Question 1

In which one 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 and most competitors are resorting to clever advertising to try to set their product offerings apart 
D)  When there are many ways to differentiate the product or service and many buyers perceive these differences as having value 
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 and most competitors are resorting to clever advertising to try to set their product offerings apart 
D)  When there are many ways to differentiate the product or service and many buyers perceive these differences as having value 
E)  When technological change is fast-paced and competition revolves around rapidly evolving product features

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 it is costly or difficult for multi-segment competitors to put capabilities in place to meet the specialized needs of the target market niche and at the same time satisfy the expectations of their mainstream customers 
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 industry leaders do not see that having a presence in the niche is crucial to their own success 
D)  When the target market niche is not overcrowded with a number of other rivals attempting to focus on the same niche 
E)  When many rivals are attempting to specialize in the same segment 
A)  When it is costly or difficult for multi-segment competitors to put capabilities in place to meet the specialized needs of the target market niche and at the same time satisfy the expectations of their mainstream customers 
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 industry leaders do not see that having a presence in the niche is crucial to their own success 
D)  When the target market niche is not overcrowded with a number of other rivals attempting to focus on the same niche 
E)  When many rivals are attempting to specialize in the same segment

Question 3

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 4

The keys to sustaining a broad differentiation strategy are

Accepted Answer

A)  to stress constant innovation to stay ahead of imitative rivals and to concentrate on a few differentiating features. 
B)  to charge a premium price that more than covers the extra costs of differentiating features and to convince customers to be brand loyal. 
C)  to out-innovate and out-advertise rivals. 
D)  to emphasize personalized customer service and to add as many differentiating features as possible. 
E)  to keep prices close to the average of all rivals and to spend heavily on new product R&D. 
A)  to stress constant innovation to stay ahead of imitative rivals and to concentrate on a few differentiating features. 
B)  to charge a premium price that more than covers the extra costs of differentiating features and to convince customers to be brand loyal. 
C)  to out-innovate and out-advertise rivals. 
D)  to emphasize personalized customer service and to add as many differentiating features as possible. 
E)  to keep prices close to the average of all rivals and to spend heavily on new product R&D.

Question 5

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 that 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 that 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 6

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)  most usually is the result of highly effective marketing and advertising. 
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 biggest price premium in the industry. 
E)  often hinges on incorporating features that (1) raise the performance of the product or (2) lower the buyer's overall costs of using the company's product or (3) enhance buyer satisfaction in intangible or non-economic ways or delivering value to customers on 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)  most usually is the result of highly effective marketing and advertising. 
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 biggest price premium in the industry. 
E)  often hinges on incorporating features that (1) raise the performance of the product or (2) lower the buyer's overall costs of using the company's product or (3) enhance buyer satisfaction in intangible or non-economic ways or delivering value to customers on by differentiating on the basis of competencies and capabilities that rivals can't match.

Question 7

The chief difference between a broad differentiation strategy and a focused differentiation is

Accepted Answer

A)  the size of the buyer group that a company is trying to appeal to. 
B)  the degree of bargaining power that buyers have. 
C)  whether the product is strongly differentiated or weakly differentiated from rivals. 
D)  the type of value chain being used to achieve a differentiation-based competitive advantage. 
E)  the number of upscale attributes incorporated into the product offering. 
A)  the size of the buyer group that a company is trying to appeal to. 
B)  the degree of bargaining power that buyers have. 
C)  whether the product is strongly differentiated or weakly differentiated from rivals. 
D)  the type of value chain being used to achieve a differentiation-based competitive advantage. 
E)  the number of upscale attributes incorporated into the product offering.

Question 8

A low-cost leader's basis for competitive advantage is

Accepted Answer

A)  lower prices than rival firms. 
B)  using a low cost/low price approach to gain the biggest market share. 
C)  high buyer switching costs. 
D)  meaningfully lower overall costs than competitors. 
E)  higher unit sales than rivals. 
A)  lower prices than rival firms. 
B)  using a low cost/low price approach to gain the biggest market share. 
C)  high buyer switching costs. 
D)  meaningfully lower overall costs than competitors. 
E)  higher unit sales than rivals.

Question 9

A focused differentiation strategy aims at securing competitive advantage

Accepted Answer

A)  by providing niche members with a top-of-the-line product at a premium price. 
B)  by catering to buyers looking for an upscale product at an attractively low price. 
C)  with a product offering carefully designed to appeal to the unique preferences and needs of a narrow, well-defined group of buyers. 
D)  by developing product attributes that no other company in the industry has. 
E)  by convincing a narrow, well-defined group of buyers that the company has a true world class product. 
A)  by providing niche members with a top-of-the-line product at a premium price. 
B)  by catering to buyers looking for an upscale product at an attractively low price. 
C)  with a product offering carefully designed to appeal to the unique preferences and needs of a narrow, well-defined group of buyers. 
D)  by developing product attributes that no other company in the industry has. 
E)  by convincing a narrow, well-defined group of buyers that the company has a true world class product.

