Question 1

Each of the following is likely to help a company's low-cost provider strategy succeed EXCEPT

Accepted Answer

A)  resources and capabilities to keep costs below those of its competitors. 
B)  cost-effective management of value chain activities better than rivals. 
C)  effective leveraging of cost drivers. 
D)  having the innovative capability to bypass certain value chain activities being performed by rivals. 
E)  capabilities to simultaneously deliver lower cost and higher-quality/differentiated features. 
A)  resources and capabilities to keep costs below those of its competitors. 
B)  cost-effective management of value chain activities better than rivals. 
C)  effective leveraging of cost drivers. 
D)  having the innovative capability to bypass certain value chain activities being performed by rivals. 
E)  capabilities to simultaneously deliver lower cost and higher-quality/differentiated features.

Question 2

What sets focused (or market niche) strategies apart from low-cost leadership and broad differentiation strategies is

Accepted Answer

A)  the extra attention paid to top-notch product performance and product quality. 
B)  their concentrated attention on serving the needs of buyers in a narrow piece of the overall market. 
C)  greater opportunity for competitive advantage. 
D)  their suitability for market situations where most industry rivals have weakly differentiated products. 
E)  their objective of delivering more value for the least money. 
A)  the extra attention paid to top-notch product performance and product quality. 
B)  their concentrated attention on serving the needs of buyers in a narrow piece of the overall market. 
C)  greater opportunity for competitive advantage. 
D)  their suitability for market situations where most industry rivals have weakly differentiated products. 
E)  their objective of delivering more value for the least money.

Question 3

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 4

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 5

Which of the following is NOT a value driver of a broad differentiation strategy?

Accepted Answer

A)  Create product features that appeal to a wide range of buyers. 
B)  Improve customer service or add extra services. 
C)  Seek out high quality inputs. 
D)  Emphasize human resource management activities that improve the skills, expertise, and knowledge of company personnel. 
E)  Utilize just-in-time inventories and made-to-order products when customer demand rises and that buyers consider worth the cost. 
A)  Create product features that appeal to a wide range of buyers. 
B)  Improve customer service or add extra services. 
C)  Seek out high quality inputs. 
D)  Emphasize human resource management activities that improve the skills, expertise, and knowledge of company personnel. 
E)  Utilize just-in-time inventories and made-to-order products when customer demand rises and that buyers consider worth the cost.

Question 6

A strategy to be the industry's overall low-cost provider tends to be more appealing than a differentiation or best-cost or focus/market niche strategy when

Accepted Answer

A)  there are many ways to achieve product differentiation that buyers find appealing. 
B)  buyers use the product in a variety of different ways and have high switching costs in changing from one seller's product to another. 
C)  the offerings of rival firms are essentially identical, standardized, commodity-like products. 
D)  entry barriers are high and competition from substitutes is relatively weak. 
E)  the market is composed of many distinct segments with varying buyer needs and expectations. 
A)  there are many ways to achieve product differentiation that buyers find appealing. 
B)  buyers use the product in a variety of different ways and have high switching costs in changing from one seller's product to another. 
C)  the offerings of rival firms are essentially identical, standardized, commodity-like products. 
D)  entry barriers are high and competition from substitutes is relatively weak. 
E)  the market is composed of many distinct segments with varying buyer needs and expectations.

Question 7

The major avenues for achieving a cost advantage over rivals include

Accepted Answer

A)  performing value chain activities more cost-effectively than rivals or revamping the firm's overall value chain to eliminate or bypass some cost-producing activities. 
B)  having a management team that is highly skilled in cutting costs. 
C)  being a first-mover in adopting the latest state-of-the-art technologies, especially those relating to low-cost manufacture. 
D)  outsourcing high-cost activities to cost-efficient vendors. 
E)  paying lower wages and salaries than rivals. 
A)  performing value chain activities more cost-effectively than rivals or revamping the firm's overall value chain to eliminate or bypass some cost-producing activities. 
B)  having a management team that is highly skilled in cutting costs. 
C)  being a first-mover in adopting the latest state-of-the-art technologies, especially those relating to low-cost manufacture. 
D)  outsourcing high-cost activities to cost-efficient vendors. 
E)  paying lower wages and salaries than rivals.

Question 8

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 9

Whether a broad differentiation strategy ends up enhancing a company's profitability depends mainly on whether

Accepted Answer

A)  many buyers view the product's differentiating features as having value. 
B)  most buyers have similar needs and use the product in the same ways. 
C)  most buyers accept the customer value proposition as unique and the product can produce sufficient unit sales to cover the costs of achieving the differentiation. 
D)  buyer switching costs are low and customer loyalty to any one brand is low. 
E)  buyers are prone to shop the market for sellers offering the best price. 
A)  many buyers view the product's differentiating features as having value. 
B)  most buyers have similar needs and use the product in the same ways. 
C)  most buyers accept the customer value proposition as unique and the product can produce sufficient unit sales to cover the costs of achieving the differentiation. 
D)  buyer switching costs are low and customer loyalty to any one brand is low. 
E)  buyers are prone to shop the market for sellers offering the best price.

