Question 1

A differentiation-based competitive advantage

Accepted Answer

A)  nearly always is attached to the quality and service aspects of a company's product offering. 
B)  usually is the result of highly effective marketing and advertising to enhance the brand, raise awareness, and build consistent customer experience. 
C)  requires developing at least one distinctive competence that buyers consider valuable. 
D)  hinges on a company's success in developing top-of-the-line product features that will command the highest price premium in the industry. 
E)  often hinges on incorporating features that raise the performance of the product or lower the buyer's overall costs of using the company's product, or enhances buyer satisfaction in intangible or noneconomic ways, or delivers value to customers by differentiating on the basis of competencies and capabilities that rivals can't match. 
A)  nearly always is attached to the quality and service aspects of a company's product offering. 
B)  usually is the result of highly effective marketing and advertising to enhance the brand, raise awareness, and build consistent customer experience. 
C)  requires developing at least one distinctive competence that buyers consider valuable. 
D)  hinges on a company's success in developing top-of-the-line product features that will command the highest price premium in the industry. 
E)  often hinges on incorporating features that raise the performance of the product or lower the buyer's overall costs of using the company's product, or enhances buyer satisfaction in intangible or noneconomic ways, or delivers value to customers by differentiating on the basis of competencies and capabilities that rivals can't match.

Question 2

Which one of the following does NOT represent market circumstances that make a focused low-cost or focused differentiation strategy attractive?

Accepted Answer

A)  when the target market niche is big enough to be profitable and offers good growth potential 
B)  when the industry has many different segments and market niches, thereby allowing a focuser to pick an attractive niche suited to its resource strengths and capabilities 
C)  when it is costly or difficult for multisegment competitors to meet the specialized needs of the target market niche and at the same time satisfy the expectations of their mainstream customers 
D)  when industry leaders have chosen not to compete in the niche 
E)  when buyers are not strongly brand loyal and a large number of other rivals are attempting to specialize in the same target segment 
A)  when the target market niche is big enough to be profitable and offers good growth potential 
B)  when the industry has many different segments and market niches, thereby allowing a focuser to pick an attractive niche suited to its resource strengths and capabilities 
C)  when it is costly or difficult for multisegment competitors to meet the specialized needs of the target market niche and at the same time satisfy the expectations of their mainstream customers 
D)  when industry leaders have chosen not to compete in the niche 
E)  when buyers are not strongly brand loyal and a large number of other rivals are attempting to specialize in the same target segment

Question 3

The culture of a company can be a cost-efficient value chain activity because it can

Accepted Answer

A)  allow for safeguarding internalized operating benefits. 
B)  distinguish a company's capacity integration efforts. 
C)  spur worker pride in productivity and continuous improvement. 
D)  foster quality technological enhancements. 
E)  increase a company's bargaining power with suppliers. 
A)  allow for safeguarding internalized operating benefits. 
B)  distinguish a company's capacity integration efforts. 
C)  spur worker pride in productivity and continuous improvement. 
D)  foster quality technological enhancements. 
E)  increase a company's bargaining power with suppliers.

Question 4

Being the overall low-cost provider in an industry has the attractive advantage of

Accepted Answer

A)  building strong customer loyalty and locking customers into its product because customers have high switching costs. 
B)  giving the firm a very appealing brand image. 
C)  putting a firm in the best position to win the business of price-sensitive customers and earn profits by setting the floor on market price. 
D)  putting the company in a strong position to be more profitable than companies pursuing a differentiation strategy. 
E)  greatly reducing the strong bargaining power of rivals with the key distributors. 
A)  building strong customer loyalty and locking customers into its product because customers have high switching costs. 
B)  giving the firm a very appealing brand image. 
C)  putting a firm in the best position to win the business of price-sensitive customers and earn profits by setting the floor on market price. 
D)  putting the company in a strong position to be more profitable than companies pursuing a differentiation strategy. 
E)  greatly reducing the strong bargaining power of rivals with the key distributors.

