveness to customer needs 
D)  Excellent quality 
E)  Superior innovation and excellent quality 
A)  Superior innovation 
B)  Low cost structure 
C)  Responsiveness to customer needs 
D)  Excellent quality 
E)  Superior innovation and excellent quality

A disadvantage of pursuing a cost leadership strategy is that

Which of the following is not a generic competitive strategy?

A leadership strategy aims at growing in a declining industry by picking up the market share of companies that are leaving the industry.

As compared to a differentiator, the cost leader has the advantage over its rivals of

The three principal routes to high product differentiation are superior innovation, excellent quality, and responsiveness to customer needs.

One strategy used to consolidate fragmented industries is

A focused company is a specialized differentiator or a cost leader.

To compete in the fragmented restaurant industry, Red Lobster Corporation built and operated hundreds of restaurants across the United States and Canada. Red Lobster is using which type of strategy?

A business-level strategy is the plan of action that strategic managers adopt to use a company's resources and distinctive competencies to gain a competitive advantage over its rival in a market or industry.

When a company produces a wide range of products for different customer groups, it is following a strategy of

The cost leader is able to withstand competition better than the other companies because of its lower costs.

Which of the following strategies for fragmented industries grants the right to use the parent's name, reputation, and business model in a particular location or area in return for a fee and often a percentage of the profits?

A fragmented industry is composed of a large number of small and medium-sized companies.

Which of the following is an example of a company following a strategy of consolidating a fragmented industry through horizontal merger?

Fragmented industries typically have few barriers to entry.

Which of the following is not a strategy used in declining industries?

The fate of a company whose strategy fails because it has made product/market choices in a way that does not lead to a sustained competitive advantage is stuck in the middle.

Which generic business-level strategy is based on the intent to outperform competitors by doing everything it can to lower its cost structure?

A factor promoting the trend toward market fragmentation and niche marking is the substantial reeducation of the costs of differentiation as a result of flexible manufacturing.

Which of the following is not a route that can help a company achieve a differentiation advantage?

The Strategy-Making Process

The Mission, Governance, and Business Ethics

External Analysis: the Identification of Opportunities and Threats

Building Competitive Advantage

Strategy in the Global Environment

Corporate-Level Strategy and Long-Run Profitability

Strategic Change: Implementing Strategies to Build and Develop a Company

Implementing Strategy Through Organizational Design

Filters

Exam 5: Business-Level Strategy and Competitive Positioning

A disadvantage of pursuing a cost leadership strategy is that

Which of the following is not a generic competitive strategy?

A leadership strategy aims at growing in a declining industry by picking up the market share of companies that are leaving the industry.

As compared to a differentiator, the cost leader has the advantage over its rivals of

The three principal routes to high product differentiation are superior innovation, excellent quality, and responsiveness to customer needs.

One strategy used to consolidate fragmented industries is

A focused company is a specialized differentiator or a cost leader.

To compete in the fragmented restaurant industry, Red Lobster Corporation built and operated hundreds of restaurants across the United States and Canada. Red Lobster is using which type of strategy?

A business-level strategy is the plan of action that strategic managers adopt to use a company's resources and distinctive competencies to gain a competitive advantage over its rival in a market or industry.

When a company produces a wide range of products for different customer groups, it is following a strategy of

The cost leader is able to withstand competition better than the other companies because of its lower costs.

Which of the following strategies for fragmented industries grants the right to use the parent's name, reputation, and business model in a particular location or area in return for a fee and often a percentage of the profits?

A fragmented industry is composed of a large number of small and medium-sized companies.

Which of the following is an example of a company following a strategy of consolidating a fragmented industry through horizontal merger?

Fragmented industries typically have few barriers to entry.

Which of the following is not a strategy used in declining industries?

The fate of a company whose strategy fails because it has made product/market choices in a way that does not lead to a sustained competitive advantage is stuck in the middle.

Which generic business-level strategy is based on the intent to outperform competitors by doing everything it can to lower its cost structure?

A factor promoting the trend toward market fragmentation and niche marking is the substantial reeducation of the costs of differentiation as a result of flexible manufacturing.

Which of the following is not a route that can help a company achieve a differentiation advantage?

The Strategy-Making Process

The Mission, Governance, and Business Ethics

External Analysis: the Identification of Opportunities and Threats

Building Competitive Advantage

Strategy in the Global Environment

Corporate-Level Strategy and Long-Run Profitability

Strategic Change: Implementing Strategies to Build and Develop a Company

Implementing Strategy Through Organizational Design

Filters