Question 1

The principal dangers of a cost leadership approach include all of the following except

Accepted Answer

A)  powerful buyers. 
B)  technological change. 
C)  imitation of production techniques. 
D)  changes in consumer tastes. 
E)  rivals lowering their costs. 
A)  powerful buyers. 
B)  technological change. 
C)  imitation of production techniques. 
D)  changes in consumer tastes. 
E)  rivals lowering their costs.

Question 2

All focus strategies entail serving a specific market segment using a differentiation approach.

Accepted Answer

A) True 
 B)False

Question 3

In which of the following situations does a differentiation strategy make the most sense?

Accepted Answer

A)  The industry is fragmented into different customer groups, each of which has different needs. 
B)  Customer needs are primarily satisfied by the price of the product. 
C)  There is a lot of technological change. 
D)  There are low barriers to entry and exit. 
E)  The industry is in the maturity stage of the life cycle. 
A)  The industry is fragmented into different customer groups, each of which has different needs. 
B)  Customer needs are primarily satisfied by the price of the product. 
C)  There is a lot of technological change. 
D)  There are low barriers to entry and exit. 
E)  The industry is in the maturity stage of the life cycle.

Question 4

Clothing companies Aeropostale and Forever 21 compete for the same group of customers which consists of females aged 18-24.These two companies would be part of different strategic groups because they use different marketing strategies to reach their customers.

Accepted Answer

A) True 
 B)False

Question 5

A cost leader could reasonably be expected to reduce costs by developing distinctive competencies in all but

Accepted Answer

A)  manufacturing. 
B)  materials management. 
C)  marketing and sales. 
D)  information technology. 
E)  learning organizational structure. 
A)  manufacturing. 
B)  materials management. 
C)  marketing and sales. 
D)  information technology. 
E)  learning organizational structure.

Question 6

Which of the following is not a generic competitive strategy?

Accepted Answer

A)  Cost leadership 
B)  Differentiation 
C)  Focused cost leadership 
D)  Focused differentiation 
E)  Innovation 
A)  Cost leadership 
B)  Differentiation 
C)  Focused cost leadership 
D)  Focused differentiation 
E)  Innovation

Question 7

Maximizing the profitability of a company's business model is about making the right choices with regard to value creation through differentiation,costs,and pricing given both the demand conditions in the company's market and the competitive conditions in the company's industry.

Accepted Answer

A) True 
 B)False

Question 8

The most expensive competitive strategy to pursue is

Accepted Answer

A)  differentiation. 
B)  cost leadership. 
C)  focus. 
D)  growth. 
E)  hypercompetition. 
A)  differentiation. 
B)  cost leadership. 
C)  focus. 
D)  growth. 
E)  hypercompetition.

Question 9

Cost leadership is most appropriate when

Accepted Answer

A)  the power of buyers is low and barriers to entry are high. 
B)  economies of scale are relatively unimportant in manufacturing products. 
C)  customers have very different needs and uses for the industry's products. 
D)  product innovation is the key competitive factor. 
E)  industry rivalry is high and customers are very sensitive to prices. 
A)  the power of buyers is low and barriers to entry are high. 
B)  economies of scale are relatively unimportant in manufacturing products. 
C)  customers have very different needs and uses for the industry's products. 
D)  product innovation is the key competitive factor. 
E)  industry rivalry is high and customers are very sensitive to prices.

Question 10

A producer of commodity steel should pursue which of the following generic competitive strategies?

Accepted Answer

A)  Growth 
B)  Differentiation 
C)  Focus 
D)  Cost leadership 
E)  Profit 
A)  Growth 
B)  Differentiation 
C)  Focus 
D)  Cost leadership 
E)  Profit

Question 11

What does the broad differentiation business model look like and how can this model benefit companies that employ it?

Accepted Answer

Broad differentiation is a business mode

Question 12

Which of the following statements is true?

