Question 1

Which one of the following does not represent market circumstances that make a focused low-cost or focused differentiation strategy attractive?

Accepted Answer

A) When it is costly or difficult for multisegment competitors to meet the specialized needs of the target market niche and at the same time satisfy the expectations of their mainstream customers 
B) When the industry has many different segments and market niches,thereby allowing a focuser to pick an attractive niche suited to its resource strengths and capabilities 
C) When industry leaders have chosen not to compete in the niche 
D) When the target market niche is big enough to be profitable and offers good growth potential 
E) When buyers are not strongly brand loyal and a large number of other rivals are attempting to specialize in the same target segment 
A) When it is costly or difficult for multisegment competitors to meet the specialized needs of the target market niche and at the same time satisfy the expectations of their mainstream customers 
B) When the industry has many different segments and market niches,thereby allowing a focuser to pick an attractive niche suited to its resource strengths and capabilities 
C) When industry leaders have chosen not to compete in the niche 
D) When the target market niche is big enough to be profitable and offers good growth potential 
E) When buyers are not strongly brand loyal and a large number of other rivals are attempting to specialize in the same target segment E

Question 2

A low-cost provider strategy can defeat a differentiation strategy

Accepted Answer

A) when a company can offset thinner profit margins per unit by selling sufficient additional units to increase total profits. 
B) when there are few ways to differentiate a product or a service and many buyers perceive these differences as valuable. 
C) when customers are basically satisfied and do not think extra attributes are worth a higher price feature. 
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 a company can offset thinner profit margins per unit by selling sufficient additional units to increase total profits. 
B) when there are few ways to differentiate a product or a service and many buyers perceive these differences as valuable. 
C) when customers are basically satisfied and do not think extra attributes are worth a higher price feature. 
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. C

Question 3

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. E

Question 4

Achieving a cost advantage over its rivals entails

Accepted Answer

A) concentrating on the primary activities portion of the value chain and outsourcing all support activities. 
B) being a first mover in pursuing backward and forward integration,and controlling as much of the industry value chain as possible. 
C) performing value chain activities more cost-effectively than its rivals and finding ways to eliminate or bypass some cost-producing activities. 
D) minimizing R&D expenses and paying below-average wages and salaries to conserve on labor costs. 
E) producing a standard product,redesigning the product infrequently,and having minimal advertising. 
A) concentrating on the primary activities portion of the value chain and outsourcing all support activities. 
B) being a first mover in pursuing backward and forward integration,and controlling as much of the industry value chain as possible. 
C) performing value chain activities more cost-effectively than its rivals and finding ways to eliminate or bypass some cost-producing activities. 
D) minimizing R&D expenses and paying below-average wages and salaries to conserve on labor costs. 
E) producing a standard product,redesigning the product infrequently,and having minimal advertising.

Question 5

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.

Question 6

The aim of the best-cost provider strategy is to create a competitive advantage by

Accepted Answer

A) incorporating attractive or upscale product attributes at a lower cost than rivals. 
B) offering buyers the industry's best-performing product at the best cost and best (lowest)price in the industry. 
C) attracting 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) outcompeting rivals using low-cost provider strategies. 
E) translating its best-cost status into achieving the highest profit margins of any firm in the industry. 
A) incorporating attractive or upscale product attributes at a lower cost than rivals. 
B) offering buyers the industry's best-performing product at the best cost and best (lowest)price in the industry. 
C) attracting 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) outcompeting rivals using low-cost provider strategies. 
E) translating its best-cost status into achieving the highest profit margins of any firm in the industry.

Question 7

A low-cost leader can translate its low-cost advantage over its rivals into superior profit performance by

Accepted Answer

A) cutting its price to levels significantly below the prices of its rivals. 
B) using its low-cost edge to underprice competitors and attract price-sensitive buyers in large enough numbers to increase total profits or refraining from price cutting and using the low-cost advantage to earn a higher profit margin on each unit sold. 
C) going all out to use its cost advantage to capture a dominant share of the market. 
D) spending heavily on advertising to promote the fact that it charges the lowest prices in the industry. 
E) outproducing its rivals and thus having more units available to sell. 
A) cutting its price to levels significantly below the prices of its rivals. 
B) using its low-cost edge to underprice competitors and attract price-sensitive buyers in large enough numbers to increase total profits or refraining from price cutting and using the low-cost advantage to earn a higher profit margin on each unit sold. 
C) going all out to use its cost advantage to capture a dominant share of the market. 
D) spending heavily on advertising to promote the fact that it charges the lowest prices in the industry. 
E) outproducing its rivals and thus having more units available to sell.