Question 10

The pitfalls of a differentiation strategy include

Accepted Answer

A)  trying to differentiate on the basis of attributes or features that are easily copied. 
B)  choosing to differentiate on the basis of attributes that buyers do not perceive as valuable or worth paying for. 
C)  trying to charge too high a price premium for the differentiating features. 
D)  being timid and not striving to open up meaningful gaps in quality or performance or service or other attractive differentiating attributes. 
E)  All of these. 
A)  trying to differentiate on the basis of attributes or features that are easily copied. 
B)  choosing to differentiate on the basis of attributes that buyers do not perceive as valuable or worth paying for. 
C)  trying to charge too high a price premium for the differentiating features. 
D)  being timid and not striving to open up meaningful gaps in quality or performance or service or other attractive differentiating attributes. 
E)  All of these.

Question 11

A competitive strategy predicated on low-cost leadership tends to work best when

Accepted Answer

A)  there are widely varying needs and preferences among the various buyers of the product or service. 
B)  there are many market segments and market niches, such that it is feasible for a low-cost leader to dominate the niche where buyers want a budget-priced product. 
C)  price competition is especially vigorous and the offerings of rival firms are essentially identical, standardized, commodity-like products. 
D)  buyers prefer that the products/services of competing sellers have widely varying attributes and prices. 
E)  buyers have high switching costs and there is considerable diversity in how buyers use the product. 
A)  there are widely varying needs and preferences among the various buyers of the product or service. 
B)  there are many market segments and market niches, such that it is feasible for a low-cost leader to dominate the niche where buyers want a budget-priced product. 
C)  price competition is especially vigorous and the offerings of rival firms are essentially identical, standardized, commodity-like products. 
D)  buyers prefer that the products/services of competing sellers have widely varying attributes and prices. 
E)  buyers have high switching costs and there is considerable diversity in how buyers use the product.

Question 12

What are the distinctive features of a focused low-cost strategy? How does it differ from a low-cost leadership strategy?

Accepted Answer

The answer of What are the distinctive features of a...

Question 13

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 14

Whether a broad differentiation strategy ends up enhancing company 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)  the extra price the product commands exceeds the added 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 having 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)  the extra price the product commands exceeds the added 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 having the best price.

Question 15

Broad differentiation strategies generally work best in market circumstances where

Accepted Answer

A)  buyer needs and preferences are too diverse to be fully satisfied by a standardized product. 
B)  most buyers have similar needs and use the product in the same ways. 
C)  the products of rivals are weakly differentiated and most competitors are resorting to clever advertising to try to set their product offerings apart. 
D)  buyers are price sensitive and buying switching costs are quite low. 
E)  the five competitive forces are strong. 
A)  buyer needs and preferences are too diverse to be fully satisfied by a standardized product. 
B)  most buyers have similar needs and use the product in the same ways. 
C)  the products of rivals are weakly differentiated and most competitors are resorting to clever advertising to try to set their product offerings apart. 
D)  buyers are price sensitive and buying switching costs are quite low. 
E)  the five competitive forces are strong.

Question 16

An example of how companies can revamp their value chain to reduce costs is

Accepted Answer

A)  to increase service availability while reducing staffing requirements. 
B)  to continue to utilize traditional methods of distribution and sales. 
C)  to not make any changes in product manufacturing but change end distribution methods. 
D)  to increase extra services to increase staffing requirements. 
E)  All of these. 
A)  to increase service availability while reducing staffing requirements. 
B)  to continue to utilize traditional methods of distribution and sales. 
C)  to not make any changes in product manufacturing but change end distribution methods. 
D)  to increase extra services to increase staffing requirements. 
E)  All of these.

Question 17

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 attributes at lower costs than rivals whose products have similar upscale attributes. 
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 attributes at lower costs than rivals whose products have similar upscale attributes. 
D)  a distinctive competence in delivering top-notch quality and customer service. 
E)  a distinctive competence in supply chain management.