Accepted Answer

A)  Differentiation and cost structure decisions affect one another. 
B)  Differentiation and cost structure decisions do not affect one another. 
C)  Differentiation and cost structure decisions have little effect on a company's profitability. 
D)  Differentiation decisions do not affect a company's profitability. 
E)  Cost structure decisions do not affect a company's profitability. 
A)  Differentiation and cost structure decisions affect one another. 
B)  Differentiation and cost structure decisions do not affect one another. 
C)  Differentiation and cost structure decisions have little effect on a company's profitability. 
D)  Differentiation decisions do not affect a company's profitability. 
E)  Cost structure decisions do not affect a company's profitability.

Question 13

A product's appeal to customers' psychological desires cannot be considered a source of differentiation.

Accepted Answer

A) True 
 B)False

Question 14

At The Luxury Hotel in Miami,Florida,three hotel employees serve the needs of each guest.In every room,a guest can summon a chef,a maid,or a valet by pressing a button at bedside.Which generic business-level strategy is The Luxury Hotel utilizing?

Accepted Answer

A)  Cost leadership 
B)  Differentiation 
C)  Focus 
D)  Strategic group 
E)  Brand loyalty 
A)  Cost leadership 
B)  Differentiation 
C)  Focus 
D)  Strategic group 
E)  Brand loyalty

Question 15

A disadvantage of pursuing a cost leadership strategy is that

Accepted Answer

A)  technological change can make production methods obsolete. 
B)  price wars make it hard to compete with differentiators. 
C)  it costs more than a differentiation strategy because of the necessity of high capital investments. 
D)  powerful buyers are a major threat. 
E)  no quality control exists. 
A)  technological change can make production methods obsolete. 
B)  price wars make it hard to compete with differentiators. 
C)  it costs more than a differentiation strategy because of the necessity of high capital investments. 
D)  powerful buyers are a major threat. 
E)  no quality control exists.

Question 16

A large company produces a variety of clothing for different customer groups.This firm is pursuing which of the following strategies?

Accepted Answer

A)  Cost leadership 
B)  Differentiation 
C)  Both cost and differentiation 
D)  Focus 
E)  Share building 
A)  Cost leadership 
B)  Differentiation 
C)  Both cost and differentiation 
D)  Focus 
E)  Share building

Question 17

Apple,Amazon.com,and eBay have used the Internet as a way to become broad differentiators.

Accepted Answer

A) True 
 B)False

Question 18

Info Tech,Inc.makes complex telecommunications products,such as cellular telephones.Because this company has a distinctive competency in research and development,it should try to differentiate its product through

Accepted Answer

A)  reliability. 
B)  innovation. 
C)  advertising. 
D)  service. 
E)  low price. 
A)  reliability. 
B)  innovation. 
C)  advertising. 
D)  service. 
E)  low price.

Question 19

The three generic business-level strategies are cost leadership,differentiation,and mass marketing.

Accepted Answer

A) True 
 B)False

Question 20

When a company services the broad market and has a low degree of product differentiation,it is most likely

Accepted Answer

A)  pursuing a cost-leadership strategy. 
B)  pursuing a differentiation strategy. 
C)  pursuing a focus strategy. 
D)  stuck in the middle. 
E)  pursuing both cost leadership and differentiation. 
A)  pursuing a cost-leadership strategy. 
B)  pursuing a differentiation strategy. 
C)  pursuing a focus strategy. 
D)  stuck in the middle. 
E)  pursuing both cost leadership and differentiation.

The principal dangers of a cost leadership approach include all of the following except

All focus strategies entail serving a specific market segment using a differentiation approach.

In which of the following situations does a differentiation strategy make the most sense?

Clothing companies Aeropostale and Forever 21 compete for the same group of customers which consists of females aged 18-24.These two companies would be part of different strategic groups because they use different marketing strategies to reach their customers.

A cost leader could reasonably be expected to reduce costs by developing distinctive competencies in all but

Which of the following is not a generic competitive strategy?

