Question 1

Compared to a differentiator, the company that follows a low-cost strategy:

Accepted Answer

A)  distinguishes its products from those of rivals by offering something that they find hard to match. 
B)  absorbs cost increases by powerful suppliers while keeping to their lower pricing. 
C)  allows the company to charge a premium price for its good or service. 
D)  uses perceived superior value to generate growth in demand among customers. 
E)  creates entry barriers for rivals with greater brand loyalty to the specific products offered. 
A)  distinguishes its products from those of rivals by offering something that they find hard to match. 
B)  absorbs cost increases by powerful suppliers while keeping to their lower pricing. 
C)  allows the company to charge a premium price for its good or service. 
D)  uses perceived superior value to generate growth in demand among customers. 
E)  creates entry barriers for rivals with greater brand loyalty to the specific products offered. B

Question 2

Actions taken at the functional level should support the business-level strategy, as should the organizational arrangements of the enterprise.

Accepted Answer

A) True 
 B)False  True

Question 3

Jordan's Ice Creams is strategically located near a university. After realizing that most of its customers, who are mostly students, prefer a wide range of flavors, it started offering different combinations of premium flavors, cones, and toppings to create hundreds of extravagant, customized products. Which generic strategy is Jordan pursuing?

Accepted Answer

A)  Broad low-cost strategy 
B)  Broad differentiation strategy 
C)  Focused low-cost strategy 
D)  Focused differentiation strategy 
E)  Product substitution strategy 
A)  Broad low-cost strategy 
B)  Broad differentiation strategy 
C)  Focused low-cost strategy 
D)  Focused differentiation strategy 
E)  Product substitution strategy D

Question 4

Which of the following is NOT a principal danger of a low-cost position approach?

Accepted Answer

A)  Powerful buyers 
B)  Technological change 
C)  Imitation of production techniques 
D)  Changes in consumer tastes 
E)  Rivals lowering their costs 
A)  Powerful buyers 
B)  Technological change 
C)  Imitation of production techniques 
D)  Changes in consumer tastes 
E)  Rivals lowering their costs

Question 5

The advantage that focused companies have over their broad market rivals is that they:

Accepted Answer

A)  can sells on non-price factors, such as design or customer service. 
B)  can respond to demands for deep price discounts. 
C)  sell fewer products in bulk to outsell their rivals. 
D)  can initiate a price war in order to grow volume and drive its weaker rivals out of the industry. 
E)  can absorb cost increases that may be passed on downstream by powerful suppliers. 
A)  can sells on non-price factors, such as design or customer service. 
B)  can respond to demands for deep price discounts. 
C)  sell fewer products in bulk to outsell their rivals. 
D)  can initiate a price war in order to grow volume and drive its weaker rivals out of the industry. 
E)  can absorb cost increases that may be passed on downstream by powerful suppliers.

Question 6

Standardization describes what happens when innovation pushes out the efficiency frontier in an industry, allowing for greater value to be offered through superior differentiation at a lower cost than was previously thought possible.

Accepted Answer

A) True 
 B)False

Question 7

Differentiation can help a company to grow overall demand and capture market share from its rivals.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is NOT a generic business-level strategy?

Accepted Answer

A)  Broad differentiation strategy 
B)  Broad low-cost strategy 
C)  Focused low-cost strategy 
D)  Focused differentiation strategy 
E)  Focused innovation strategy 
A)  Broad differentiation strategy 
B)  Broad low-cost strategy 
C)  Focused low-cost strategy 
D)  Focused differentiation strategy 
E)  Focused innovation strategy

Question 9

Companies that focus on the higher-income or higher-value end of the market will tend to have a higher cost structure.

Accepted Answer

A) True 
 B)False

Question 10

Lilly's Beauty Company sells haircare products such as shampoo, conditioner, and hairspray. The company does not sell new or customized products in order to meet the specific needs of certain groups of people. Which of the following approaches is illustrated in this scenario?

