Exam 7: A : The Sources and Dimensions of Competitive Advantage

What is the difference between differentiation and segmentation?

In supplying "lifestyle" products which are designed to meet consumers' social and psychological needs,the key to differentiation advantage is:

The main strategy implication of the Boston Consulting Group's analysis of experience curves was that firms should avoid cutting prices in order to expand market share.

Firms pursuing differentiation advantages will implement their strategies differently from those pursuing cost advantage.The implementation of differentiation strategy is likely to feature:

Most business model innovation involves novel approaches to creating and/or capturing value within an industry.

Business Process Reengineering that starts with a "clean sheet of paper" runs the risk of destroying some valuable organizational capabilities which have taken many years to build

Conceiving of innovative business models typically involves:

The potential for spreading fixed costs over a greater volume of output means that unit cost continues to decline even after full capacity utilization has been reached.

There are two primary sources of competitive advantage: cost advantage and differentiation advantage.

Tangible differentiation comprises observable product features such as shape,color,size,and style;it does not include performance dimensions such of the product - for instance its reliability and durability.

The predominance of large companies in most manufacturing industries is mainly the result of economies of scale.

Complementarity between a firm's management practices means that:

Of the two sources of superior profitability,industry attractiveness and competitive advantage within an industry,the latter is more important.

A basic principle of Business Process Reengineering is that dramatic improvements in cost efficiency are better achieved through incremental improvements rather than fundamental redesign.

To understand customer' willingness to pay for differentiation,it is important to know what motivates customers,and the criteria they apply when choosing among competing products.

The examples of Ikea and Southwest Airlines demonstrate:

Most of the innovative business models deployed by e-commerce firms:

Causal ambiguity-difficulties over diagnosing the sources of a rival's compeititve advantage-creates uncertain imitability-uncertainty over the ability to replicate that competitive advantage.

Achieving productivity gains from process innovation usually requires that new production processes are matched by other management changes-including changes in human resource management.

Designing a differentiation strategy requires understanding every possible interaction between a firm and its customers