Question 1

Identify cost drivers in a company's value chain.Explain how these drivers impact a firm's generic strategy.

Accepted Answer

Answer may vary

Question 2

The advantages of focusing a company's entire competitive effort on a single market niche allows for

Accepted Answer

A)  going after a national customer base with a "something for everyone" lineup of models. 
B)  scaling operations to serve the customer market segment. 
C)  utilizing the full depth of the company's resources across a broad base of customers. 
D)  executing competencies and capabilities better than competitors. 
E)  All of these. 
A)  going after a national customer base with a "something for everyone" lineup of models. 
B)  scaling operations to serve the customer market segment. 
C)  utilizing the full depth of the company's resources across a broad base of customers. 
D)  executing competencies and capabilities better than competitors. 
E)  All of these. B

Question 3

In which of the following circumstances is a strategy to be the industry's overall low-cost provider not particularly well matched to the market situation?

Accepted Answer

A)  When the offerings of rival firms are essentially identical,standardized,commodity-like products 
B)  When there are few ways to achieve differentiation that have value to buyers 
C)  When price competition is especially vigorous 
D)  When buyers have widely varying needs and special requirements and when the cost of switching purchases from one seller to another are relatively high 
E)  When industry newcomers use introductory prices to build a customer base 
A)  When the offerings of rival firms are essentially identical,standardized,commodity-like products 
B)  When there are few ways to achieve differentiation that have value to buyers 
C)  When price competition is especially vigorous 
D)  When buyers have widely varying needs and special requirements and when the cost of switching purchases from one seller to another are relatively high 
E)  When industry newcomers use introductory prices to build a customer base D

Question 4

The big danger or risk of an unsound best-cost provider strategy is

Accepted Answer

A)  that buyers will be highly skeptical about paying a relatively low price for upscale attributes/features. 
B)  not establishing strong alliances and partnerships with key suppliers. 
C)  that low-cost leaders will be able to steal away some customers on the basis of a lower price and high-end differentiators will be able to steal away customers with the appeal of better product attributes. 
D)  that it will be unable to achieve top-notch quality at a rock-bottom cost. 
E)  becoming too highly integrated and not relying enough on outsourcing. 
A)  that buyers will be highly skeptical about paying a relatively low price for upscale attributes/features. 
B)  not establishing strong alliances and partnerships with key suppliers. 
C)  that low-cost leaders will be able to steal away some customers on the basis of a lower price and high-end differentiators will be able to steal away customers with the appeal of better product attributes. 
D)  that it will be unable to achieve top-notch quality at a rock-bottom cost. 
E)  becoming too highly integrated and not relying enough on outsourcing.

Question 5

Successful differentiation allows a firm to

Accepted Answer

A)  command the largest market share in the industry. 
B)  set the industry ceiling on price. 
C)  avoid being overly concerned about whether entry barriers into the industry are high or low. 
D)  command a premium price for its product and/or increase unit sales and/or gain buyer loyalty to its brand. 
E)  take sales and market share away from rivals by undercutting them on price. 
A)  command the largest market share in the industry. 
B)  set the industry ceiling on price. 
C)  avoid being overly concerned about whether entry barriers into the industry are high or low. 
D)  command a premium price for its product and/or increase unit sales and/or gain buyer loyalty to its brand. 
E)  take sales and market share away from rivals by undercutting them on price.

Question 6

Which of the following is not an action that a company can take to do a better job than rivals of performing value chain activities more cost-effectively?

Accepted Answer

A)  Striving to capture all available economies of scale 
B)  Trying to operate facilities at full capacity 
C)  Taking full advantage of experience and learning curve effects 
D)  Improving supply chain efficiency 
E)  Redesigning products to eliminate features that might have market appeal,but excessively increase production costs 
A)  Striving to capture all available economies of scale 
B)  Trying to operate facilities at full capacity 
C)  Taking full advantage of experience and learning curve effects 
D)  Improving supply chain efficiency 
E)  Redesigning products to eliminate features that might have market appeal,but excessively increase production costs

Question 7

The objective of competitive strategy is to

Accepted Answer

A)  provide detail to the company's business model. 
B)  build competitive advantage in the marketplace by giving buyers superior value relative to the offerings of rival sellers. 
C)  get the company into the best strategic group and then dominate it. 
D)  establish a competitively powerful value chain. 
E)  grow revenues at a faster annual rate than rivals are able to grow their revenues. 
A)  provide detail to the company's business model. 
B)  build competitive advantage in the marketplace by giving buyers superior value relative to the offerings of rival sellers. 
C)  get the company into the best strategic group and then dominate it. 
D)  establish a competitively powerful value chain. 
E)  grow revenues at a faster annual rate than rivals are able to grow their revenues.