Question 18

Achieving a 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)  performing value chain activities more cost-effectively than rivals and finding ways to eliminate or bypass some cost-producing activities altogether. 
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)  performing value chain activities more cost-effectively than rivals and finding ways to eliminate or bypass some cost-producing activities altogether. 
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

Opportunities to differentiate a company's product offering

Accepted Answer

A)  are most reliably found in the R&D portion of the value chain. 
B)  are typically located in the sales and marketing portion of the value chain. 
C)  can exist in activities all along an industry's value chain. 
D)  usually are tied to product quality and customer service. 
E)  are most frequently attached to a company's manufacturing expertise and to its ability to achieve scale economies in production. 
A)  are most reliably found in the R&D portion of the value chain. 
B)  are typically located in the sales and marketing portion of the value chain. 
C)  can exist in activities all along an industry's value chain. 
D)  usually are tied to product quality and customer service. 
E)  are most frequently attached to a company's manufacturing expertise and to its ability to achieve scale economies in production.

Question 20

A company's strategy is likely to succeed if

Accepted Answer

A)  it is predicated on leveraging a competitively valuable collection of resources and capabilities that match the strategy. 
B)  the company has the resources and capabilities needed to keep its costs competitive. 
C)  it has the expertise to cost-effectively manage value chain activities over rivals. 
D)  it has the innovative capabilities to bypass certain value chain activities of rivals. 
E)  All of these. 
A)  it is predicated on leveraging a competitively valuable collection of resources and capabilities that match the strategy. 
B)  the company has the resources and capabilities needed to keep its costs competitive. 
C)  it has the expertise to cost-effectively manage value chain activities over rivals. 
D)  it has the innovative capabilities to bypass certain value chain activities of rivals. 
E)  All of these.

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

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

A broad differentiation strategy works best in situations where

The keys to sustaining a broad differentiation strategy are

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

A differentiation-based competitive advantage

The chief difference between a broad differentiation strategy and a focused differentiation is

A low-cost leader's basis for competitive advantage is

A focused differentiation strategy aims at securing competitive advantage

The pitfalls of a differentiation strategy include

A competitive strategy predicated on low-cost leadership tends to work best when

What are the distinctive features of a focused low-cost strategy? How does it differ from a low-cost leadership strategy?

The target market of a best-cost provider is

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

Broad differentiation strategies generally work best in market circumstances where

An example of how companies can revamp their value chain to reduce costs is

The competitive advantage of a best-cost provider is

Achieving a cost advantage over rivals entails

Opportunities to differentiate a company's product offering

A company's strategy is likely to succeed if

What Is Strategy and Why Is It Important

Charting a Companys Direction: Vision and Mission, Objectives, and Strategy

Evaluating a Companys External Environment

Evaluating a Companys Resources, Capabilities, and Competitiveness

Strengthening a Companys Competitive Position: Strategic Moves, timing, and Scope of Operation

Strategies for Competing in International Markets

Corporate Strategy: Diversification and the Multibusiness Company

Ethics, Corporate Social Responsibility, Environmental Sustainability, and Strategy

Building an Organization Capable of Good Strategy Execution: People, Capabilities, and Structure

Managing Internal Operations: Actions That Promote Good Strategy Execution

Corporate Culture and Leadership: Keys to Good Strategy Execution

Filters

Exam 5: The Five Generic Competitive Strategies: Which One to Employ

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

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

A broad differentiation strategy works best in situations where

The keys to sustaining a broad differentiation strategy are

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

A differentiation-based competitive advantage

The chief difference between a broad differentiation strategy and a focused differentiation is

A low-cost leader's basis for competitive advantage is

A focused differentiation strategy aims at securing competitive advantage

The pitfalls of a differentiation strategy include

A competitive strategy predicated on low-cost leadership tends to work best when

What are the distinctive features of a focused low-cost strategy? How does it differ from a low-cost leadership strategy?

The target market of a best-cost provider is

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

Broad differentiation strategies generally work best in market circumstances where

An example of how companies can revamp their value chain to reduce costs is

The competitive advantage of a best-cost provider is

Achieving a cost advantage over rivals entails

Opportunities to differentiate a company's product offering

A company's strategy is likely to succeed if

What Is Strategy and Why Is It Important

Charting a Companys Direction: Vision and Mission, Objectives, and Strategy

Evaluating a Companys External Environment

Evaluating a Companys Resources, Capabilities, and Competitiveness

Strengthening a Companys Competitive Position: Strategic Moves, timing, and Scope of Operation

Strategies for Competing in International Markets

Corporate Strategy: Diversification and the Multibusiness Company

Ethics, Corporate Social Responsibility, Environmental Sustainability, and Strategy

Building an Organization Capable of Good Strategy Execution: People, Capabilities, and Structure

Managing Internal Operations: Actions That Promote Good Strategy Execution

Corporate Culture and Leadership: Keys to Good Strategy Execution

Filters