Exam 5: Creating Business Strategies

When a firm competes as a differentiator, it becomes a competitor that hopes to achieve ________.

Increased size ensures economies of scale.

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

Differentiating on a feature that buyers don't care about increases costs without increasing willingness to pay.

Michael Porter's model is based on the principles of industrial organization economics.

Large-scale operations lead to greater flexibility and reduced costs.

The intent to offer a differentiated product generally results in competitive advantage and above-average profitability.

What is the difference between economies of scale and the learning curve?

In testing the quality of a firm's strategy, it is important to understand the profit potential of both the firm's current position and the position toward which the strategy is taking the firm.

What is willingness to pay and how does it impact strategic positioning?

A firm's choice of position depends on two important factors, which are ________.

All of the following are generic strategies except ________.

When the vision of a firm, its strategy, and the industry conditions are not aligned, the lack of coherence almost always causes the firm to ________.

Michael Porter's generic strategy model is useful to help select a ________.

A strategic position that enables a firm to produce a good while maintaining total costs that are lower than its competitors is called ________.

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

Mature industries often undergo consolidation.

Business strategy refers to the choices that a firm makes about its competitive posture.

Differentiation involves all of the following except ________.

A real threat to an intended low-cost position is the failure to offer an acceptable combination of price and ________.