Exam 5: Building Competitive Advantage Through Business-Level Strategy

When a company recognizes that the needs of one market segment is not the same as another and accordingly customizes its product offerings, it is said to be pursuing:

Cool Looks produces a variety of clothing for various customer groups.Which of the following strategies is the finn most likely pursuing?

A company that follows the strategy customizes its offering to a particular niche in order to outsell its rivals.

Describe how business-level strategies give a company a competitive advantage over actual and potential rivals.

Lilly's Beauty Company sells haircare products such as shampoo, conditioner, and hairspray.The company does not sell new or customized products in order to meet the specific needs of certain groups of people.Which of the following approaches is illustrated in this scenario?

When a company already has a low-cost structure, it has to give up a lot of differentiation in its product offering to get additional cost reductions.

A generic business-level strategy is a strategy that gives a company a specific form of competitive position and advantage over its rivals that results in above-average profitability.

When a company decides to serve a limited number of segments, or just one segment, it is pursuing a segmentation strategy.

Differentiation allows a company to:

Companies with a differentiation advantage tend to charge a lower price for their prodncts.

A low-cost company is often best positioned to survive price rivalry in its industry.

Compared to a differentiator, the company that follows a low-cost strategy has the advantage of:

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

When a company targets a certain segment or niche, and tries to be the low-cost player in that niche, it is pursuing a broad low-cost strategy.