Question 1

Best-cost provider strategies are those that

Accepted Answer

A)  are a hybrid of low-cost provider and differentiation strategies that aim at providing desired attributes while beating rivals on price. 
B)  are rewarded by providing buyers with the best attributes at a premium. 
C)  have strategy elements related to the lowest-cost provider in the largest and fastest growing (or best) market segment. 
D)  look for a low-cost advantage rather than a differentiation advantage. 
E)  look for a differentiation advantage rather than a low-cost advantage. 
A)  are a hybrid of low-cost provider and differentiation strategies that aim at providing desired attributes while beating rivals on price. 
B)  are rewarded by providing buyers with the best attributes at a premium. 
C)  have strategy elements related to the lowest-cost provider in the largest and fastest growing (or best) market segment. 
D)  look for a low-cost advantage rather than a differentiation advantage. 
E)  look for a differentiation advantage rather than a low-cost advantage.

Question 2

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 3

A low-cost provider strategy can defeat a differentiation strategy when

Accepted Answer

A)  sellers are not charging a price premium. 
B)  many rivals are pursuing a similar differentiation approach. 
C)  a company can offset thinner profit margins per unit by selling enough additional units to increase total profits. 
D)  there are few ways to differentiate a product or a service and many buyers perceive these differences valuable. 
E)  customers are basically satisfied and don't think extra attributes are worth a higher price features. 
A)  sellers are not charging a price premium. 
B)  many rivals are pursuing a similar differentiation approach. 
C)  a company can offset thinner profit margins per unit by selling enough additional units to increase total profits. 
D)  there are few ways to differentiate a product or a service and many buyers perceive these differences valuable. 
E)  customers are basically satisfied and don't think extra attributes are worth a higher price features.

Question 4

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.

Question 5

Describe the strategy of striving to be the industry's overall low-cost provider. What does a company have to do to achieve low-cost provider status?

Accepted Answer

The strategy of striving to be the indus

Question 6

A focused low-cost strategy seeks to achieve competitive advantage by

Accepted Answer

A)  outmatching competitors in offering niche members an absolute rock-bottom price. 
B)  delivering more value for lesser money than other competitors. 
C)  performing the primary value chain activities at a lower cost per unit than can the industry's low-cost leaders. 
D)  dominating more market niches in the industry via a lower cost and a lower price than any other rival. 
E)  serving buyers in a narrow piece of the total market (target market niche) at a lower cost and lower price than rivals. 
A)  outmatching competitors in offering niche members an absolute rock-bottom price. 
B)  delivering more value for lesser money than other competitors. 
C)  performing the primary value chain activities at a lower cost per unit than can the industry's low-cost leaders. 
D)  dominating more market niches in the industry via a lower cost and a lower price than any other rival. 
E)  serving buyers in a narrow piece of the total market (target market niche) at a lower cost and lower price than rivals.

Question 7

How valuable a low-cost leader's cost advantage is depends on

Accepted Answer

A)  whether it is easy or inexpensive for rivals to copy the low-cost leader's methods or otherwise match its low costs. 
B)  how easy it is for the low-cost leader to gain the biggest market share. 
C)  the aggressiveness with which the low-cost leader pursues converting the cost advantage into the absolute lowest possible costs. 
D)  the leader's ability to combine the cost advantage with a reputation for good quality. 
E)  the low-cost leader's ability to be the industry leader in manufacturing innovation so as to keep lowering its manufacturing costs. 
A)  whether it is easy or inexpensive for rivals to copy the low-cost leader's methods or otherwise match its low costs. 
B)  how easy it is for the low-cost leader to gain the biggest market share. 
C)  the aggressiveness with which the low-cost leader pursues converting the cost advantage into the absolute lowest possible costs. 
D)  the leader's ability to combine the cost advantage with a reputation for good quality. 
E)  the low-cost leader's ability to be the industry leader in manufacturing innovation so as to keep lowering its manufacturing costs.

Question 8

Describe the two basic cost-reducing approaches a company can take to become a low-cost provider in its industry.

Accepted Answer

The two basic cost-reducing approaches a

Question 9

What are the five generic competitive strategies? Briefly describe each one and identify the type of competitive advantage that each strategy is aimed at achieving.

Accepted Answer

The five generic competitive strategies

Question 10

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 11

A drink manufacturer finds setting up a plant to make its own bottle caps expensive and technically difficult. Which of the following will be most helpful in solving the manufacturer's problem?

