Exam 5: Creating Business Strategies

Frequent-flier programs create switching costs for the buyer.

All of the following are production costs except ________.

During the industry's growth phase, differentiators will increase their efforts toward differentiation.

A low cost leader is a firm that competes by achieving lower margins due to a higher cost basis than rivals.

Low-cost leadership creates a unique product that causes customers to be willing to pay premium prices.

Learning and economies of scope are both drivers of the differentiation strategic position.

The strategy-diamond and VRINE are not strategy formulation tools.

To influence consumer decisions, advertising must first reach a certain threshold at which it creates awareness.

Why would a firm with innovative capabilities generally choose the differentiation approach?

Customization and convenient access are both drivers of the low-cost strategic position.

Often a new market entrant, who wants to compete with incumbents' costs, introduces a ________.

Total average cost can be represented on a graph by ________.

Porter's generic strategies may also be called strategic positions.

The cost of differentiation has ________.

The generic strategy model helps decision makers determine how best to motivate customers to choose their products over those of competitors.

Marginal cost is the cost of ________.

What is the definition of generic strategy?

According to Porter, what are the two ways that a firm can gain a significant advantage over rival competitors?

Discuss the growth stage of the industry life cycle, and its impact on strategy.

To successfully pursue the integrated position, managers must make tradeoffs for one position over another.