Question 1

A differentiation strategy enables a business to address the five competitive forces by

Accepted Answer

A) having brand-loyal customers become more sensitive to prices. 
B) increasing economies of scale. 
C) providing protection against rivalry. 
D) serving a broader market segment. 
A) having brand-loyal customers become more sensitive to prices. 
B) increasing economies of scale. 
C) providing protection against rivalry. 
D) serving a broader market segment.

Question 2

The primary aim of strategic management at the business level is

Accepted Answer

A) maximizing risk-return tradeoffs through diversification. 
B) achieving competitive advantage. 
C) maximizing differentiation of products and/or services. 
D) achieving a low cost position. 
A) maximizing risk-return tradeoffs through diversification. 
B) achieving competitive advantage. 
C) maximizing differentiation of products and/or services. 
D) achieving a low cost position.

Question 3

If a firm has a successful differentiation strategy, it is necessary to attain parity on cost.

Accepted Answer

A) True 
 B)False

Question 4

Corporations increasingly collect and analyze data on their customers. This is known as

Accepted Answer

A) profit analysis. 
B) big data. 
C) cost reduction. 
D) automated analysis. 
A) profit analysis. 
B) big data. 
C) cost reduction. 
D) automated analysis.

Question 5

A cost leadership strategy is not susceptible to the risk of reduced flexibility.

Accepted Answer

A) True 
 B)False

Question 6

Proctor and Gamble announced that it would sell off or close down up to 100 of its brands. This is an example of which turnaround strategy used by successful companies?

Accepted Answer

A) asset and cost surgery 
B) selective product and market pruning 
C) piecemeal productivity improvements 
D) global expansion 
A) asset and cost surgery 
B) selective product and market pruning 
C) piecemeal productivity improvements 
D) global expansion

Question 7

The decline stage of the industry life cycle stage is inevitably followed by death.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is a risk (or potential pitfall) of cost leadership?

Accepted Answer

A) Cost cutting may lead to the loss of desirable features. 
B) Attempts to stay ahead of the competition may lead to gold plating. 
C) Cost differences increase as the market matures. 
D) Producers are more able to withstand increases in supplier costs. 
A) Cost cutting may lead to the loss of desirable features. 
B) Attempts to stay ahead of the competition may lead to gold plating. 
C) Cost differences increase as the market matures. 
D) Producers are more able to withstand increases in supplier costs.

Question 9

Which of the following is not a potential pitfall of an integrated overall low cost and differentiation strategy?

Accepted Answer

A) Firms that target too large a market that causes unit costs to increase. 
B) Firms that underestimate the expenses associated with coordinating value-creating activities in the extended value chain. 
C) Firms that fail to attain both strategies may end up with neither and become stuck-in-the-middle. 
D) Firms that miscalculate sources of revenue and profit pools in the company industry. 
A) Firms that target too large a market that causes unit costs to increase. 
B) Firms that underestimate the expenses associated with coordinating value-creating activities in the extended value chain. 
C) Firms that fail to attain both strategies may end up with neither and become stuck-in-the-middle. 
D) Firms that miscalculate sources of revenue and profit pools in the company industry.

Question 10

A cost leadership strategy can be at risk of becoming obsolete and must be evaluated regularly in terms of current competitor responses.

Accepted Answer

A) True 
 B)False

Question 11

The Commerce Bank gains customers by using reverse positioning to structure its offers. It pared down its offers to just four checking accounts.

Accepted Answer

A) True 
 B)False

Question 12

An important idea behind the profit pool concept is that there is always a strong relationship between the generation of revenues and the capturing of profits.

Accepted Answer

A) True 
 B)False

Question 13

Most turnarounds require a firm to carefully analyze its relevant environments. The _______ analysis leads to identification of market segments or customer groups that may still find the product attractive.

Accepted Answer

A) external 
B) internal 
C) global 
D) environmental 
A) external 
B) internal 
C) global 
D) environmental

Question 14

A low-cost position protects firms against powerful buyers.

Accepted Answer

A) True 
 B)False

Question 15

A low-cost position provides more flexibility to cope with demands from powerful suppliers for input cost decreases.

Accepted Answer

A) True 
 B)False

Question 16

An important potential pitfall of an integrated overall cost leadership and differentiation strategy is that firms may fail to implement either one and become stuck in the middle.

Accepted Answer

A) True 
 B)False

Question 17

At one CVS drugstore, a four-pack of Energizer AA batteries was on sale at 2.99 USD compared with a Duracell four-pack at 4.59 USD. The Duracell market share dropped 2 percent in a recent two-year period, and its profits declined over 30 percent. Why did this happen?

Accepted Answer

A) The price differential was too high. 
B) The market for batteries is saturated. 
C) The customer perceived the products to be different. 
D) There are valid alternatives for batteries. 
A) The price differential was too high. 
B) The market for batteries is saturated. 
C) The customer perceived the products to be different. 
D) There are valid alternatives for batteries.

Question 18

A firm can attain an overall cost leadership position by increasing the management layers in order to reduce overhead costs.

Accepted Answer

A) True 
 B)False

Question 19

The reason Dell lost its competitive advantage is that it focused too much on operational efficiency and not enough on innovations demanded by the changing market.

Accepted Answer

A) True 
 B)False

Question 20

Firms in turnaround situations find that cutting administrative expenses and inventories and speeding up collection of receivables provide no real value.