Accepted Answer

A)  Standardization strategy 
B)  Focus strategy 
C)  Medium market segmentation 
D)  High market segmentation 
E)  Focused market segmentation 
A)  Standardization strategy 
B)  Focus strategy 
C)  Medium market segmentation 
D)  High market segmentation 
E)  Focused market segmentation

Question 11

By focusing on a niche, and customizing the offering to that segment, a differentiated company can often outsell differentiated rivals that target a broader market.

Accepted Answer

A) True 
 B)False

Question 12

The way a product is differentiated from other products of its type and the price of the product determine which product a customer chooses to satisfy his or her needs.

Accepted Answer

A) True 
 B)False

Question 13

Yankee Candle Company offers customers candles that burn for 50-60 hours, much longer than most department store candle brands. Therefore, customers are willing to pay a higher price for these candles. Which of the following strategies is Yankee Candle Company following?

Accepted Answer

A)  Cost leadership 
B)  Rapid growth 
C)  Market segmentation 
D)  Differentiation 
E)  Stuck in the middle 
A)  Cost leadership 
B)  Rapid growth 
C)  Market segmentation 
D)  Differentiation 
E)  Stuck in the middle

Question 14

A differentiation strategy is based on creating a product that customers perceive as being:

Accepted Answer

A)  the same as other available products. 
B)  distinct from other available products. 
C)  the least costly product in the industry. 
D)  the most costly product in the industry. 
E)  cheaper, but inferior to the available products. 
A)  the same as other available products. 
B)  distinct from other available products. 
C)  the least costly product in the industry. 
D)  the most costly product in the industry. 
E)  cheaper, but inferior to the available products.

Question 15

Info Tech, Inc. makes complex telecommunications products, such as cellular telephones. Since this company has a distinctive competency in research and development, it should try to differentiate its product through:

Accepted Answer

A)  reliability. 
B)  innovation. 
C)  advertising. 
D)  service. 
E)  low pricing. 
A)  reliability. 
B)  innovation. 
C)  advertising. 
D)  service. 
E)  low pricing.

Question 16

Which of the following is NOT a main approach to market segmentation?

Accepted Answer

A)  Marketing a product targeted toward average or typical customers 
B)  Marketing a product to a group of people who are more likely to purchase it 
C)  Making customized products to suit the unique requirements of customers 
D)  Making products to meet the specific needs of a narrow group of customers 
E)  Making one product aimed toward a general, rather than a specific subset of customers 
A)  Marketing a product targeted toward average or typical customers 
B)  Marketing a product to a group of people who are more likely to purchase it 
C)  Making customized products to suit the unique requirements of customers 
D)  Making products to meet the specific needs of a narrow group of customers 
E)  Making one product aimed toward a general, rather than a specific subset of customers

Question 17

A low-cost company is often best positioned to survive price rivalry in its industry.

Accepted Answer

A) True 
 B)False

Question 18

Mike's Eatery, a fast food chain, neither customizes its product offerings nor sells new products based on  market segments. Mike's Eatery is pursuing standardization strategy.

Accepted Answer

A) True 
 B)False

Question 19

Define the generic business-level strategies companies pursue.

Accepted Answer

There are four generic business-level st

Question 20

A company that follows a low-cost strategy could reasonably be expected to reduce costs by:

Accepted Answer

A)  increasing the number of business processes. 
B)  adopting lean production and flexible manufacturing technologies. 
C)  implementing first-in-first-out inventory control systems. 
D)  taking steps to increase customer churn. 
E)  abandoning economies of scale and learning effects. 
A)  increasing the number of business processes. 
B)  adopting lean production and flexible manufacturing technologies. 
C)  implementing first-in-first-out inventory control systems. 
D)  taking steps to increase customer churn. 
E)  abandoning economies of scale and learning effects.

Compared to a differentiator, the company that follows a low-cost strategy:

Actions taken at the functional level should support the business-level strategy, as should the organizational arrangements of the enterprise.

Which of the following is NOT a principal danger of a low-cost position approach?

