Question 1

Which of the following is NOT true of a company that succeeds in differentiating its product offering from those of its rivals?

Accepted Answer

A)  It can avoid having to compete on the basis of simply a low price. 
B)  It commands a premium price for its product. 
C)  It usually increases unit sales. 
D)  It gains buyer loyalty to its brand. 
E)  It attracts mainly price-conscious buyers. 
A)  It can avoid having to compete on the basis of simply a low price. 
B)  It commands a premium price for its product. 
C)  It usually increases unit sales. 
D)  It gains buyer loyalty to its brand. 
E)  It attracts mainly price-conscious buyers.

Question 2

A production-based emphasis toward a low-cost provider strategy usually requires a company to strive for:

Accepted Answer

A)  product superiority. 
B)  continuous cost reductions without sacrificing acceptable quality and essential features. 
C)  small-scale production or custom-made products that match the tastes and requirements of niche members. 
D)  appealing features and better quality at lower costs than rivals. 
E)  whatever differentiating features buyers are willing to pay for. 
A)  product superiority. 
B)  continuous cost reductions without sacrificing acceptable quality and essential features. 
C)  small-scale production or custom-made products that match the tastes and requirements of niche members. 
D)  appealing features and better quality at lower costs than rivals. 
E)  whatever differentiating features buyers are willing to pay for.

Question 3

Broad differentiation strategies are well-suited for market circumstances where:

Accepted Answer

A)  there are many ways to differentiate the product or service that have value to buyers. 
B)  most buyers have the same needs and use the product in the same ways. 
C)  technological changes are slow-paced. 
D)  barriers to entry are high and suppliers have a low degree of bargaining power. 
E)  price competition is especially vigorous. 
A)  there are many ways to differentiate the product or service that have value to buyers. 
B)  most buyers have the same needs and use the product in the same ways. 
C)  technological changes are slow-paced. 
D)  barriers to entry are high and suppliers have a low degree of bargaining power. 
E)  price competition is especially vigorous.

Question 4

The underlying criteria of a best-cost provider strategy usually is found in the ability of a company to:

Accepted Answer

A)  offer better goods at attractive prices. 
B)  create attributes that appeal specifically to niche members. 
C)  lower overall costs more than rivals in serving niche members. 
D)  offer buyers something attractively different from competitors' offerings. 
E)  offer the best product at the industry's lowest possible price. 
A)  offer better goods at attractive prices. 
B)  create attributes that appeal specifically to niche members. 
C)  lower overall costs more than rivals in serving niche members. 
D)  offer buyers something attractively different from competitors' offerings. 
E)  offer the best product at the industry's lowest possible price.

Question 5

A broad differentiation strategy generally produces the best results in situations where:

Accepted Answer

A)  buyer brand loyalty is low. 
B)  few rival firms are following a similar differentiation approach. 
C)  new and improved products are introduced only infrequently. 
D)  most rivals are pursuing a differentiation strategy and are seeking to differentiate their products on most of the same features and attributes. 
E)  perceived value of a product is not of great importance. 
A)  buyer brand loyalty is low. 
B)  few rival firms are following a similar differentiation approach. 
C)  new and improved products are introduced only infrequently. 
D)  most rivals are pursuing a differentiation strategy and are seeking to differentiate their products on most of the same features and attributes. 
E)  perceived value of a product is not of great importance.

Question 6

In which of the following circumstances is a strategy to be the industry's overall low-cost provider NOT particularly well-matched to the market situation?

Accepted Answer

A)  When the offerings of rival firms are essentially identical and readily available from many eager sellers 
B)  When there are few ways to achieve differentiation that have value to buyers 
C)  When price competition among rival sellers is especially vigorous 
D)  When buyers have widely varying needs and special requirements,and the prices of substitute products are relatively high 
E)  When the majority of industry sales are made to a few,large-volume buyers 
A)  When the offerings of rival firms are essentially identical and readily available from many eager sellers 
B)  When there are few ways to achieve differentiation that have value to buyers 
C)  When price competition among rival sellers is especially vigorous 
D)  When buyers have widely varying needs and special requirements,and the prices of substitute products are relatively high 
E)  When the majority of industry sales are made to a few,large-volume buyers

Question 7

Which of the following is NOT one of the four basic routes to achieving a differentiation-based competitive advantage?