Question 5

Which of the following is NOT one of the ways that a non-capital-intensive company can achieve a cost advantage by revamping its value chain?

Accepted Answer

A)  creating a direct sales force and bypassing activities and costs of distributors and dealers 
B)  conducting sales operations at the company's website 
C)  increasing production capacity and then striving hard to operate at full capacity 
D)  relocating facilities so as to curb the cost for shipping and handling activities 
E)  streamlining operations by eliminating low value-added or unnecessary work steps and activities 
A)  creating a direct sales force and bypassing activities and costs of distributors and dealers 
B)  conducting sales operations at the company's website 
C)  increasing production capacity and then striving hard to operate at full capacity 
D)  relocating facilities so as to curb the cost for shipping and handling activities 
E)  streamlining operations by eliminating low value-added or unnecessary work steps and activities

Question 6

For a company's competitive strategy to succeed in delivering favorable performance and the intended competitive edge over rivals, it has to be well-matched to a company's internal situation and underpinned by an appropriate set of resources, know-how, and competitive capabilities. True or false? Explain your answer.

Accepted Answer

A) True 
 B)False

Question 7

For a best-cost provider strategy to be successful, a company must have

Accepted Answer

A)  excellent marketing and sales skills in convincing buyers to pay a premium price for the attributes/features incorporated in its product. 
B)  resource strengths and competitive capabilities that allow it to incorporate upscale attributes at lower costs than rivals whose products have similar upscale attributes. 
C)  access to greater learning/experience curve effects and scale economies than rivals. 
D)  one of the best-known and most respected brand names in the industry. 
E)  a short, low-cost value chain. 
A)  excellent marketing and sales skills in convincing buyers to pay a premium price for the attributes/features incorporated in its product. 
B)  resource strengths and competitive capabilities that allow it to incorporate upscale attributes at lower costs than rivals whose products have similar upscale attributes. 
C)  access to greater learning/experience curve effects and scale economies than rivals. 
D)  one of the best-known and most respected brand names in the industry. 
E)  a short, low-cost value chain.

Question 8

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 9

A mobile manufacturer decides to reduce the price of its latest line of smart phones, which are not the cheapest but have features that are popular among most users. Which strategy is the manufacturer using?

Accepted Answer

The best-cost provider strategy gives cu

Question 10

A fast-food restaurant stocks bread, meat, sauces, and other main ingredients, but does not assemble and cook its burgers and sandwiches until a customer places an order. Which cost driver is the restaurant efficiently using to cut costs?

Accepted Answer

A)  supply chain efficiencies 
B)  economies of scale 
C)  incentive systems and culture 
D)  bargaining power 
E)  capacity utilization 
A)  supply chain efficiencies 
B)  economies of scale 
C)  incentive systems and culture 
D)  bargaining power 
E)  capacity utilization

Question 11

In which of the following market circumstances is a broad differentiation strategy generally NOT well-suited?

Accepted Answer

A)  when buyer needs and preferences are too diverse to be fully satisfied by a standardized product 
B)  when few rivals are pursuing a similar differentiation approach 
C)  when the products of rivals are weakly differentiated 
D)  when there are many ways to differentiate a product or a service and many buyers perceive these differences valuable 
E)  when technological change is fast-paced and competition revolves around rapidly evolving product features 
A)  when buyer needs and preferences are too diverse to be fully satisfied by a standardized product 
B)  when few rivals are pursuing a similar differentiation approach 
C)  when the products of rivals are weakly differentiated 
D)  when there are many ways to differentiate a product or a service and many buyers perceive these differences valuable 
E)  when technological change is fast-paced and competition revolves around rapidly evolving product features

Question 12

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 13

What is the primary target market for a best cost-provider?