Question 8

A competitive strategy of striving to be the low-cost provider is particularly attractive when

Accepted Answer

A)  buyers are not price sensitive. 
B)  the industry is made up of a large number or equal-sized rivals. 
C)  there are many ways to achieve product differentiation that have value to buyers. 
D)  price competition is especially vigorous,buyers have low switching costs,and the majority of industry sales are made to a few,large volume buyers. 
E)  switching costs are high,price competition is strong,and buyers tend to use the industry's products in many different ways. 
A)  buyers are not price sensitive. 
B)  the industry is made up of a large number or equal-sized rivals. 
C)  there are many ways to achieve product differentiation that have value to buyers. 
D)  price competition is especially vigorous,buyers have low switching costs,and the majority of industry sales are made to a few,large volume buyers. 
E)  switching costs are high,price competition is strong,and buyers tend to use the industry's products in many different ways.

Question 9

A focused low-cost strategy seeks to achieve competitive advantage by

Accepted Answer

A)  outmatching competitors in offering niche members an absolute rock-bottom price. 
B)  delivering more value for the money than other competitors. 
C)  performing the primary value chain activities at a lower cost per unit than can the industry's low-cost leaders. 
D)  dominating more market niches in the industry via a lower cost and a lower price than any other rival. 
E)  serving buyers in the target market niche at a lower cost and lower price than rivals. 
A)  outmatching competitors in offering niche members an absolute rock-bottom price. 
B)  delivering more value for the money than other competitors. 
C)  performing the primary value chain activities at a lower cost per unit than can the industry's low-cost leaders. 
D)  dominating more market niches in the industry via a lower cost and a lower price than any other rival. 
E)  serving buyers in the target market niche at a lower cost and lower price than rivals.

Question 10

What are the distinctive features of a focused differentiation strategy? How is it different from a broad differentiation strategy?

Accepted Answer

The answer of What are the distinctive features of a...

Question 11

The major avenues for achieving a cost advantage over rivals include

Accepted Answer

A)  eliminating or curbing nonessential cost-producing activities and performing essential value chain activities more cost-effectively that rivals. 
B)  having a management team that accepts below-market salaries. 
C)  being a first mover in adopting the latest state-of-the-art technologies,especially those relating to low-cost manufacture. 
D)  outsourcing high-cost activities to offshore vendors. 
E)  paying lower wages to hourly workers than what rivals are paying workers. 
A)  eliminating or curbing nonessential cost-producing activities and performing essential value chain activities more cost-effectively that rivals. 
B)  having a management team that accepts below-market salaries. 
C)  being a first mover in adopting the latest state-of-the-art technologies,especially those relating to low-cost manufacture. 
D)  outsourcing high-cost activities to offshore vendors. 
E)  paying lower wages to hourly workers than what rivals are paying workers.

Question 12

Opportunities to differentiate a company's product offering

Accepted Answer

A)  are always dependent on the capabilities of the company's R&D staff. 
B)  are more likely to be captured by highly skilled marketers. 
C)  can exist in supply chain activities,R&D,manufacturing activities,distribution and shipping,or marketing,sales,and customer service. 
D)  usually are tied to product quality and durability and product reliability and proliferation. 
E)  are most frequently attached to a product's brand image,performance,and reliability. 
A)  are always dependent on the capabilities of the company's R&D staff. 
B)  are more likely to be captured by highly skilled marketers. 
C)  can exist in supply chain activities,R&D,manufacturing activities,distribution and shipping,or marketing,sales,and customer service. 
D)  usually are tied to product quality and durability and product reliability and proliferation. 
E)  are most frequently attached to a product's brand image,performance,and reliability.

Question 13

A firm pursuing a best-cost provider strategy

Accepted Answer

A)  seeks to be the low-cost provider in the largest and fastest-growing (or best)market segment. 
B)  tries to have the best cost (as compared to rivals)for each activity in the industry's value chain. 
C)  tries to outcompete a low-cost provider by attracting buyers on the basis of charging the best price. 
D)  seeks to deliver superior value to buyers by satisfying their expectations on key quality/service/features/performance attributes and beating their expectations on price (given what rivals are charging for much the same attributes). 
E)  seeks to achieve the best costs by using the best operating practices and incorporating the best features and attributes. 
A)  seeks to be the low-cost provider in the largest and fastest-growing (or best)market segment. 
B)  tries to have the best cost (as compared to rivals)for each activity in the industry's value chain. 
C)  tries to outcompete a low-cost provider by attracting buyers on the basis of charging the best price. 
D)  seeks to deliver superior value to buyers by satisfying their expectations on key quality/service/features/performance attributes and beating their expectations on price (given what rivals are charging for much the same attributes). 
E)  seeks to achieve the best costs by using the best operating practices and incorporating the best features and attributes.