Accepted Answer

A)  Delivering value to customers via the company's resources,competencies,and value chain activities that rivals don't have or can't afford to match and are well-matched to the requirements of the strategy 
B)  Incorporating tangible features that raise product performance and increase customer satisfaction with the product 
C)  Incorporating product attributes and user features that lower the buyer's overall costs of using the company's product 
D)  Appealing to buyers who are sophisticated and shop hard for the best,stand-out differentiating attributes 
E)  Incorporating features that enhance buyer satisfaction in intangible or noneconomic ways 
A)  Delivering value to customers via the company's resources,competencies,and value chain activities that rivals don't have or can't afford to match and are well-matched to the requirements of the strategy 
B)  Incorporating tangible features that raise product performance and increase customer satisfaction with the product 
C)  Incorporating product attributes and user features that lower the buyer's overall costs of using the company's product 
D)  Appealing to buyers who are sophisticated and shop hard for the best,stand-out differentiating attributes 
E)  Incorporating features that enhance buyer satisfaction in intangible or noneconomic ways

Question 8

A competitive strategy predicated on low-cost leadership tends to work best when:

Accepted Answer

A)  there are widely varying needs and preferences among the various buyers of the product or service. 
B)  there are many market segments and market niches,such that it is feasible for a low-cost leader to dominate the niche where buyers want a budget-priced product. 
C)  price competition among rivals is especially vigorous and the offerings of rival firms are essentially identical,standardized,commodity-like products. 
D)  buyers prefer that the products/services of competing sellers have widely varying attributes and prices. 
E)  buyers have high switching costs and there is considerable diversity in how buyers use the product. 
A)  there are widely varying needs and preferences among the various buyers of the product or service. 
B)  there are many market segments and market niches,such that it is feasible for a low-cost leader to dominate the niche where buyers want a budget-priced product. 
C)  price competition among rivals is especially vigorous and the offerings of rival firms are essentially identical,standardized,commodity-like products. 
D)  buyers prefer that the products/services of competing sellers have widely varying attributes and prices. 
E)  buyers have high switching costs and there is considerable diversity in how buyers use the product.

Question 9

What are the distinctive features of a best-cost provider strategy? Under what circumstances is a best-cost provider strategy appealing?

Accepted Answer

Best-cost provider strategies stake out

Question 10

A broad differentiation strategy improves profitability when:

Accepted Answer

A)  it is focused on product innovation. 
B)  differentiating enhances product performance and quality. 
C)  the differentiating features appeal to sophisticated and prestigious buyers. 
D)  the higher price the product commands exceeds the added costs of achieving the differentiation. 
E)  the differentiator charges a price that is only fractionally higher than the industry's low-cost provider. 
A)  it is focused on product innovation. 
B)  differentiating enhances product performance and quality. 
C)  the differentiating features appeal to sophisticated and prestigious buyers. 
D)  the higher price the product commands exceeds the added costs of achieving the differentiation. 
E)  the differentiator charges a price that is only fractionally higher than the industry's low-cost provider.

Question 11

What are the distinctive features of a focused low-cost strategy? How does it differ from a low-cost leadership strategy?

Accepted Answer

A focused low-cost aims at securing a co

Question 12

The target market of a best-cost provider is:

Accepted Answer

A)  value-conscious buyers. 
B)  brand-conscious buyers. 
C)  price-sensitive buyers. 
D)  middle-income buyers. 
E)  young adults (in the 18-35 age group). 
A)  value-conscious buyers. 
B)  brand-conscious buyers. 
C)  price-sensitive buyers. 
D)  middle-income buyers. 
E)  young adults (in the 18-35 age group).

Question 13

Explain how the strategic target of a low-cost provider differs from the strategic target of a best-cost provider.

Accepted Answer

The strategic target of a low-cost provi

Question 14

Which of the following is NOT one of the pitfalls of a low-cost provider strategy?

Accepted Answer

A)  Overly aggressive price-cutting 
B)  Setting the industry's price ceiling to capture volume gains and achieve economies of scale 
C)  Relying on an approach to reduce costs that can be easily copied 
D)  Becoming too fixated on cost reduction 
E)  Having the basis for the firm's cost advantage undermined by cost-saving technological breakthroughs that can be readily adopted by rival firms 
A)  Overly aggressive price-cutting 
B)  Setting the industry's price ceiling to capture volume gains and achieve economies of scale 
C)  Relying on an approach to reduce costs that can be easily copied 
D)  Becoming too fixated on cost reduction 
E)  Having the basis for the firm's cost advantage undermined by cost-saving technological breakthroughs that can be readily adopted by rival firms

Question 15

Which of the following would NOT lead to cost savings?

