Question 1

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. D

Question 2

The objective of a competitive strategy is to

Accepted Answer

A)  establish a competitively powerful value chain. 
B)  grow revenues at a faster annual rate than rivals are able to grow their revenues. 
C)  lend greater detail to the company's business model. 
D)  provide buyers superior value relative to the offerings of rival sellers in order to attain a competitive advantage. 
E)  get the company into the best strategic group and then dominate it. 
A)  establish a competitively powerful value chain. 
B)  grow revenues at a faster annual rate than rivals are able to grow their revenues. 
C)  lend greater detail to the company's business model. 
D)  provide buyers superior value relative to the offerings of rival sellers in order to attain a competitive advantage. 
E)  get the company into the best strategic group and then dominate it. D

Question 3

A healthy fast-casual restaurant that offers only vegetarian and vegan meals insists on portraying organic ingredients in its advertisements, charges a higher price for its meals, and has a rigorous quality control process to insure the cleanliness of its facilities. What strategy is the manufacturer using to deliver superior value to customers?

Accepted Answer

A)  incorporating tangible features 
B)  incorporating intangible features 
C)  signaling value by targeting sophisticated buyers 
D)  lowering the buyer's overall cost 
E)  leveraging its power over suppliers 
A)  incorporating tangible features 
B)  incorporating intangible features 
C)  signaling value by targeting sophisticated buyers 
D)  lowering the buyer's overall cost 
E)  leveraging its power over suppliers C

Question 4

Domino's Pizza has a well-known slogan: "We'll deliver in 30 minutes or less, or it's free!" With it what has the pizza maker achieved?

Accepted Answer

A)  built a unique customer value proposition 
B)  created a new delivery system 
C)  given a sense of exclusivity to its customers 
D)  coordinated with suppliers to better address customer needs 
E)  emphasized human resource management activities 
A)  built a unique customer value proposition 
B)  created a new delivery system 
C)  given a sense of exclusivity to its customers 
D)  coordinated with suppliers to better address customer needs 
E)  emphasized human resource management activities

Question 5

Which of the following is NOT an action that a company should take to perform value chain activities more cost-effectively?

Accepted Answer

A)  striving to capture all available economies of scale and taking advantage of experience and learning-curve effects 
B)  trying to operate facilities at full capacity 
C)  adopting labor-saving operating methods 
D)  improving supply chain efficiency 
E)  over-differentiating so that product features exceed the needs of most buyers 
A)  striving to capture all available economies of scale and taking advantage of experience and learning-curve effects 
B)  trying to operate facilities at full capacity 
C)  adopting labor-saving operating methods 
D)  improving supply chain efficiency 
E)  over-differentiating so that product features exceed the needs of most buyers

Question 6

What are the pitfalls to be avoided in pursuing a broad differentiation strategy?

Accepted Answer

Following are the pitfalls in pursuing a

Question 7

Approaches to enhancing differentiation through changes in the value chain do NOT include

Accepted Answer

A)  coordinating with retailers to enhance the buying experience and building a company's image. 
B)  coordinating with suppliers to speed up new product development cycles. 
C)  coordinating with distributors or shippers to lower shipping costs. 
D)  collaborating with suppliers to improve many dimensions affecting product features and quality. 
E)  coordinating with employees to create a greater incentive system to encourage worker productivity. 
A)  coordinating with retailers to enhance the buying experience and building a company's image. 
B)  coordinating with suppliers to speed up new product development cycles. 
C)  coordinating with distributors or shippers to lower shipping costs. 
D)  collaborating with suppliers to improve many dimensions affecting product features and quality. 
E)  coordinating with employees to create a greater incentive system to encourage worker productivity.

Question 8

Broad differentiation strategies generally work best in market situations where

Accepted Answer

A)  low-cost value drivers are easily obtained. 
B)  socially complex intangible attributes such as company reputation, long-standing relationships with buyers, and image are relatively easier to imitate. 
C)  the products of rivals are weakly differentiated and most competitors are resorting to clever advertising to try to set their product offerings apart. 
D)  technological change is fast-paced and competition revolves around rapidly evolving product features. 
E)  market competition revolves around slowly evolving product features. 
A)  low-cost value drivers are easily obtained. 
B)  socially complex intangible attributes such as company reputation, long-standing relationships with buyers, and image are relatively easier to imitate. 
C)  the products of rivals are weakly differentiated and most competitors are resorting to clever advertising to try to set their product offerings apart. 
D)  technological change is fast-paced and competition revolves around rapidly evolving product features. 
E)  market competition revolves around slowly evolving product features.