Question 10

A route to take in developing a differentiation advantage includes

Accepted Answer

A)  incorporating product attributes and user features that raise the buyer's overall costs, but keep the price minimal. 
B)  incorporating tangible features that add functionality, increase customer satisfaction with the product specifications, functions, and styling. 
C)  signaling value by targeting sophisticated buyers. 
D)  incorporating intangible features that enhance buyer satisfaction in economic ways. 
E)  emphasizing high quality and performance of products through a standard and simple, no-fuss packaging. 
A)  incorporating product attributes and user features that raise the buyer's overall costs, but keep the price minimal. 
B)  incorporating tangible features that add functionality, increase customer satisfaction with the product specifications, functions, and styling. 
C)  signaling value by targeting sophisticated buyers. 
D)  incorporating intangible features that enhance buyer satisfaction in economic ways. 
E)  emphasizing high quality and performance of products through a standard and simple, no-fuss packaging.

Question 11

Which one of the five generic competitive strategies is most likely to be best suited for an industry whose product is a commodity? Explain.

Accepted Answer

A low-cost provider strategy tends to wo

Question 12

Which of the following companies is NOT the lowest-cost provider in its industry?

Accepted Answer

A)  Southwest Airlines 
B)  Walmart 
C)  Nucor Steel 
D)  CNN 
E)  Amazon 
A)  Southwest Airlines 
B)  Walmart 
C)  Nucor Steel 
D)  CNN 
E)  Amazon

Question 13

The biggest and most important differences among the competitive strategies of different companies boil down to

Accepted Answer

A)  how they go about building a brand name image that buyers trust and whether they are a risk-taker or risk-avoider. 
B)  the different ways the companies try to cope with the five competitive forces. 
C)  whether a company's market target is broad or narrow and whether the company is pursuing a competitive advantage linked to low cost or differentiation. 
D)  the kinds of actions companies take to improve their competitive assets and reduce their competitive liabilities. 
E)  the relative emphasis they place on offensive versus defensive strategies. 
A)  how they go about building a brand name image that buyers trust and whether they are a risk-taker or risk-avoider. 
B)  the different ways the companies try to cope with the five competitive forces. 
C)  whether a company's market target is broad or narrow and whether the company is pursuing a competitive advantage linked to low cost or differentiation. 
D)  the kinds of actions companies take to improve their competitive assets and reduce their competitive liabilities. 
E)  the relative emphasis they place on offensive versus defensive strategies.

Question 14

Brands create customer loyalty, which in turn

Accepted Answer

A)  increases the perceived cost of switching to another product. 
B)  strengthens the product's quality. 
C)  validates the motivation for alternate products. 
D)  provides monetary incentive for using the product. 
E)  allows a company to operate facilities at full capacity. 
A)  increases the perceived cost of switching to another product. 
B)  strengthens the product's quality. 
C)  validates the motivation for alternate products. 
D)  provides monetary incentive for using the product. 
E)  allows a company to operate facilities at full capacity.

Question 15

What are the distinctive features of a focused differentiation strategy? How is it different from a broad differentiation strategy?

Accepted Answer

In a focused differentiation strategy th

Question 16

Low-cost leaders who have the lowest industry costs are likely to

Accepted Answer

A)  have outmanaged rivals in finding ways to perform value chain activities more cost-effectively. 
B)  be considering exiting the current product market and use their competitive low-cost strength to gain a competitive advantage in other product arenas. 
C)  be favorites to win the game of strategy in the long run. 
D)  understand that driving costs to the lowest possible level is the only way to sell cheap products to consumers. 
E)  understand that they have lower bargaining power with suppliers than rivals who employ a different strategy. 
A)  have outmanaged rivals in finding ways to perform value chain activities more cost-effectively. 
B)  be considering exiting the current product market and use their competitive low-cost strength to gain a competitive advantage in other product arenas. 
C)  be favorites to win the game of strategy in the long run. 
D)  understand that driving costs to the lowest possible level is the only way to sell cheap products to consumers. 
E)  understand that they have lower bargaining power with suppliers than rivals who employ a different strategy.

Question 17

Which of the following is NOT one of the pitfalls of pursuing a differentiation strategy?

