Question 1

An efficiency frontier shows all of the different positions that a company can adopt with regard to differentiation and cost.

Accepted Answer

A) True 
 B)False

Question 2

A market segment consists of a group of:

Accepted Answer

A)  similar products. 
B)  customers who have similar needs. 
C)  products that are considered obsolete. 
D)  diverse products produced by the same manufacturer. 
E)  customers who have diverse needs. 
A)  similar products. 
B)  customers who have similar needs. 
C)  products that are considered obsolete. 
D)  diverse products produced by the same manufacturer. 
E)  customers who have diverse needs.

Question 3

When a company offers a wide variety of products at lower prices than its rivals, it is most likely:

Accepted Answer

A)  pursuing a low-cost strategy. 
B)  pursuing a differentiation strategy. 
C)  pursuing a focus strategy. 
D)  pursuing an exit strategy. 
E)  pursuing a divestment strategy. 
A)  pursuing a low-cost strategy. 
B)  pursuing a differentiation strategy. 
C)  pursuing a focus strategy. 
D)  pursuing an exit strategy. 
E)  pursuing a divestment strategy.

Question 4

All focus strategies entail serving a specific market segment using a differentiation approach.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)  cost leadership 
B)  differentiation 
C)  customer retention 
D)  market concentration 
E)  share building 
A)  cost leadership 
B)  differentiation 
C)  customer retention 
D)  market concentration 
E)  share building

Question 6

Which of the following statements is true of differentiation and cost structure?

Accepted Answer

A)  Differentiation and cost structure decisions affect one another. 
B)  Differentiation and cost structure decisions do not affect one another. 
C)  Companies that focus on the higher-value end of the market have a lower cost structure. 
D)  Differentiation decisions do not affect a company's profitability. 
E)  Cost structure decisions do not affect a company's profitability. 
A)  Differentiation and cost structure decisions affect one another. 
B)  Differentiation and cost structure decisions do not affect one another. 
C)  Companies that focus on the higher-value end of the market have a lower cost structure. 
D)  Differentiation decisions do not affect a company's profitability. 
E)  Cost structure decisions do not affect a company's profitability.

Question 7

A company has a competitive advantage if it can increase costs relative to rivals.

Accepted Answer

A) True 
 B)False

Question 8

The generic business-level strategies are cost leadership, differentiation, and mass marketing.

Accepted Answer

A) True 
 B)False

Question 9

A segmentation strategy requires that a company:

Accepted Answer

A)  standardize its products. 
B)  offer its products at low costs. 
C)  customize its products. 
D)  produce one basic offering. 
E)  attain high economies of scale by achieving a high volume of sales. 
A)  standardize its products. 
B)  offer its products at low costs. 
C)  customize its products. 
D)  produce one basic offering. 
E)  attain high economies of scale by achieving a high volume of sales.

Question 10

When a company decides to serve a limited number of segments, or just one segment, it is pursuing a segmentation strategy.

Accepted Answer

A) True 
 B)False

Question 11

Companies with a differentiation advantage tend to charge a lower price for their products.

Accepted Answer

A) True 
 B)False

Question 12

A company pursuing a focus strategy:

Accepted Answer

A)  attempts to serve all market segments. 
B)  concentrates on building market share in one market segment. 
C)  typically has more resources at its disposal than a differentiator does. 
D)  has a greater impact on costs and revenues. 
E)  produce different offerings for different segments. 
A)  attempts to serve all market segments. 
B)  concentrates on building market share in one market segment. 
C)  typically has more resources at its disposal than a differentiator does. 
D)  has a greater impact on costs and revenues. 
E)  produce different offerings for different segments.

Question 13

When a company is able to pioneer process innovations that lead to value innovation, it effectively changes the game in an industry and may be able to outperform its rivals for a long period of time.

Accepted Answer

A) True 
 B)False

Question 14

Lucy's Swimwear Boutique offers swimwear that is targeted at affluent people who can afford to buy expensive, handmade swimsuits. Which of the following approaches to market segmentation is Lucy's Swimwear Boutique using?

Accepted Answer

A)  Broad differentiation strategy 
B)  Low market segmentation 
C)  Medium market segmentation strategy 
D)  Broad high-cost strategy 
E)  Focus differentiation strategy 
A)  Broad differentiation strategy 
B)  Low market segmentation 
C)  Medium market segmentation strategy 
D)  Broad high-cost strategy 
E)  Focus differentiation strategy

Question 15

At The Luxury Hotel in Miami, Florida, three hotel employees serve the needs of each guest. In every room, a guest can summon a chef, a maid, or a valet by pressing a button at his/her bedside. Which generic business-level strategy is The Luxury Hotel utilizing?

Accepted Answer

A)  Cost leadership 
B)  Differentiation 
C)  Vertical integration 
D)  Razor and blade 
E)  Brand loyalty 
A)  Cost leadership 
B)  Differentiation 
C)  Vertical integration 
D)  Razor and blade 
E)  Brand loyalty

Question 16

When a company already has a low-cost structure, it has to give up a lot of differentiation in its product offering to get additional cost reductions.