Question 9

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 10

Success with a best-cost provider strategy designed to outcompete high-end differentiators requires

Accepted Answer

A)  achieving significantly lower costs in providing the upscale features. 
B)  providing significantly better product attributes in order to justify a price above what low-cost leaders are charging. 
C)  matching the company's resources and capabilities to a low-cost provider status. 
D)  motivating buyers to purchase upscale features that match rivals. 
E)  achieving the lowest costs in the industry. 
A)  achieving significantly lower costs in providing the upscale features. 
B)  providing significantly better product attributes in order to justify a price above what low-cost leaders are charging. 
C)  matching the company's resources and capabilities to a low-cost provider status. 
D)  motivating buyers to purchase upscale features that match rivals. 
E)  achieving the lowest costs in the industry.

Question 11

What market conditions and circumstances make a low-cost provider strategy attractive? What are the pitfalls in pursuing a low-cost provider strategy? What can go wrong?

Accepted Answer

Market conditions and circumstances that

Question 12

Identify cost drivers in a company's value chain. Explain how these drivers impact a firm's generic strategy.

Accepted Answer

A cost driver is a factor having a stron

Question 13

What are value drivers?

Accepted Answer

A)  a set of factors (analogous to cost drivers) that are particularly effective in having a strong differentiation effect 
B)  a firm's hidden success factor for creating over-the-top product features that will command the highest price in the industry 
C)  a technique for easily identifying factors that validate a firm's performance 
D)  a set of factors that verify the unique nature of a firm 
E)  a set of guidelines for identifying the most promising upscale attributes to incorporate into a product 
A)  a set of factors (analogous to cost drivers) that are particularly effective in having a strong differentiation effect 
B)  a firm's hidden success factor for creating over-the-top product features that will command the highest price in the industry 
C)  a technique for easily identifying factors that validate a firm's performance 
D)  a set of factors that verify the unique nature of a firm 
E)  a set of guidelines for identifying the most promising upscale attributes to incorporate into a product

Question 14

A company's biggest vulnerability in employing a best-cost provider strategy is

Accepted Answer

A)  relying too heavily on outsourcing. 
B)  getting squeezed between the strategies of firms employing low-cost provider strategies and high-end differentiation strategies. 
C)  getting trapped in a price war with low-cost leaders. 
D)  being timid in cutting its prices far enough below high-end differentiators to win away many of their customers. 
E)  not having a sustainable distinctive competence in cost reduction. 
A)  relying too heavily on outsourcing. 
B)  getting squeezed between the strategies of firms employing low-cost provider strategies and high-end differentiation strategies. 
C)  getting trapped in a price war with low-cost leaders. 
D)  being timid in cutting its prices far enough below high-end differentiators to win away many of their customers. 
E)  not having a sustainable distinctive competence in cost reduction.

Question 15

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 16

The marketing emphasis of a company pursuing a broad differentiation strategy usually is to

Accepted Answer

A)  underprice rival brands with comparable features. 
B)  tout differentiating features and charge a premium price that more than covers the extra costs of differentiating features. 
C)  out-advertise rivals and make frequent use of discount coupons. 
D)  emphasize selling directly to end-users and promoting personalized customer service. 
E)  communicate the product's ability to serve the customer's every need. 
A)  underprice rival brands with comparable features. 
B)  tout differentiating features and charge a premium price that more than covers the extra costs of differentiating features. 
C)  out-advertise rivals and make frequent use of discount coupons. 
D)  emphasize selling directly to end-users and promoting personalized customer service. 
E)  communicate the product's ability to serve the customer's every need.

Question 17

A differentiation strategy works best when

Accepted Answer

A)  technological change is fast-paced and competition revolves around rapidly evolving product features. 
B)  buyers' needs are homogeneous. 
C)  many rival firms are also pursuing a differentiation approach. 
D)  there are few other ways to make a product unique to buyers. 
E)  firms have ample excess cash to invest in R&D activities. 
A)  technological change is fast-paced and competition revolves around rapidly evolving product features. 
B)  buyers' needs are homogeneous. 
C)  many rival firms are also pursuing a differentiation approach. 
D)  there are few other ways to make a product unique to buyers. 
E)  firms have ample excess cash to invest in R&D activities.

Question 18

A low-cost leadership strategy becomes competitively powerful when

Accepted Answer

A)  buyers of the product or service use the product or service in the same ways. 
B)  the offerings of rival firms are essentially unique, different, and customized to end-users. 
C)  price competition among rivals is absent. 
D)  buyers prefer that the products/services of competing sellers have widely varying attributes and prices. 
E)  buyers have high switching costs. 
A)  buyers of the product or service use the product or service in the same ways. 
B)  the offerings of rival firms are essentially unique, different, and customized to end-users. 
C)  price competition among rivals is absent. 
D)  buyers prefer that the products/services of competing sellers have widely varying attributes and prices. 
E)  buyers have high switching costs.

Question 19

An example of how companies can revamp their value chain to reduce costs is to

Accepted Answer

A)  have suppliers locate their plants close to companies' own facilities. 
B)  continue to utilize traditional methods of distribution and sales. 
C)  not make any changes in product manufacturing but change end distribution methods. 
D)  increase extra services to increase staffing requirements. 
E)  facilitate the learning curve by providing superior training to new employees. 
A)  have suppliers locate their plants close to companies' own facilities. 
B)  continue to utilize traditional methods of distribution and sales. 
C)  not make any changes in product manufacturing but change end distribution methods. 
D)  increase extra services to increase staffing requirements. 
E)  facilitate the learning curve by providing superior training to new employees.