Accepted Answer

A)  outsourcing 
B)  achieving economies of scale 
C)  lowering input costs 
D)  increasing bargaining power 
E)  going for a vertical integration with a distributor 
A)  outsourcing 
B)  achieving economies of scale 
C)  lowering input costs 
D)  increasing bargaining power 
E)  going for a vertical integration with a distributor

Question 12

Successful broad differentiation allows a firm to

Accepted Answer

A)  be the industry's best-cost provider. 
B)  set the industry ceiling on price. 
C)  avoid being dragged into a price war with industry rivals and not be overly concerned about whether entry barriers into the industry are high or low. 
D)  command a premium price for its product, and/or increase unit sales, and/or gain buyer loyalty to its brand. 
E)  take sales and market share away from rivals by undercutting them on price. 
A)  be the industry's best-cost provider. 
B)  set the industry ceiling on price. 
C)  avoid being dragged into a price war with industry rivals and not be overly concerned about whether entry barriers into the industry are high or low. 
D)  command a premium price for its product, and/or increase unit sales, and/or gain buyer loyalty to its brand. 
E)  take sales and market share away from rivals by undercutting them on price.

Question 13

Focusing the ability can secure a competitive edge but also carries some risks that could be detrimental to the focused firm, such as

Accepted Answer

A)  the likelihood that a focused company will become so cost efficient it will achieve excessive profits. 
B)  the potential for the preferences and needs of niche members to shift over time toward mainstream provider product attributes. 
C)  the potential for the niche to become so attractive it will not attract new competitors thereby providing excessive market segment profits. 
D)  the potential for technological advances to favor only low-cost providers. 
E)  the likelihood that a focused company will become so cost inefficient it will achieve excessive profits. 
A)  the likelihood that a focused company will become so cost efficient it will achieve excessive profits. 
B)  the potential for the preferences and needs of niche members to shift over time toward mainstream provider product attributes. 
C)  the potential for the niche to become so attractive it will not attract new competitors thereby providing excessive market segment profits. 
D)  the potential for technological advances to favor only low-cost providers. 
E)  the likelihood that a focused company will become so cost inefficient it will achieve excessive profits.

Question 14

A focused low-cost strategy can lead to attractive competitive advantage when

Accepted Answer

A)  buyers are looking for the best value at the best price. 
B)  buyers are looking for a budget-priced product. 
C)  buyers are price sensitive and are attracted to brands with low switching costs. 
D)  a market is emerging and demand in the target market niche is growing rapidly and is served by industry-wide competitors. 
E)  a firm can lower costs significantly by limiting its customer base to a well-defined buyer segment. 
A)  buyers are looking for the best value at the best price. 
B)  buyers are looking for a budget-priced product. 
C)  buyers are price sensitive and are attracted to brands with low switching costs. 
D)  a market is emerging and demand in the target market niche is growing rapidly and is served by industry-wide competitors. 
E)  a firm can lower costs significantly by limiting its customer base to a well-defined buyer segment.

Question 15

The competitive advantage of a best-cost provider is

Accepted Answer

A)  having the best value chain in the industry. 
B)  its brand name reputation. 
C)  its capability to incorporate upscale or attractive attributes into its product offering at lower costs than rivals. 
D)  a distinctive competence in delivering top-notch quality and customer service. 
E)  a distinctive competence in supply chain management. 
A)  having the best value chain in the industry. 
B)  its brand name reputation. 
C)  its capability to incorporate upscale or attractive attributes into its product offering at lower costs than rivals. 
D)  a distinctive competence in delivering top-notch quality and customer service. 
E)  a distinctive competence in supply chain management.

Question 16

A company's competitive strategy should

Accepted Answer

A)  ensure it is designed to concentrate on a small range of products so it can react quickly to competitive moves. 
B)  be well matched to its internal situation and predicated on leveraging its collection of competitively valuable resources and competencies. 
C)  be well matched to its resources and capabilities in order to incorporate standard attributes into its product offering. 
D)  be supportive with its objective to become at least an average performer within its industry. 
E)  be well attuned to doing an outstanding job of satisfying the needs and expectations of niche buyers. 
A)  ensure it is designed to concentrate on a small range of products so it can react quickly to competitive moves. 
B)  be well matched to its internal situation and predicated on leveraging its collection of competitively valuable resources and competencies. 
C)  be well matched to its resources and capabilities in order to incorporate standard attributes into its product offering. 
D)  be supportive with its objective to become at least an average performer within its industry. 
E)  be well attuned to doing an outstanding job of satisfying the needs and expectations of niche buyers.

Question 17

A broad differentiation strategy works best in situations where

Accepted Answer

A)  technological change is slow-paced and new or improved products are infrequent. 
B)  buyer needs and uses of the product or service are very similar. 
C)  buyers incur low costs in switching their purchases to rival brands. 
D)  buyers have a low degree of bargaining power and purchase the product frequently. 
E)  buyers needs and uses of the product or service are diverse. 
A)  technological change is slow-paced and new or improved products are infrequent. 
B)  buyer needs and uses of the product or service are very similar. 
C)  buyers incur low costs in switching their purchases to rival brands. 
D)  buyers have a low degree of bargaining power and purchase the product frequently. 
E)  buyers needs and uses of the product or service are diverse.