Question 8

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 costs 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 costs of switching purchases from one seller to another are relatively high 
E) When industry newcomers use introductory prices to build a customer base

Question 9

A focused differentiation strategy aims at securing competitive advantage

Accepted Answer

A) by providing niche members with a top-of-the-line product at a premium price. 
B) by catering to buyers looking for an upscale product at an attractively low price. 
C) with a product or service offering carefully designed to appeal to the unique preferences and needs of a narrow,well-defined group of buyers. 
D) by developing product attributes that no other company in the industry has. 
E) by convincing affluent buyers that the company has a true world-class product. 
A) by providing niche members with a top-of-the-line product at a premium price. 
B) by catering to buyers looking for an upscale product at an attractively low price. 
C) with a product or service offering carefully designed to appeal to the unique preferences and needs of a narrow,well-defined group of buyers. 
D) by developing product attributes that no other company in the industry has. 
E) by convincing affluent buyers that the company has a true world-class product.

Question 10

What are the distinctive features of a focused low-cost strategy? How does a focused low-cost strategy differ from a low-cost leadership strategy?

Accepted Answer

Achieving a low-cost edge over rivals co

Question 11

While there are many routes to competitive advantage,they all involve

Accepted Answer

A) building a brand name image that buyers trust. 
B) delivering superior value to a broad or narrow market of buyers in ways rivals cannot readily match. 
C) achieving lower costs than rivals and becoming the industry's sales and market share leader. 
D) finding effective and efficient ways to strengthen the company's competitive assets and to reduce its competitive liabilities. 
E) getting in the best strategic group and dominating it. 
A) building a brand name image that buyers trust. 
B) delivering superior value to a broad or narrow market of buyers in ways rivals cannot readily match. 
C) achieving lower costs than rivals and becoming the industry's sales and market share leader. 
D) finding effective and efficient ways to strengthen the company's competitive assets and to reduce its competitive liabilities. 
E) getting in the best strategic group and dominating it.

Question 12

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-to-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-to-35 age group).

Question 13

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 of 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 of 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 14

A strategy to be the industry's overall low-cost provider tends to be more appealing than a differentiation or focus strategy when

Accepted Answer

A) there are many ways to achieve product differentiation that buyers find appealing. 
B) buyers use the product in a variety of different ways. 
C) the offerings of rival firms are essentially identical,standardized,commodity-like products. 
D) buyers have high switching costs in changing from one seller's product to another. 
E) the market is composed of many buyer types,all with varying needs and expectations. 
A) there are many ways to achieve product differentiation that buyers find appealing. 
B) buyers use the product in a variety of different ways. 
C) the offerings of rival firms are essentially identical,standardized,commodity-like products. 
D) buyers have high switching costs in changing from one seller's product to another. 
E) the market is composed of many buyer types,all with varying needs and expectations.

Question 15

The major avenues for achieving a cost advantage over its rivals include

Accepted Answer

A) eliminating or curbing nonessential cost-producing activities and performing essential value chain activities more cost-effectively than its 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 manufacturing. 
D) outsourcing high-cost activities to offshore vendors. 
E) paying lower wages to its hourly workers than what rivals are paying their workers. 
A) eliminating or curbing nonessential cost-producing activities and performing essential value chain activities more cost-effectively than its 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 manufacturing. 
D) outsourcing high-cost activities to offshore vendors. 
E) paying lower wages to its hourly workers than what rivals are paying their workers.

Question 16

Easy-to-copy differentiating features

Accepted Answer

A) do not offer the promise of sustainable competitive advantage. 
B) are less expensive to integrate into a product or service offering. 
C) tend to create as much value for consumers as difficult-to-copy differentiating features. 
D) should be patented before other companies follow suit. 
E) lead to vigorous price competition. 
A) do not offer the promise of sustainable competitive advantage. 
B) are less expensive to integrate into a product or service offering. 
C) tend to create as much value for consumers as difficult-to-copy differentiating features. 
D) should be patented before other companies follow suit. 
E) lead to vigorous price competition.