Accepted Answer

A)  value hunting buyers 
B)  price-conscious buyers 
C)  best-price driven buyers 
D)  value-conscious buyers 
E)  brand-conscious buyer 
A)  value hunting buyers 
B)  price-conscious buyers 
C)  best-price driven buyers 
D)  value-conscious buyers 
E)  brand-conscious buyer

Question 14

Cost-efficient management of a company's overall value chain activities requires that management

Accepted Answer

A)  ferret out cost-saving opportunities in every part of the value chain. 
B)  undertake an operations functionality redesign. 
C)  establish sales productivity and operating practices guidelines. 
D)  re-create rivals' assembly plant structuration savings. 
E)  pursue a differentiation strategy that can be easily copied. 
A)  ferret out cost-saving opportunities in every part of the value chain. 
B)  undertake an operations functionality redesign. 
C)  establish sales productivity and operating practices guidelines. 
D)  re-create rivals' assembly plant structuration savings. 
E)  pursue a differentiation strategy that can be easily copied.

Question 15

Companies pursue closer coordination and collaboration with channel suppliers to better address customer needs in order to

Accepted Answer

A)  develop human resource management activities that improve the skills, expertise, and knowledge of company personnel. 
B)  achieve low cost provider status through the value chain system. 
C)  enhance differentiation through the value chain system. 
D)  compensate for inadequate or outdated production capacity. 
E)  improve their scores on the competitive assessment matrix. 
A)  develop human resource management activities that improve the skills, expertise, and knowledge of company personnel. 
B)  achieve low cost provider status through the value chain system. 
C)  enhance differentiation through the value chain system. 
D)  compensate for inadequate or outdated production capacity. 
E)  improve their scores on the competitive assessment matrix.

Question 16

A competitive strategy of striving to be the low-cost provider is particularly attractive when

Accepted Answer

A)  buyers are not very price-conscious. 
B)  most rivals are trying to be best-cost providers. 
C)  there are many ways to achieve product differentiation that have value to buyers. 
D)  most buyers use the product in much the same ways, with user requirements calling for a standardized product. 
E)  most rivals are pursuing focused low-cost or focused differentiation strategies. 
A)  buyers are not very price-conscious. 
B)  most rivals are trying to be best-cost providers. 
C)  there are many ways to achieve product differentiation that have value to buyers. 
D)  most buyers use the product in much the same ways, with user requirements calling for a standardized product. 
E)  most rivals are pursuing focused low-cost or focused differentiation strategies.

Question 17

The major difference between a low-cost provider strategy and a focused low-cost strategy is the

Accepted Answer

A)  amount of outsourcing involved. 
B)  length of the managerial experience curve. 
C)  size of the buyer group to which a company is appealing. 
D)  number of upscale attributes incorporated into the product offering. 
E)  production methods being used to achieve a low-cost competitive advantage. 
A)  amount of outsourcing involved. 
B)  length of the managerial experience curve. 
C)  size of the buyer group to which a company is appealing. 
D)  number of upscale attributes incorporated into the product offering. 
E)  production methods being used to achieve a low-cost competitive advantage.

Question 18

Achieving a sure cost advantage over rivals entails

Accepted Answer

A)  concentrating on the primary activities portion of the value chain and outsourcing all support activities. 
B)  being a first-mover in pursuing backward and forward integration and controlling as much of the industry value chain as possible. 
C)  selling a mostly standard product and increasing the scale of operation. 
D)  minimizing R&D expenses and paying below-average wages and salaries to conserve on labor costs. 
E)  producing a standard product, redesigning the product infrequently, and having minimal advertising. 
A)  concentrating on the primary activities portion of the value chain and outsourcing all support activities. 
B)  being a first-mover in pursuing backward and forward integration and controlling as much of the industry value chain as possible. 
C)  selling a mostly standard product and increasing the scale of operation. 
D)  minimizing R&D expenses and paying below-average wages and salaries to conserve on labor costs. 
E)  producing a standard product, redesigning the product infrequently, and having minimal advertising.