Accepted Answer

A)  A company that sets up its own direct sales force 
B)  A company that eliminates low-value-added work steps 
C)  A company that motivates employees through incentives 
D)  A company that conducts sales operations at its website 
E)  A company that sources the best from suppliers across the world 
A)  A company that sets up its own direct sales force 
B)  A company that eliminates low-value-added work steps 
C)  A company that motivates employees through incentives 
D)  A company that conducts sales operations at its website 
E)  A company that sources the best from suppliers across the world

Question 16

The risks of a focused strategy based on either low-cost or differentiation include the:

Accepted Answer

A)  chance that niche customers will bargain more aggressively for good deals than customers in the overall marketplace. 
B)  potential for the preferences and needs of niche members to shift over time toward product attributes desired by buyers in the mainstream portion of the market. 
C)  potential for the segment to be highly vulnerable to economic cycles. 
D)  potential for segment growth to race beyond the production or service capabilities of incumbent firms. 
E)  potential for the segment to become too specialized for other multi-segmented rivals to enter. 
A)  chance that niche customers will bargain more aggressively for good deals than customers in the overall marketplace. 
B)  potential for the preferences and needs of niche members to shift over time toward product attributes desired by buyers in the mainstream portion of the market. 
C)  potential for the segment to be highly vulnerable to economic cycles. 
D)  potential for segment growth to race beyond the production or service capabilities of incumbent firms. 
E)  potential for the segment to become too specialized for other multi-segmented rivals to enter.

Question 17

What are the distinctive features of a broad differentiation strategy? Under what circumstances is a broad differentiation strategy appealing?

Accepted Answer

Differentiation strategies are attractiv

Question 18

A potato chip manufacturer purchases a potato farm.Which of the following regarding its strategy is true?

Accepted Answer

A)  The manufacturer has effectively used vertical integration to increase its bargaining position and reduce transaction costs. 
B)  The manufacturer has efficiently capitalized on the experience and learning-curve effects within the company. 
C)  The manufacturer has enhanced utilization by allowing depreciation and other fixed costs to be spread over a larger unit volume. 
D)  The manufacturer has sacrificed quality by using a lower-cost input. 
E)  The manufacturer has effectively reduced its operating costs by outsourcing its activities. 
A)  The manufacturer has effectively used vertical integration to increase its bargaining position and reduce transaction costs. 
B)  The manufacturer has efficiently capitalized on the experience and learning-curve effects within the company. 
C)  The manufacturer has enhanced utilization by allowing depreciation and other fixed costs to be spread over a larger unit volume. 
D)  The manufacturer has sacrificed quality by using a lower-cost input. 
E)  The manufacturer has effectively reduced its operating costs by outsourcing its activities.

Question 19

A focused differentiation strategy aims at securing competitive advantage by:

Accepted Answer

A)  providing niche members with a top-of-the-line product at a premium price. 
B)  catering to buyers looking for an upscale product at an attractively low price. 
C)  offering a product carefully designed to appeal to the unique preferences and needs of a narrow,well-defined group of buyers. 
D)  developing product attributes that no other company in the industry has. 
E)  convincing a narrow,well-defined group of buyers that the company has a truly world-class product. 
A)  providing niche members with a top-of-the-line product at a premium price. 
B)  catering to buyers looking for an upscale product at an attractively low price. 
C)  offering a product carefully designed to appeal to the unique preferences and needs of a narrow,well-defined group of buyers. 
D)  developing product attributes that no other company in the industry has. 
E)  convincing a narrow,well-defined group of buyers that the company has a truly world-class product.

Question 20

Each of the five generic strategies positions the company differently,EXCEPT when it concerns:

Accepted Answer

A)  its market and competitive environment. 
B)  establishing a central theme for how the company will endeavor to outcompete rivals. 
C)  having resources and capabilities that rivals have trouble duplicating. 
D)  defining differences in terms of product line and production emphasis. 
E)  defining differences in terms of marketing emphasis and the means of maintaining strategy. 
A)  its market and competitive environment. 
B)  establishing a central theme for how the company will endeavor to outcompete rivals. 
C)  having resources and capabilities that rivals have trouble duplicating. 
D)  defining differences in terms of product line and production emphasis. 
E)  defining differences in terms of marketing emphasis and the means of maintaining strategy.