Question 17

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 18

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

A low-cost provider strategy tends to wo

Question 19

A firm pursuing a best-cost provider strategy

Accepted Answer

A) seeks to offer more value-adding features than the industry's low-cost providers and lower prices than those pursuing differentiation. 
B) achieves competitive advantage because its operating activities are best-in-class or best-in-world. 
C) tries to have the best cost (as compared to rivals)for each activity in the industry's value chain. 
D) opts for a middle-of-the-road strategic approach that attempts to satisfy the product or service needs of consumers with average household incomes. 
E) follows a hybrid strategy based upon superior resources and a narrow market niche. 
A) seeks to offer more value-adding features than the industry's low-cost providers and lower prices than those pursuing differentiation. 
B) achieves competitive advantage because its operating activities are best-in-class or best-in-world. 
C) tries to have the best cost (as compared to rivals)for each activity in the industry's value chain. 
D) opts for a middle-of-the-road strategic approach that attempts to satisfy the product or service needs of consumers with average household incomes. 
E) follows a hybrid strategy based upon superior resources and a narrow market niche.

Question 20

The generic types of competitive strategies include

Accepted Answer

A) the building,maintaining,and slowly surrendering of market share. 
B) offensive strategies and defensive strategies. 
C) low-cost provider,broad differentiation,focused low-cost,focused differentiation,and best-cost provider strategies. 
D) low-cost/low-price strategies,high-quality/high-price strategies,medium-quality/medium-price strategies,low-cost/high-price strategies. 
E) price leader strategies,price follower strategies,technology leader strategies,first-mover strategies,offensive strategies,and defensive strategies. 
A) the building,maintaining,and slowly surrendering of market share. 
B) offensive strategies and defensive strategies. 
C) low-cost provider,broad differentiation,focused low-cost,focused differentiation,and best-cost provider strategies. 
D) low-cost/low-price strategies,high-quality/high-price strategies,medium-quality/medium-price strategies,low-cost/high-price strategies. 
E) price leader strategies,price follower strategies,technology leader strategies,first-mover strategies,offensive strategies,and defensive strategies.

Which one of the following does not represent market circumstances that make a focused low-cost or focused differentiation strategy attractive?

A low-cost provider strategy can defeat a differentiation strategy

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

Achieving a cost advantage over its rivals entails

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

The aim of the best-cost provider strategy is to create a competitive advantage by

A low-cost leader can translate its low-cost advantage over its rivals into superior profit performance by

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?

A focused differentiation strategy aims at securing competitive advantage

What are the distinctive features of a focused low-cost strategy? How does a focused low-cost strategy differ from a low-cost leadership strategy?

While there are many routes to competitive advantage,they all involve

The target market of a best-cost provider is

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

A strategy to be the industry's overall low-cost provider tends to be more appealing than a differentiation or focus strategy when

The major avenues for achieving a cost advantage over its rivals include

Easy-to-copy differentiating features

Successful differentiation allows a firm to

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

A firm pursuing a best-cost provider strategy

The generic types of competitive strategies include

Strategy,business Models,and Competitive Advantage

Strategy Formulation,execution,and Governance

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 Executionanother Path to Competitive Advantage

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Exam 5: The Five Generic Competitive Strategies

Which one of the following does not represent market circumstances that make a focused low-cost or focused differentiation strategy attractive?

A low-cost provider strategy can defeat a differentiation strategy

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

Achieving a cost advantage over its rivals entails

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

The aim of the best-cost provider strategy is to create a competitive advantage by

A low-cost leader can translate its low-cost advantage over its rivals into superior profit performance by

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?

A focused differentiation strategy aims at securing competitive advantage

What are the distinctive features of a focused low-cost strategy? How does a focused low-cost strategy differ from a low-cost leadership strategy?

While there are many routes to competitive advantage,they all involve

The target market of a best-cost provider is

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

A strategy to be the industry's overall low-cost provider tends to be more appealing than a differentiation or focus strategy when

The major avenues for achieving a cost advantage over its rivals include

Easy-to-copy differentiating features

Successful differentiation allows a firm to

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

A firm pursuing a best-cost provider strategy

The generic types of competitive strategies include

Strategy,business Models,and Competitive Advantage

Strategy Formulation,execution,and Governance

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 Executionanother Path to Competitive Advantage

Filters