Accepted Answer

A) True 
 B)False

Question 17

Market segmentation refers to the process of subdividing a market into clearly identifiable groups of customers with similar needs, desires, and demand characteristics.

Accepted Answer

A) True 
 B)False

Question 18

Nick, a professional magician, is often invited to perform magic tricks at birthday parties and other social gatherings from across the country. However, he offers his services only to clients who stay in the same city as him. He is also known to charge less than other magicians in the city. Nick is pursuing which generic business strategy?

Accepted Answer

A)  Improved services 
B)  Right-time marketing 
C)  Focused low-cost 
D)  Broad low-cost 
E)  Deterrence strategy 
A)  Improved services 
B)  Right-time marketing 
C)  Focused low-cost 
D)  Broad low-cost 
E)  Deterrence strategy

Question 19

In commodity markets, competitive advantage goes to the company that has the lowest costs.

Accepted Answer

A) True 
 B)False

Question 20

Delta Airlines used to advertise its high-quality air travel service by saying it flew "anywhere, anytime." What generic strategy is represented by this advertisement?

Accepted Answer

A)  Broad low-cost 
B)  Broad differentiation 
C)  Vertical integration 
D)  Right-time marketing 
E)  Rapid growth 
A)  Broad low-cost 
B)  Broad differentiation 
C)  Vertical integration 
D)  Right-time marketing 
E)  Rapid growth

An efficiency frontier shows all of the different positions that a company can adopt with regard to differentiation and cost.

A market segment consists of a group of:

When a company offers a wide variety of products at lower prices than its rivals, it is most likely:

All focus strategies entail serving a specific market segment using a differentiation approach.

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

Which of the following statements is true of differentiation and cost structure?

A company has a competitive advantage if it can increase costs relative to rivals.

The generic business-level strategies are cost leadership, differentiation, and mass marketing.

A segmentation strategy requires that a company:

When a company decides to serve a limited number of segments, or just one segment, it is pursuing a segmentation strategy.

Companies with a differentiation advantage tend to charge a lower price for their products.

A company pursuing a focus strategy:

When a company is able to pioneer process innovations that lead to value innovation, it effectively changes the game in an industry and may be able to outperform its rivals for a long period of time.

Lucy's Swimwear Boutique offers swimwear that is targeted at affluent people who can afford to buy expensive, handmade swimsuits. Which of the following approaches to market segmentation is Lucy's Swimwear Boutique using?

At The Luxury Hotel in Miami, Florida, three hotel employees serve the needs of each guest. In every room, a guest can summon a chef, a maid, or a valet by pressing a button at his/her bedside. Which generic business-level strategy is The Luxury Hotel utilizing?

When a company already has a low-cost structure, it has to give up a lot of differentiation in its product offering to get additional cost reductions.

Market segmentation refers to the process of subdividing a market into clearly identifiable groups of customers with similar needs, desires, and demand characteristics.

In commodity markets, competitive advantage goes to the company that has the lowest costs.

Delta Airlines used to advertise its high-quality air travel service by saying it flew "anywhere, anytime." What generic strategy is represented by this advertisement?

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

An efficiency frontier shows all of the different positions that a company can adopt with regard to differentiation and cost.

A market segment consists of a group of:

When a company offers a wide variety of products at lower prices than its rivals, it is most likely:

All focus strategies entail serving a specific market segment using a differentiation approach.

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

Which of the following statements is true of differentiation and cost structure?

A company has a competitive advantage if it can increase costs relative to rivals.

The generic business-level strategies are cost leadership, differentiation, and mass marketing.

A segmentation strategy requires that a company:

When a company decides to serve a limited number of segments, or just one segment, it is pursuing a segmentation strategy.

Companies with a differentiation advantage tend to charge a lower price for their products.

A company pursuing a focus strategy:

When a company is able to pioneer process innovations that lead to value innovation, it effectively changes the game in an industry and may be able to outperform its rivals for a long period of time.

Lucy's Swimwear Boutique offers swimwear that is targeted at affluent people who can afford to buy expensive, handmade swimsuits. Which of the following approaches to market segmentation is Lucy's Swimwear Boutique using?

At The Luxury Hotel in Miami, Florida, three hotel employees serve the needs of each guest. In every room, a guest can summon a chef, a maid, or a valet by pressing a button at his/her bedside. Which generic business-level strategy is The Luxury Hotel utilizing?

When a company already has a low-cost structure, it has to give up a lot of differentiation in its product offering to get additional cost reductions.

Market segmentation refers to the process of subdividing a market into clearly identifiable groups of customers with similar needs, desires, and demand characteristics.

In commodity markets, competitive advantage goes to the company that has the lowest costs.

Delta Airlines used to advertise its high-quality air travel service by saying it flew "anywhere, anytime." What generic strategy is represented by this advertisement?

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