Question 14

What are the distinctive features of a broad differentiation strategy? Under what circumstances is a broad differentiation strategy appealing?

Accepted Answer

The answer of What are the distinctive features of a...

Question 15

The target market of a best-cost provider is

Accepted Answer

A)  value-conscious buyers. 
B)  brand-conscious buyers. 
C)  price-sensitive buyers. 
D)  middle-income buyers. 
E)  young adults (in the 18-35 age group). 
A)  value-conscious buyers. 
B)  brand-conscious buyers. 
C)  price-sensitive buyers. 
D)  middle-income buyers. 
E)  young adults (in the 18-35 age group).

Question 16

A differentiation-based competitive advantage

Accepted Answer

A)  nearly always is attached to the quality and service aspects of a company's product offering. 
B)  most usually is the result of highly effective marketing and advertising campaigns designed to build awareness and recognition of the product or service offering. 
C)  requires developing at least one distinctive competence that buyers consider valuable. 
D)  hinges on a company's success in developing top-of-the-line product features that will command the biggest price premium in the industry. 
E)  often hinges on incorporating features that (1)raise the performance of the product or (2)lower the buyer's overall costs of using the company's product or (3)enhance buyer satisfaction in intangible or noneconomic ways or (4)deliver value to customers by exploiting competitive capabilities that rivals can't match. 
A)  nearly always is attached to the quality and service aspects of a company's product offering. 
B)  most usually is the result of highly effective marketing and advertising campaigns designed to build awareness and recognition of the product or service offering. 
C)  requires developing at least one distinctive competence that buyers consider valuable. 
D)  hinges on a company's success in developing top-of-the-line product features that will command the biggest price premium in the industry. 
E)  often hinges on incorporating features that (1)raise the performance of the product or (2)lower the buyer's overall costs of using the company's product or (3)enhance buyer satisfaction in intangible or noneconomic ways or (4)deliver value to customers by exploiting competitive capabilities that rivals can't match.

Question 17

Which one of the five generic competitive strategies is most likely to be best suited for an industry whose product is a commodity? Explain.

Accepted Answer

The answer of Which one of the five generic competitive...

Question 18

The objective of a best-cost provider strategy is to

Accepted Answer

A)  deliver superior value to buyers by satisfying their expectations on key quality/performance/features/service attributes and beating their expectations on price. 
B)  offer buyers the industry's best-performing product at the best cost and best (lowest)price in the industry. 
C)  attract buyers on the basis of having the industry's overall best-performing product at a price that is slightly below the industry-average price. 
D)  outcompete rivals using low-cost provider strategies. 
E)  translate its best-cost status into achieving the highest profit margins of any firm in the industry. 
A)  deliver superior value to buyers by satisfying their expectations on key quality/performance/features/service attributes and beating their expectations on price. 
B)  offer buyers the industry's best-performing product at the best cost and best (lowest)price in the industry. 
C)  attract buyers on the basis of having the industry's overall best-performing product at a price that is slightly below the industry-average price. 
D)  outcompete rivals using low-cost provider strategies. 
E)  translate its best-cost status into achieving the highest profit margins of any firm in the industry.

Question 19

In which one of the following market circumstances is a broad differentiation strategy generally not well suited?

Accepted Answer

A)  When buyer needs and preferences are diverse 
B)  When few rivals are pursuing a similar differentiation approach 
C)  When buyers are homogeneous in their needs and preferences and are generally satisfied with standardized product 
D)  When there are many ways to differentiate the product or service and many buyers perceive these differences as having value 
E)  When technological change is fast paced and competition revolves around rapidly evolving product features 
A)  When buyer needs and preferences are diverse 
B)  When few rivals are pursuing a similar differentiation approach 
C)  When buyers are homogeneous in their needs and preferences and are generally satisfied with standardized product 
D)  When there are many ways to differentiate the product or service and many buyers perceive these differences as having value 
E)  When technological change is fast paced and competition revolves around rapidly evolving product features

Question 20

What sets focused (or market niche)strategies apart from low-cost leadership and broad differentiation strategies is

Accepted Answer

A)  the extra attention paid to top-notch product performance and product quality. 
B)  their concentrated attention on a narrow piece of the overall market. 
C)  greater opportunity for competitive advantage. 
D)  their suitability for market situations where most industry rivals have weakly differentiated products. 
E)  their objective of delivering more value for the money. 
A)  the extra attention paid to top-notch product performance and product quality. 
B)  their concentrated attention on a narrow piece of the overall market. 
C)  greater opportunity for competitive advantage. 
D)  their suitability for market situations where most industry rivals have weakly differentiated products. 
E)  their objective of delivering more value for the money.