Question 18

One of the big dangers in crafting a competitive strategy is that managers, torn between the pros and cons of the various generic strategies, will opt for "stuck in the middle" strategies that represent compromises between lower costs and greater differentiation and between broad and narrow market appeal. True or false? Explain your answer.

Accepted Answer

A) True 
 B)False

Question 19

The generic types of competitive strategies include

Accepted Answer

A)  market share growth provider, sales revenue leader strategy, and market share retention strategy. 
B)  offensive strategies, defensive strategies, and counter maneuvers strategies. 
C)  low-cost provider, broad differentiation, best-cost provider, focused low-cost, and focused differentiation strategies. 
D)  low-cost/low-price strategies, high-quality/high-price strategies, and medium quality/medium price strategies. 
E)  price leader strategies, price follower strategies, technology leader strategies, and first-mover strategies. 
A)  market share growth provider, sales revenue leader strategy, and market share retention strategy. 
B)  offensive strategies, defensive strategies, and counter maneuvers strategies. 
C)  low-cost provider, broad differentiation, best-cost provider, focused low-cost, and focused differentiation strategies. 
D)  low-cost/low-price strategies, high-quality/high-price strategies, and medium quality/medium price strategies. 
E)  price leader strategies, price follower strategies, technology leader strategies, and first-mover strategies.

Question 20

Which of the following companies is using cost drivers effectively to manage value chain activities cost efficiently?

Accepted Answer

A)  Company A orders large amounts of supplies and keeps them stocked until customer demand rises to prevent falling behind schedule in meeting customer needs. 
B)  Company B uses just-in-time inventories and produces made-to-order products as and when customer demand rises. 
C)  Company C collects customer requests first and starts processing them only after reaching a certain number. 
D)  Company D routes all its supplies to a warehouse for storage and then transports them to individual factories for processing. 
E)  Company E substitutes lower-cost inputs with high-quality, high-cost inputs to gain customer attention and loyalty. 
A)  Company A orders large amounts of supplies and keeps them stocked until customer demand rises to prevent falling behind schedule in meeting customer needs. 
B)  Company B uses just-in-time inventories and produces made-to-order products as and when customer demand rises. 
C)  Company C collects customer requests first and starts processing them only after reaching a certain number. 
D)  Company D routes all its supplies to a warehouse for storage and then transports them to individual factories for processing. 
E)  Company E substitutes lower-cost inputs with high-quality, high-cost inputs to gain customer attention and loyalty.

Best-cost provider strategies are those that

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

A low-cost provider strategy can defeat a differentiation strategy when

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

Describe the strategy of striving to be the industry's overall low-cost provider. What does a company have to do to achieve low-cost provider status?

A focused low-cost strategy seeks to achieve competitive advantage by

How valuable a low-cost leader's cost advantage is depends on

Describe the two basic cost-reducing approaches a company can take to become a low-cost provider in its industry.

What are the five generic competitive strategies? Briefly describe each one and identify the type of competitive advantage that each strategy is aimed at achieving.

The target market of a best-cost provider is

A drink manufacturer finds setting up a plant to make its own bottle caps expensive and technically difficult. Which of the following will be most helpful in solving the manufacturer's problem?

Successful broad differentiation allows a firm to

Focusing the ability can secure a competitive edge but also carries some risks that could be detrimental to the focused firm, such as

A focused low-cost strategy can lead to attractive competitive advantage when

The competitive advantage of a best-cost provider is

A company's competitive strategy should

A broad differentiation strategy works best in situations where

The generic types of competitive strategies include

Which of the following companies is using cost drivers effectively to manage value chain activities cost efficiently?

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

Best-cost provider strategies are those that

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

A low-cost provider strategy can defeat a differentiation strategy when

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

Describe the strategy of striving to be the industry's overall low-cost provider. What does a company have to do to achieve low-cost provider status?

A focused low-cost strategy seeks to achieve competitive advantage by

How valuable a low-cost leader's cost advantage is depends on

Describe the two basic cost-reducing approaches a company can take to become a low-cost provider in its industry.

What are the five generic competitive strategies? Briefly describe each one and identify the type of competitive advantage that each strategy is aimed at achieving.

The target market of a best-cost provider is

A drink manufacturer finds setting up a plant to make its own bottle caps expensive and technically difficult. Which of the following will be most helpful in solving the manufacturer's problem?

Successful broad differentiation allows a firm to

Focusing the ability can secure a competitive edge but also carries some risks that could be detrimental to the focused firm, such as

A focused low-cost strategy can lead to attractive competitive advantage when

The competitive advantage of a best-cost provider is

A company's competitive strategy should

A broad differentiation strategy works best in situations where

The generic types of competitive strategies include

Which of the following companies is using cost drivers effectively to manage value chain activities cost efficiently?

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