Question 20

A competitive strategy to be the low-cost provider in an industry works well when

Accepted Answer

A)  price competition among rival sellers is especially sluggish. 
B)  there are numerous ways to achieve product differentiation that have no value to buyers. 
C)  buyers incur high costs in switching their purchases from one seller/brand to another. 
D)  industry newcomers use introductory low prices to attract buyers and build a customer base. 
E)  industry newcomers use high introductory prices to let buyers know they have a superior product to build a customer base. 
A)  price competition among rival sellers is especially sluggish. 
B)  there are numerous ways to achieve product differentiation that have no value to buyers. 
C)  buyers incur high costs in switching their purchases from one seller/brand to another. 
D)  industry newcomers use introductory low prices to attract buyers and build a customer base. 
E)  industry newcomers use high introductory prices to let buyers know they have a superior product to build a customer base.

A broad differentiation strategy improves profitability when

The objective of a competitive strategy is to

Domino's Pizza has a well-known slogan: "We'll deliver in 30 minutes or less, or it's free!" With it what has the pizza maker achieved?

Which of the following is NOT an action that a company should take to perform value chain activities more cost-effectively?

What are the pitfalls to be avoided in pursuing a broad differentiation strategy?

Approaches to enhancing differentiation through changes in the value chain do NOT include

Broad differentiation strategies generally work best in market situations where

A focused differentiation strategy aims at securing competitive advantage by

Success with a best-cost provider strategy designed to outcompete high-end differentiators requires

What market conditions and circumstances make a low-cost provider strategy attractive? What are the pitfalls in pursuing a low-cost provider strategy? What can go wrong?

Identify cost drivers in a company's value chain. Explain how these drivers impact a firm's generic strategy.

What are value drivers?

A company's biggest vulnerability in employing a best-cost provider strategy is

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

The marketing emphasis of a company pursuing a broad differentiation strategy usually is to

A differentiation strategy works best when

A low-cost leadership strategy becomes competitively powerful when

An example of how companies can revamp their value chain to reduce costs is to

A competitive strategy to be the low-cost provider in an industry works well when

What Is Strategy and Why Is It Important

Leading the Process of Crafting and Executing Strategy

Evaluating a Companys External Environment

Evaluating a Companys Resources and Competitive Position

Supplementing the Chosen Competitive Strategy: Other Important Business Strategy Choices

Strategies for Competing in Foreign Markets

Diversification: Strategies for Managing a Group of Businesses

Ethical Business Strategies, Social Responsibility, and Environmental Sustainabil ITY

Building an Organization Capable of Good Strategy Execution

Managing Internal Operations: Actions That Promote Good Strategy Execution

Corporate Culture and Leadership: Keys to Good Strategy Execution

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Exam 5: The Five Generic Competitive Strategies: Which One to Employ

A broad differentiation strategy improves profitability when

The objective of a competitive strategy is to

Domino's Pizza has a well-known slogan: "We'll deliver in 30 minutes or less, or it's free!" With it what has the pizza maker achieved?

Which of the following is NOT an action that a company should take to perform value chain activities more cost-effectively?

What are the pitfalls to be avoided in pursuing a broad differentiation strategy?

Approaches to enhancing differentiation through changes in the value chain do NOT include

Broad differentiation strategies generally work best in market situations where

A focused differentiation strategy aims at securing competitive advantage by

Success with a best-cost provider strategy designed to outcompete high-end differentiators requires

What market conditions and circumstances make a low-cost provider strategy attractive? What are the pitfalls in pursuing a low-cost provider strategy? What can go wrong?

Identify cost drivers in a company's value chain. Explain how these drivers impact a firm's generic strategy.

What are value drivers?

A company's biggest vulnerability in employing a best-cost provider strategy is

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

The marketing emphasis of a company pursuing a broad differentiation strategy usually is to

A differentiation strategy works best when

A low-cost leadership strategy becomes competitively powerful when

An example of how companies can revamp their value chain to reduce costs is to

A competitive strategy to be the low-cost provider in an industry works well when

What Is Strategy and Why Is It Important

Leading the Process of Crafting and Executing Strategy

Evaluating a Companys External Environment

Evaluating a Companys Resources and Competitive Position

Supplementing the Chosen Competitive Strategy: Other Important Business Strategy Choices

Strategies for Competing in Foreign Markets

Diversification: Strategies for Managing a Group of Businesses

Ethical Business Strategies, Social Responsibility, and Environmental Sustainabil ITY

Building an Organization Capable of Good Strategy Execution

Managing Internal Operations: Actions That Promote Good Strategy Execution

Corporate Culture and Leadership: Keys to Good Strategy Execution

Filters