Identify cost drivers in a company's value chain.Explain how these drivers impact a firm's generic strategy.

The advantages of focusing a company's entire competitive effort on a single market niche allows for

In which of the following circumstances is a strategy to be the industry's overall low-cost provider not particularly well matched to the market situation?

The big danger or risk of an unsound best-cost provider strategy is

Successful differentiation allows a firm to

Which of the following is not an action that a company can take to do a better job than rivals of performing value chain activities more cost-effectively?

The objective of competitive strategy is to

A competitive strategy of striving to be the low-cost provider is particularly attractive when

A focused low-cost strategy seeks to achieve competitive advantage by

What are the distinctive features of a focused differentiation strategy? How is it different from a broad differentiation strategy?

The major avenues for achieving a cost advantage over rivals include

Opportunities to differentiate a company's product offering

A firm pursuing a best-cost provider strategy

What are the distinctive features of a broad differentiation strategy? Under what circumstances is a broad differentiation strategy appealing?

The target market of a best-cost provider is

A differentiation-based competitive advantage

Which one of the five generic competitive strategies is most likely to be best suited for an industry whose product is a commodity? Explain.

The objective of a best-cost provider strategy is to

In which one of the following market circumstances is a broad differentiation strategy generally not well suited?

What sets focused (or market niche)strategies apart from low-cost leadership and broad differentiation strategies is

Strategy, Business Models, and Competitive Advantage

Charting a Companys Direction: Vision and Mission, Objectives, and Strategy

Evaluating a Companys External Environment

Evaluating a Companys Resources, Capabilities, and Competitiveness

Strengthening a Companys Competitive Position: Strategic Moves, Timing, and Scope of Operations

Strategies for Competing in International Markets

Corporate Strategy: Diversification and the Multibusiness Company

Ethics, Corporate Social Responsibility, Environmental Sustainability, and Strategy

Superior Strategy Execution-Another Path to Competitive Advantage

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Exam 5: The Five Generic Competitive Strategies

Identify cost drivers in a company's value chain.Explain how these drivers impact a firm's generic strategy.

The advantages of focusing a company's entire competitive effort on a single market niche allows for

In which of the following circumstances is a strategy to be the industry's overall low-cost provider not particularly well matched to the market situation?

The big danger or risk of an unsound best-cost provider strategy is

Successful differentiation allows a firm to

Which of the following is not an action that a company can take to do a better job than rivals of performing value chain activities more cost-effectively?

The objective of competitive strategy is to

A competitive strategy of striving to be the low-cost provider is particularly attractive when

A focused low-cost strategy seeks to achieve competitive advantage by

What are the distinctive features of a focused differentiation strategy? How is it different from a broad differentiation strategy?

The major avenues for achieving a cost advantage over rivals include

Opportunities to differentiate a company's product offering

A firm pursuing a best-cost provider strategy

What are the distinctive features of a broad differentiation strategy? Under what circumstances is a broad differentiation strategy appealing?

The target market of a best-cost provider is

A differentiation-based competitive advantage

Which one of the five generic competitive strategies is most likely to be best suited for an industry whose product is a commodity? Explain.

The objective of a best-cost provider strategy is to

In which one of the following market circumstances is a broad differentiation strategy generally not well suited?

What sets focused (or market niche)strategies apart from low-cost leadership and broad differentiation strategies is

Strategy, Business Models, and Competitive Advantage

Charting a Companys Direction: Vision and Mission, Objectives, and Strategy

Evaluating a Companys External Environment

Evaluating a Companys Resources, Capabilities, and Competitiveness

Strengthening a Companys Competitive Position: Strategic Moves, Timing, and Scope of Operations

Strategies for Competing in International Markets

Corporate Strategy: Diversification and the Multibusiness Company

Ethics, Corporate Social Responsibility, Environmental Sustainability, and Strategy

Superior Strategy Execution-Another Path to Competitive Advantage

Filters