Exam 5: Creating Business Strategies

Jet Blue is an airline company that serves a small subset of commercial travelers who are price sensitive. This company is pursuing a ________ strategic approach.

During the industry's maturity phase, companies will choose the global or diversified arena.

Enforcing codes of ethical conduct for suppliers can increase costs.

During the ________ stage of the industry life cycle, many firms consider the strategy of exiting the industry.

Costs may decline at some ranges of production but increase at others.

The concept of strategic positioning is useful in dealing with issues derived from the ________.

Define low-cost leadership.

According to Porter, if a company is targeting a broad strategic market, it must choose either ________ or ________.

Marginal cost is the mean cost of total production during a given period.

Under the industry-structure model, the key force around which all others revolve in an industry is ________.

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

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

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

Capabilities in large-scale manufacturing and distribution generally favor low-cost strategies.

Premium prices for otherwise similar products are paid when a firm is able to uniquely satisfy a customer's needs along the dimensions of all but which of the following?

Firms that take a differentiation position try to satisfy basic rather than highly specialized customer needs.

What is the differentiation approach?

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

Successful differentiation enables firms to set prices at the industry average and gain market share.

A frequent flyer program is an example of a barrier to customer mobility.