Question 1

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 2

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.

Question 3

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 4

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 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)  technological change is fast-paced and competition revolves around rapidly evolving product features. 
A)  technological change is slow-paced and new or improved products are infrequent. 
B)  buyer needs and uses of the product 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)  technological change is fast-paced and competition revolves around rapidly evolving product features.

Question 5

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 6

A ketchup manufacturer convinces a supplier who makes vinegar to set up a nearby plant.Which of the following benefits will the ketchup manufacturer be least assured of?

Accepted Answer

A)  Improved value chain system 
B)  Improved overall quality control 
C)  Lower incoming shipping costs 
D)  Just-in-time deliveries 
E)  Reduced storage needs 
A)  Improved value chain system 
B)  Improved overall quality control 
C)  Lower incoming shipping costs 
D)  Just-in-time deliveries 
E)  Reduced storage needs

Question 7

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

Accepted Answer

The pitfalls in pursuing a broad differe

Question 8

Achieving a differentiation-based competitive advantage does NOT involve:

Accepted Answer

A)  incorporating product attributes and user features that lower a buyer's overall cost of using the product. 
B)  incorporating features that raise the performance a buyer gets from using the product. 
C)  incorporating features that enhance buyer satisfaction in noneconomic or intangible ways. 
D)  delivering value to customers via competencies and competitive capabilities that rivals don't have or can't afford to match. 
E)  appealing to buyers on the basis of attributes that rivals are emphasizing 
A)  incorporating product attributes and user features that lower a buyer's overall cost of using the product. 
B)  incorporating features that raise the performance a buyer gets from using the product. 
C)  incorporating features that enhance buyer satisfaction in noneconomic or intangible ways. 
D)  delivering value to customers via competencies and competitive capabilities that rivals don't have or can't afford to match. 
E)  appealing to buyers on the basis of attributes that rivals are emphasizing

Question 9

Which of the five generic competitive strategies are most likely to be best suited for an industry whose product may be customized to create a cheaper version? Explain.

Accepted Answer

The low-cost provider strategy will be s

Question 10

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 11

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.

Question 12

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 13

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 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

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 16

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 the 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 the 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 17

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 18

What are the keys to sustaining a focused low-cost strategy?

Accepted Answer

The keys to sustaining a focused low-cos

Question 19

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 20

Best-cost provider strategies are appealing in those market situations where:

Accepted Answer

A)  diverse buyer preferences make product differentiation the norm and where a large number of value-conscious buyers can be induced to purchase mid-range products. 
B)  a company is positioned between competitors who have ultra-low prices and competitors who have top-notch products in terms of both quality and performance. 
C)  buyers are more quality-conscious than price-conscious. 
D)  there are numerous buyer segments, buyer needs are diverse across these segments, only a few of the segments are growing rapidly, and sellers' products are strongly differentiated. 
E)  buyers are more performance-conscious than value-conscious. 
A)  diverse buyer preferences make product differentiation the norm and where a large number of value-conscious buyers can be induced to purchase mid-range products. 
B)  a company is positioned between competitors who have ultra-low prices and competitors who have top-notch products in terms of both quality and performance. 
C)  buyers are more quality-conscious than price-conscious. 
D)  there are numerous buyer segments, buyer needs are diverse across these segments, only a few of the segments are growing rapidly, and sellers' products are strongly differentiated. 
E)  buyers are more performance-conscious than value-conscious.

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

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

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

A broad differentiation strategy works best in situations where:

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.

A ketchup manufacturer convinces a supplier who makes vinegar to set up a nearby plant.Which of the following benefits will the ketchup manufacturer be least assured of?

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

Achieving a differentiation-based competitive advantage does NOT involve:

Which of the five generic competitive strategies are most likely to be best suited for an industry whose product may be customized to create a cheaper version? Explain.

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?

A broad differentiation strategy improves profitability when:

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

The objective of differentiation is to:

Brands create customer loyalty,which in turn:

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

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

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

What are the keys to sustaining a focused low-cost strategy?

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

Best-cost provider strategies are appealing in those market situations where:

What Is Strategy and Why Is It Important

Charting a Companys Direction: Its Vision, Mission, Objectives, Andstrategy

Evaluating a Companys External Environment

Evaluating a Companys Resources, Capabilities,and Competitiveness

Strengthening a Companys Competitive Position

Strategies for Competing in International Markets

Corporate Strategy

Ethics, Corporate Social Responsibility, Environmental-Sustainability, and Strategy

Building an Organization Capable of Good Strategy Execution

Managing Internal Operations

Corporate Culture and Leadership

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Exam 5: The Five Generic Competitive Strategies

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

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

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

A broad differentiation strategy works best in situations where:

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.

A ketchup manufacturer convinces a supplier who makes vinegar to set up a nearby plant.Which of the following benefits will the ketchup manufacturer be least assured of?

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

Achieving a differentiation-based competitive advantage does NOT involve:

Which of the five generic competitive strategies are most likely to be best suited for an industry whose product may be customized to create a cheaper version? Explain.

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?

A broad differentiation strategy improves profitability when:

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

The objective of differentiation is to:

Brands create customer loyalty,which in turn:

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

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

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

What are the keys to sustaining a focused low-cost strategy?

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

Best-cost provider strategies are appealing in those market situations where:

What Is Strategy and Why Is It Important

Charting a Companys Direction: Its Vision, Mission, Objectives, Andstrategy

Evaluating a Companys External Environment

Evaluating a Companys Resources, Capabilities,and Competitiveness

Strengthening a Companys Competitive Position

Strategies for Competing in International Markets

Corporate Strategy

Ethics, Corporate Social Responsibility, Environmental-Sustainability, and Strategy

Building an Organization Capable of Good Strategy Execution

Managing Internal Operations

Corporate Culture and Leadership

Filters