Question 19

What type of competitive advantage does a best-cost provider strategy aim at achieving? Explain what a company has to do to achieve this advantage.

Accepted Answer

Best-cost strategies create competitive

Question 20

The production emphasis of a company pursuing a broad differentiation strategy usually involves

Accepted Answer

A)  eliminating cost reduction and decreasing quality and essential features to boost profitability. 
B)  strong efforts to be a leader in manufacturing process innovation. 
C)  emphasis on building differentiating features that buyers are willing to pay for and includes wide selection and many product variations. 
D)  the aggressive pursuit of economies of scale and experience-curve effects. 
E)  developing a distinctive competence in zero-defect manufacturing techniques. 
A)  eliminating cost reduction and decreasing quality and essential features to boost profitability. 
B)  strong efforts to be a leader in manufacturing process innovation. 
C)  emphasis on building differentiating features that buyers are willing to pay for and includes wide selection and many product variations. 
D)  the aggressive pursuit of economies of scale and experience-curve effects. 
E)  developing a distinctive competence in zero-defect manufacturing techniques.

A differentiation-based competitive advantage

Which one of the following does NOT represent market circumstances that make a focused low-cost or focused differentiation strategy attractive?

The culture of a company can be a cost-efficient value chain activity because it can

Being the overall low-cost provider in an industry has the attractive advantage of

Which of the following is NOT one of the ways that a non-capital-intensive company can achieve a cost advantage by revamping its value chain?

For a best-cost provider strategy to be successful, a company must have

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

A mobile manufacturer decides to reduce the price of its latest line of smart phones, which are not the cheapest but have features that are popular among most users. Which strategy is the manufacturer using?

A fast-food restaurant stocks bread, meat, sauces, and other main ingredients, but does not assemble and cook its burgers and sandwiches until a customer places an order. Which cost driver is the restaurant efficiently using to cut costs?

In which of the following market circumstances is a broad differentiation strategy generally NOT well-suited?

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

What is the primary target market for a best cost-provider?

Cost-efficient management of a company's overall value chain activities requires that management

Companies pursue closer coordination and collaboration with channel suppliers to better address customer needs in order to

A competitive strategy of striving to be the low-cost provider is particularly attractive when

The major difference between a low-cost provider strategy and a focused low-cost strategy is the

Achieving a sure cost advantage over rivals entails

What type of competitive advantage does a best-cost provider strategy aim at achieving? Explain what a company has to do to achieve this advantage.

The production emphasis of a company pursuing a broad differentiation strategy usually involves

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 differentiation-based competitive advantage

Which one of the following does NOT represent market circumstances that make a focused low-cost or focused differentiation strategy attractive?

The culture of a company can be a cost-efficient value chain activity because it can

Being the overall low-cost provider in an industry has the attractive advantage of

Which of the following is NOT one of the ways that a non-capital-intensive company can achieve a cost advantage by revamping its value chain?

For a best-cost provider strategy to be successful, a company must have

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

A mobile manufacturer decides to reduce the price of its latest line of smart phones, which are not the cheapest but have features that are popular among most users. Which strategy is the manufacturer using?

A fast-food restaurant stocks bread, meat, sauces, and other main ingredients, but does not assemble and cook its burgers and sandwiches until a customer places an order. Which cost driver is the restaurant efficiently using to cut costs?

In which of the following market circumstances is a broad differentiation strategy generally NOT well-suited?

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

What is the primary target market for a best cost-provider?

Cost-efficient management of a company's overall value chain activities requires that management

Companies pursue closer coordination and collaboration with channel suppliers to better address customer needs in order to

A competitive strategy of striving to be the low-cost provider is particularly attractive when

The major difference between a low-cost provider strategy and a focused low-cost strategy is the

Achieving a sure cost advantage over rivals entails

What type of competitive advantage does a best-cost provider strategy aim at achieving? Explain what a company has to do to achieve this advantage.

The production emphasis of a company pursuing a broad differentiation strategy usually involves

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