Which of the following is NOT true of a company that succeeds in differentiating its product offering from those of its rivals?

A production-based emphasis toward a low-cost provider strategy usually requires a company to strive for:

Broad differentiation strategies are well-suited for market circumstances where:

The underlying criteria of a best-cost provider strategy usually is found in the ability of a company to:

A broad differentiation strategy generally produces the best results in situations where:

In which of the following circumstances is a strategy to be the industry's overall low-cost provider NOT particularly well-matched to the market situation?

Which of the following is NOT one of the four basic routes to achieving a differentiation-based competitive advantage?

A competitive strategy predicated on low-cost leadership tends to work best when:

What are the distinctive features of a best-cost provider strategy? Under what circumstances is a best-cost provider strategy appealing?

A broad differentiation strategy improves profitability when:

What are the distinctive features of a focused low-cost strategy? How does it differ from a low-cost leadership strategy?

The target market of a best-cost provider is:

Explain how the strategic target of a low-cost provider differs from the strategic target of a best-cost provider.

Which of the following is NOT one of the pitfalls of a low-cost provider strategy?

Which of the following would NOT lead to cost savings?

The risks of a focused strategy based on either low-cost or differentiation include the:

What are the distinctive features of a broad differentiation strategy? Under what circumstances is a broad differentiation strategy appealing?

A potato chip manufacturer purchases a potato farm.Which of the following regarding its strategy is true?

A focused differentiation strategy aims at securing competitive advantage by:

Each of the five generic strategies positions the company differently,EXCEPT when it concerns:

What Is Strategy and Why Is It Important

Charting a Companys Direction: Its Vision, Mission, Objectives, Andstrategy

Evaluating a Companys External Environment

Evaluating a Companys Resources, Capabilities, and Competitiveness

Strengthening a Companys Competitive Position

Strategies for Competing in International Markets

Corporate Strategy

Ethics, Corporate Social Responsibility, Environmental-Sustainability, and Strategy

Building an Organization Capable of Good Strategy Execution

Managing Internal Operations

Corporate Culture and Leadership

Filters

Exam 5: The Five Generic Competitive Strategies

Which of the following is NOT true of a company that succeeds in differentiating its product offering from those of its rivals?

A production-based emphasis toward a low-cost provider strategy usually requires a company to strive for:

Broad differentiation strategies are well-suited for market circumstances where:

The underlying criteria of a best-cost provider strategy usually is found in the ability of a company to:

A broad differentiation strategy generally produces the best results in situations where:

In which of the following circumstances is a strategy to be the industry's overall low-cost provider NOT particularly well-matched to the market situation?

Which of the following is NOT one of the four basic routes to achieving a differentiation-based competitive advantage?

A competitive strategy predicated on low-cost leadership tends to work best when:

What are the distinctive features of a best-cost provider strategy? Under what circumstances is a best-cost provider strategy appealing?

A broad differentiation strategy improves profitability when:

What are the distinctive features of a focused low-cost strategy? How does it differ from a low-cost leadership strategy?

The target market of a best-cost provider is:

Explain how the strategic target of a low-cost provider differs from the strategic target of a best-cost provider.

Which of the following is NOT one of the pitfalls of a low-cost provider strategy?

Which of the following would NOT lead to cost savings?

The risks of a focused strategy based on either low-cost or differentiation include the:

What are the distinctive features of a broad differentiation strategy? Under what circumstances is a broad differentiation strategy appealing?

A potato chip manufacturer purchases a potato farm.Which of the following regarding its strategy is true?

A focused differentiation strategy aims at securing competitive advantage by:

Each of the five generic strategies positions the company differently,EXCEPT when it concerns:

What Is Strategy and Why Is It Important

Charting a Companys Direction: Its Vision, Mission, Objectives, Andstrategy

Evaluating a Companys External Environment

Evaluating a Companys Resources, Capabilities, and Competitiveness

Strengthening a Companys Competitive Position

Strategies for Competing in International Markets

Corporate Strategy

Ethics, Corporate Social Responsibility, Environmental-Sustainability, and Strategy

Building an Organization Capable of Good Strategy Execution

Managing Internal Operations

Corporate Culture and Leadership

Filters