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

Achieving a differentiation means making your offering unique in a way that makes it more valuable to customers,irrespective of the costs of creating that differentiation.

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.

Kim and Mauborgne's "strategy canvas" is a tool for identifying novel recombinations of product attributes.

"Experience goods" are those which:

If the prices of securities fully reflect all the information available,then passive investors are best advised to invest in index-based mutual funds (unit trusts)with the lowest administration costs.

The cost reductions that firms derive from moving down their experience curves are mainly the result of learning which increases the productivity of labor.

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

Isolating mechanisms are:

Causal ambiguity is a type of isolating mechanism.

According to Porter,cost leadership and differentiation are:

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.

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

The principal distinction between segmentation and differentiation is that segmentation is a strategic choice by a firm while differentiation is a feature of market structure.

Compared with simple products like flour or toilet paper,complex products such as cars or hotels:

In order to discover a "blue ocean" of uncontested market space,a firm must use technological innovation to create a new product market

The usefulness of the strategy canvas in developing blue ocean strategies rests on its ability to:

The examples of Ikea and Southwest Airlines demonstrate:

The main challenge of business model innovations is conceiving of novel business models,not implementing them.

Cost and differentiation strategies are similar in terms of their potential to confer sustainable competitive advantage.

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