Accepted Answer

A)  over-emphasizing efforts to strongly differentiate the company's product from those of rivals rather than being content with weak product differentiation 
B)  offering trivial improvements in quality, service, or performance features 
C)  overcharging for the differentiating features 
D)  adding so many frills and extra features that the product exceeds the needs of buyers 
E)  overspending on efforts to differentiate the company's product offering 
A)  over-emphasizing efforts to strongly differentiate the company's product from those of rivals rather than being content with weak product differentiation 
B)  offering trivial improvements in quality, service, or performance features 
C)  overcharging for the differentiating features 
D)  adding so many frills and extra features that the product exceeds the needs of buyers 
E)  overspending on efforts to differentiate the company's product offering

Question 18

The objective of differentiation is to

Accepted Answer

A)  offer customers something rivals can't, at least in terms of the level of satisfaction. 
B)  develop strategies that are different from those of rivals. 
C)  establish objectives that are measurable and meaningful when it comes to sales growth. 
D)  offer customers a sustainable competitive advantage. 
E)  offer a diverse range of comparable products with low switching costs. 
A)  offer customers something rivals can't, at least in terms of the level of satisfaction. 
B)  develop strategies that are different from those of rivals. 
C)  establish objectives that are measurable and meaningful when it comes to sales growth. 
D)  offer customers a sustainable competitive advantage. 
E)  offer a diverse range of comparable products with low switching costs.

Question 19

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

Accepted Answer

A uniqueness driver is a value chain act

Question 20

A low-cost leader can translate its low-cost advantage over rivals into superior profit performance by

Accepted Answer

A)  underpricing rivals and attracting quality-sensitive buyers in great enough numbers. 
B)  maintaining the present price and using the lower-cost edge to earn a higher profit margin on each unit sold. 
C)  going all out to use its cost advantage to capture a dominant share of the market. 
D)  spending heavily on advertising to promote its cost advantage to build strong customer loyalty. 
E)  outproducing rivals and thus having more available units for sale. 
A)  underpricing rivals and attracting quality-sensitive buyers in great enough numbers. 
B)  maintaining the present price and using the lower-cost edge to earn a higher profit margin on each unit sold. 
C)  going all out to use its cost advantage to capture a dominant share of the market. 
D)  spending heavily on advertising to promote its cost advantage to build strong customer loyalty. 
E)  outproducing rivals and thus having more available units for sale.

Each of the following is likely to help a company's low-cost provider strategy succeed EXCEPT

What sets focused (or market niche) strategies apart from low-cost leadership and broad differentiation strategies is

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

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

Which of the following is NOT a value driver of a broad differentiation strategy?

A strategy to be the industry's overall low-cost provider tends to be more appealing than a differentiation or best-cost or focus/market niche strategy when

The major avenues for achieving a cost advantage over rivals include

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

Whether a broad differentiation strategy ends up enhancing a company's profitability depends mainly on whether

A route to take in developing a differentiation advantage includes

Which one of the five generic competitive strategies is most likely to be best suited for an industry whose product is a commodity? Explain.

Which of the following companies is NOT the lowest-cost provider in its industry?

The biggest and most important differences among the competitive strategies of different companies boil down to

Brands create customer loyalty, which in turn

What are the distinctive features of a focused differentiation strategy? How is it different from a broad differentiation strategy?

Low-cost leaders who have the lowest industry costs are likely to

Which of the following is NOT one of the pitfalls of pursuing a differentiation strategy?

The objective of differentiation is to

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

A low-cost leader can translate its low-cost advantage over rivals into superior profit performance by

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

Each of the following is likely to help a company's low-cost provider strategy succeed EXCEPT

What sets focused (or market niche) strategies apart from low-cost leadership and broad differentiation strategies is

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

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

Which of the following is NOT a value driver of a broad differentiation strategy?

A strategy to be the industry's overall low-cost provider tends to be more appealing than a differentiation or best-cost or focus/market niche strategy when

The major avenues for achieving a cost advantage over rivals include

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

Whether a broad differentiation strategy ends up enhancing a company's profitability depends mainly on whether

A route to take in developing a differentiation advantage includes

Which one of the five generic competitive strategies is most likely to be best suited for an industry whose product is a commodity? Explain.

Which of the following companies is NOT the lowest-cost provider in its industry?

The biggest and most important differences among the competitive strategies of different companies boil down to

Brands create customer loyalty, which in turn

What are the distinctive features of a focused differentiation strategy? How is it different from a broad differentiation strategy?

Low-cost leaders who have the lowest industry costs are likely to

Which of the following is NOT one of the pitfalls of pursuing a differentiation strategy?

The objective of differentiation is to

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

A low-cost leader can translate its low-cost advantage over rivals into superior profit performance by

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