Maximizing the profitability of a company's business model is about making the right choices with regard to value creation through differentiation,costs,and pricing given both the demand conditions in the company's market and the competitive conditions in the company's industry.

The most expensive competitive strategy to pursue is

Cost leadership is most appropriate when

A producer of commodity steel should pursue which of the following generic competitive strategies?

What does the broad differentiation business model look like and how can this model benefit companies that employ it?

Which of the following statements is true?

A product's appeal to customers' psychological desires cannot be considered a source of differentiation.

At The Luxury Hotel in Miami,Florida,three hotel employees serve the needs of each guest.In every room,a guest can summon a chef,a maid,or a valet by pressing a button at bedside.Which generic business-level strategy is The Luxury Hotel utilizing?

A disadvantage of pursuing a cost leadership strategy is that

A large company produces a variety of clothing for different customer groups.This firm is pursuing which of the following strategies?

Apple,Amazon.com,and eBay have used the Internet as a way to become broad differentiators.

Info Tech,Inc.makes complex telecommunications products,such as cellular telephones.Because this company has a distinctive competency in research and development,it should try to differentiate its product through

The three generic business-level strategies are cost leadership,differentiation,and mass marketing.

When a company services the broad market and has a low degree of product differentiation,it is most likely

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Distinctive Competencies, Competitive Advantage, and Profitability

Building Competitive Advantage Through Functional-Level Strategy

Business-Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate-Level Strategy: Related and Unrelated Diversification

Corporate Performance, Governance, and Business Ethics

Implementing Strategy in Companies That Compete in a Single Industry

Implementing Strategy in Companies That Compete Across Industries and Countries

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Exam 5: Building Competitive Advantage Through Business-Level Strategy

The principal dangers of a cost leadership approach include all of the following except

All focus strategies entail serving a specific market segment using a differentiation approach.

In which of the following situations does a differentiation strategy make the most sense?

Clothing companies Aeropostale and Forever 21 compete for the same group of customers which consists of females aged 18-24.These two companies would be part of different strategic groups because they use different marketing strategies to reach their customers.

A cost leader could reasonably be expected to reduce costs by developing distinctive competencies in all but

Which of the following is not a generic competitive strategy?

Maximizing the profitability of a company's business model is about making the right choices with regard to value creation through differentiation,costs,and pricing given both the demand conditions in the company's market and the competitive conditions in the company's industry.

The most expensive competitive strategy to pursue is

Cost leadership is most appropriate when

A producer of commodity steel should pursue which of the following generic competitive strategies?

What does the broad differentiation business model look like and how can this model benefit companies that employ it?

Which of the following statements is true?

A product's appeal to customers' psychological desires cannot be considered a source of differentiation.

At The Luxury Hotel in Miami,Florida,three hotel employees serve the needs of each guest.In every room,a guest can summon a chef,a maid,or a valet by pressing a button at bedside.Which generic business-level strategy is The Luxury Hotel utilizing?

A disadvantage of pursuing a cost leadership strategy is that

A large company produces a variety of clothing for different customer groups.This firm is pursuing which of the following strategies?

Apple,Amazon.com,and eBay have used the Internet as a way to become broad differentiators.

Info Tech,Inc.makes complex telecommunications products,such as cellular telephones.Because this company has a distinctive competency in research and development,it should try to differentiate its product through

The three generic business-level strategies are cost leadership,differentiation,and mass marketing.

When a company services the broad market and has a low degree of product differentiation,it is most likely

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Distinctive Competencies, Competitive Advantage, and Profitability

Building Competitive Advantage Through Functional-Level Strategy

Business-Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate-Level Strategy: Related and Unrelated Diversification

Corporate Performance, Governance, and Business Ethics

Implementing Strategy in Companies That Compete in a Single Industry

Implementing Strategy in Companies That Compete Across Industries and Countries

Filters