Question 1

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 2

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 3

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 4

Explain how the marketing emphasis of a low-cost provider differs from the marketing emphasis of a best-cost provider.

Accepted Answer

The marketing emphasis of a low cost pro

Question 5

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 till 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 till 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.

Question 6

Broad differentiation strategies are well-suited for market circumstances where:

Accepted Answer

A)  there are many ways to differentiate the product or service that have value to buyers. 
B)  most buyers have the same needs and use the product in the same ways. 
C)  technological changes are slow-paced. 
D)  barriers to entry are high and suppliers have a low degree of bargaining power. 
E)  price competition is especially vigorous. 
A)  there are many ways to differentiate the product or service that have value to buyers. 
B)  most buyers have the same needs and use the product in the same ways. 
C)  technological changes are slow-paced. 
D)  barriers to entry are high and suppliers have a low degree of bargaining power. 
E)  price competition is especially vigorous.

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

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 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 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 circumstances is a strategy to be the industry's overall low-cost provider NOT particularly well-matched to the market situation?

Accepted Answer

A)  When the offerings of rival firms are essentially identical and readily available from many eager sellers 
B)  When there are few ways to achieve differentiation that have value to buyers 
C)  When price competition among rival sellers is especially vigorous 
D)  When buyers have widely varying needs and special requirements, and the prices of substitute products are relatively high 
E)  When the majority of industry sales are made to a few, large-volume buyers 
A)  When the offerings of rival firms are essentially identical and readily available from many eager sellers 
B)  When there are few ways to achieve differentiation that have value to buyers 
C)  When price competition among rival sellers is especially vigorous 
D)  When buyers have widely varying needs and special requirements, and the prices of substitute products are relatively high 
E)  When the majority of industry sales are made to a few, large-volume buyers

Question 12

An organic foods manufacturer insists on portraying the cleanliness of its farms in its advertisements,charges a higher price for its products,and sells its products only through reputable distributors.What strategy is the manufacturer using to deliver superior value to customers?

Accepted Answer

A)  Signaling the value of the company's product offering to buyers 
B)  Incorporating intangible features 
C)  Incorporating tangible features 
D)  Lowering the buyer's overall cost 
E)  Lowering the overall bargaining power from suppliers 
A)  Signaling the value of the company's product offering to buyers 
B)  Incorporating intangible features 
C)  Incorporating tangible features 
D)  Lowering the buyer's overall cost 
E)  Lowering the overall bargaining power from suppliers

Question 13

What are value drivers?

Accepted Answer

A)  A set of factors (analogous to cost drivers) that are particularly effective in having a strong differentiation effect 
B)  A firm's hidden success factor for creating over-the-top product features that will command the highest price in the industry 
C)  A technique for easily identifying factors that validate a firm's performance 
D)  A set of factors that verify the unique nature of a firm 
E)  A set of guidelines for identifying the most promising upscale attributes to incorporate into a product 
A)  A set of factors (analogous to cost drivers) that are particularly effective in having a strong differentiation effect 
B)  A firm's hidden success factor for creating over-the-top product features that will command the highest price in the industry 
C)  A technique for easily identifying factors that validate a firm's performance 
D)  A set of factors that verify the unique nature of a firm 
E)  A set of guidelines for identifying the most promising upscale attributes to incorporate into a product

Question 14

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 15

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

Accepted Answer

A)  have out managed 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 out managed 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 16

In what market and competitive circumstances are focused low-cost and focused differentiation strategies attractive?

Accepted Answer

Focused low-cost and focused differentia

Question 17

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 18

The competitive objective of a best-cost provider strategy is to:

Accepted Answer

A)  outmatch the resource strengths of both low-cost providers and differentiators. 
B)  position the company outside the competitive arena of low-cost producers and differentiators. 
C)  meet or exceed buyer expectations on key quality/performance/features/service attributes and beat their expectations on price (given what rivals are charging for much the same attributes). 
D)  deliver superior value to buyers by doing such a good job of cost control that it ends up with the best cost (as compared to rivals) in performing each activity in its value chain. 
E)  identify and concentrate on those differentiating features that are inexpensive to incorporate. 
A)  outmatch the resource strengths of both low-cost providers and differentiators. 
B)  position the company outside the competitive arena of low-cost producers and differentiators. 
C)  meet or exceed buyer expectations on key quality/performance/features/service attributes and beat their expectations on price (given what rivals are charging for much the same attributes). 
D)  deliver superior value to buyers by doing such a good job of cost control that it ends up with the best cost (as compared to rivals) in performing each activity in its value chain. 
E)  identify and concentrate on those differentiating features that are inexpensive to incorporate.

Question 19

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 20

A competitive strategy to be the low-cost provider in an industry works well when:

Accepted Answer

A)  price competition among rival sellers is especially sluggish. 
B)  there are numerous ways to achieve product differentiation that have no value to buyers. 
C)  buyers incur high costs in switching their purchases from one seller/brand to another. 
D)  industry newcomers use introductory low prices to attract buyers and build a customer base. 
E)  industry newcomers use high introductory prices to let buyers know they have a superior product to build a customer base. 
A)  price competition among rival sellers is especially sluggish. 
B)  there are numerous ways to achieve product differentiation that have no value to buyers. 
C)  buyers incur high costs in switching their purchases from one seller/brand to another. 
D)  industry newcomers use introductory low prices to attract buyers and build a customer base. 
E)  industry newcomers use high introductory prices to let buyers know they have a superior product to build a customer base.

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

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

Successful broad differentiation allows a firm to:

Explain how the marketing emphasis of a low-cost provider differs from the marketing emphasis of a best-cost provider.

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

Broad differentiation strategies are well-suited for market circumstances where:

The major avenues for achieving a cost advantage over rivals include:

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

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

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 circumstances is a strategy to be the industry's overall low-cost provider NOT particularly well-matched to the market situation?

An organic foods manufacturer insists on portraying the cleanliness of its farms in its advertisements,charges a higher price for its products,and sells its products only through reputable distributors.What strategy is the manufacturer using to deliver superior value to customers?

What are value drivers?

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

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

In what market and competitive circumstances are focused low-cost and focused differentiation strategies attractive?

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?

The competitive objective of a best-cost provider strategy is to:

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

A competitive strategy to be the low-cost provider in an industry works well when:

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

Exam 5: The Five Generic Competitive Strategies

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

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

Successful broad differentiation allows a firm to:

Explain how the marketing emphasis of a low-cost provider differs from the marketing emphasis of a best-cost provider.

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

Broad differentiation strategies are well-suited for market circumstances where:

The major avenues for achieving a cost advantage over rivals include:

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

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

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 circumstances is a strategy to be the industry's overall low-cost provider NOT particularly well-matched to the market situation?

An organic foods manufacturer insists on portraying the cleanliness of its farms in its advertisements,charges a higher price for its products,and sells its products only through reputable distributors.What strategy is the manufacturer using to deliver superior value to customers?

What are value drivers?

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

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

In what market and competitive circumstances are focused low-cost and focused differentiation strategies attractive?

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?

The competitive objective of a best-cost provider strategy is to:

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

A competitive strategy to be the low-cost provider in an industry works well when:

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