Accepted Answer

A) True 
 B)False

A differentiation strategy enables a business to address the five competitive forces by

The primary aim of strategic management at the business level is

If a firm has a successful differentiation strategy, it is necessary to attain parity on cost.

Corporations increasingly collect and analyze data on their customers. This is known as

A cost leadership strategy is not susceptible to the risk of reduced flexibility.

Proctor and Gamble announced that it would sell off or close down up to 100 of its brands. This is an example of which turnaround strategy used by successful companies?

The decline stage of the industry life cycle stage is inevitably followed by death.

Which of the following is a risk (or potential pitfall) of cost leadership?

Which of the following is not a potential pitfall of an integrated overall low cost and differentiation strategy?

A cost leadership strategy can be at risk of becoming obsolete and must be evaluated regularly in terms of current competitor responses.

The Commerce Bank gains customers by using reverse positioning to structure its offers. It pared down its offers to just four checking accounts.

An important idea behind the profit pool concept is that there is always a strong relationship between the generation of revenues and the capturing of profits.

Most turnarounds require a firm to carefully analyze its relevant environments. The _______ analysis leads to identification of market segments or customer groups that may still find the product attractive.

A low-cost position protects firms against powerful buyers.

A low-cost position provides more flexibility to cope with demands from powerful suppliers for input cost decreases.

An important potential pitfall of an integrated overall cost leadership and differentiation strategy is that firms may fail to implement either one and become stuck in the middle.

At one CVS drugstore, a four-pack of Energizer AA batteries was on sale at 2.99 USD compared with a Duracell four-pack at 4.59 USD. The Duracell market share dropped 2 percent in a recent two-year period, and its profits declined over 30 percent. Why did this happen?

A firm can attain an overall cost leadership position by increasing the management layers in order to reduce overhead costs.

The reason Dell lost its competitive advantage is that it focused too much on operational efficiency and not enough on innovations demanded by the changing market.

Firms in turnaround situations find that cutting administrative expenses and inventories and speeding up collection of receivables provide no real value.

Strategic Management: Creating Competitive Advantages

Analyzing the External Environment of the Firm: Creating Competitive Advantages

Assessing the Internal Environment of the Firm

Recognizing a Firms Intellectual Assets: Moving Beyond a Firms Tangible Resources

Corporate-Level Strategy: Creating Value Through Diversification

International Strategy: Creating Value in Global Markets

Entrepreneurial Strategy and Competitive Dynamics

Strategic Control and Corporate Governance

Creating Effective Organizational Designs

Strategic Leadership: Creating a Learning Organization and an Ethical Organization

Managing Innovation and Fostering Corporate Entrepreneurship

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Exam 5: Business-Level Strategy: Creating and Sustaining Competitive Advantages

A differentiation strategy enables a business to address the five competitive forces by

The primary aim of strategic management at the business level is

If a firm has a successful differentiation strategy, it is necessary to attain parity on cost.

Corporations increasingly collect and analyze data on their customers. This is known as

A cost leadership strategy is not susceptible to the risk of reduced flexibility.

Proctor and Gamble announced that it would sell off or close down up to 100 of its brands. This is an example of which turnaround strategy used by successful companies?

The decline stage of the industry life cycle stage is inevitably followed by death.

Which of the following is a risk (or potential pitfall) of cost leadership?

Which of the following is not a potential pitfall of an integrated overall low cost and differentiation strategy?

A cost leadership strategy can be at risk of becoming obsolete and must be evaluated regularly in terms of current competitor responses.

The Commerce Bank gains customers by using reverse positioning to structure its offers. It pared down its offers to just four checking accounts.

An important idea behind the profit pool concept is that there is always a strong relationship between the generation of revenues and the capturing of profits.

Most turnarounds require a firm to carefully analyze its relevant environments. The _______ analysis leads to identification of market segments or customer groups that may still find the product attractive.

A low-cost position protects firms against powerful buyers.

A low-cost position provides more flexibility to cope with demands from powerful suppliers for input cost decreases.

An important potential pitfall of an integrated overall cost leadership and differentiation strategy is that firms may fail to implement either one and become stuck in the middle.

At one CVS drugstore, a four-pack of Energizer AA batteries was on sale at 2.99 USD compared with a Duracell four-pack at 4.59 USD. The Duracell market share dropped 2 percent in a recent two-year period, and its profits declined over 30 percent. Why did this happen?

A firm can attain an overall cost leadership position by increasing the management layers in order to reduce overhead costs.

The reason Dell lost its competitive advantage is that it focused too much on operational efficiency and not enough on innovations demanded by the changing market.

Firms in turnaround situations find that cutting administrative expenses and inventories and speeding up collection of receivables provide no real value.

Strategic Management: Creating Competitive Advantages

Analyzing the External Environment of the Firm: Creating Competitive Advantages

Assessing the Internal Environment of the Firm

Recognizing a Firms Intellectual Assets: Moving Beyond a Firms Tangible Resources

Corporate-Level Strategy: Creating Value Through Diversification

International Strategy: Creating Value in Global Markets

Entrepreneurial Strategy and Competitive Dynamics

Strategic Control and Corporate Governance

Creating Effective Organizational Designs

Strategic Leadership: Creating a Learning Organization and an Ethical Organization

Managing Innovation and Fostering Corporate Entrepreneurship

Filters