The advantage that focused companies have over their broad market rivals is that they:

Standardization describes what happens when innovation pushes out the efficiency frontier in an industry, allowing for greater value to be offered through superior differentiation at a lower cost than was previously thought possible.

Differentiation can help a company to grow overall demand and capture market share from its rivals.

Which of the following is NOT a generic business-level strategy?

Companies that focus on the higher-income or higher-value end of the market will tend to have a higher cost structure.

Lilly's Beauty Company sells haircare products such as shampoo, conditioner, and hairspray. The company does not sell new or customized products in order to meet the specific needs of certain groups of people. Which of the following approaches is illustrated in this scenario?

By focusing on a niche, and customizing the offering to that segment, a differentiated company can often outsell differentiated rivals that target a broader market.

The way a product is differentiated from other products of its type and the price of the product determine which product a customer chooses to satisfy his or her needs.

Yankee Candle Company offers customers candles that burn for 50-60 hours, much longer than most department store candle brands. Therefore, customers are willing to pay a higher price for these candles. Which of the following strategies is Yankee Candle Company following?

A differentiation strategy is based on creating a product that customers perceive as being:

Info Tech, Inc. makes complex telecommunications products, such as cellular telephones. Since this company has a distinctive competency in research and development, it should try to differentiate its product through:

Which of the following is NOT a main approach to market segmentation?

A low-cost company is often best positioned to survive price rivalry in its industry.

Mike's Eatery, a fast food chain, neither customizes its product offerings nor sells new products based on market segments. Mike's Eatery is pursuing standardization strategy.

Define the generic business-level strategies companies pursue.

A company that follows a low-cost strategy could reasonably be expected to reduce costs by:

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Resources and Competitive Advantage

Building Competitive Advantage Through Functional-Level Strategies

Business-Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate-Level Strategy: Related and Unrelated Diversification

Corporate Performance, Governance, and Business Ethics

Implementing Strategy Through Organization

Filters

Exam 5: Business-Level Strategy

Compared to a differentiator, the company that follows a low-cost strategy:

Actions taken at the functional level should support the business-level strategy, as should the organizational arrangements of the enterprise.

Which of the following is NOT a principal danger of a low-cost position approach?

The advantage that focused companies have over their broad market rivals is that they:

Standardization describes what happens when innovation pushes out the efficiency frontier in an industry, allowing for greater value to be offered through superior differentiation at a lower cost than was previously thought possible.

Differentiation can help a company to grow overall demand and capture market share from its rivals.

Which of the following is NOT a generic business-level strategy?

Companies that focus on the higher-income or higher-value end of the market will tend to have a higher cost structure.

Lilly's Beauty Company sells haircare products such as shampoo, conditioner, and hairspray. The company does not sell new or customized products in order to meet the specific needs of certain groups of people. Which of the following approaches is illustrated in this scenario?

By focusing on a niche, and customizing the offering to that segment, a differentiated company can often outsell differentiated rivals that target a broader market.

The way a product is differentiated from other products of its type and the price of the product determine which product a customer chooses to satisfy his or her needs.

Yankee Candle Company offers customers candles that burn for 50-60 hours, much longer than most department store candle brands. Therefore, customers are willing to pay a higher price for these candles. Which of the following strategies is Yankee Candle Company following?

A differentiation strategy is based on creating a product that customers perceive as being:

Info Tech, Inc. makes complex telecommunications products, such as cellular telephones. Since this company has a distinctive competency in research and development, it should try to differentiate its product through:

Which of the following is NOT a main approach to market segmentation?

A low-cost company is often best positioned to survive price rivalry in its industry.

Mike's Eatery, a fast food chain, neither customizes its product offerings nor sells new products based on market segments. Mike's Eatery is pursuing standardization strategy.

Define the generic business-level strategies companies pursue.

A company that follows a low-cost strategy could reasonably be expected to reduce costs by:

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Resources and Competitive Advantage

Building Competitive Advantage Through Functional-Level Strategies

Business-Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate-Level Strategy: Related and Unrelated Diversification

Corporate Performance, Governance, and Business Ethics

Implementing Strategy Through Organization

Filters