Deck 9: Strategic Positioning for Competitive Advantage

Question 1

When multiple firms' price-quality positions line up along the same indifference curve offering a consumer the same amount of consumer surplus,what term describes the situation?

A)Price-quality parity
B)Price matching
C)Maximum willingness-to-pay
D)Consumer surplus parity
E)Consumer surplus

Answer 1

Consumer surplus parity

Question 2

Select the letter corresponding to the best answer.For a given consumer,any price-quality combination along the indifference curve yields the _______________.

A)Same consumer surplus
B)Same maximum willingness-to-pay
C)High consumer surplus
D)Low consumer surplus
E)Same competitive advantage

Answer 2

Same consumer surplus

Question 3

What term describes the situation when a firm earns a higher rate of economic profit than the average rate of economic profit of other firms competing within the same market?

A)Industry effect
B)Competitive advantage
C)Business unit effect
D)Competitive position
E)Market profitability economics

Answer 3

Competitive advantage

Question 4

What term describes the process of using market prices of unfinished and semi-finished goods to estimate the incremental value-created by distinctive parts of the value chain?

A)Value-added analysis
B)Value creation analysis
C)Market value analysis
D)Value benefit drivers
E)Value cost drivers

Question 5

Which of the following represents total surplus in t he value creation equation,(B-P)+ (P-C)?

A)B + C
B)P + C
C)B - C
D)P - C
E)None of the above

Question 6

Which of the following is a concept developed by Michael Porter that describes,in broad terms,how it positions itself to compete in the market it serves?

A)Value chain
B)Generic strategy
C)Benefit leadership
D)Cost Leadership
E)Focus

Question 7

The steepness (slope)of an indifference curve indicates which of the following?

A)The tradeoff a consumer is willing to make between price and quality
B)The change in price holding product benefit constant
C)The change in benefit holding price constant
D)The tradeoff between consumer surplus and producer surplus
E)None of the above

Question 8

What type of curve can be used to describe the set of price-quality combinations that yields the same consumer surplus to an individual?

A)Frontier curve
B)Learning curve
C)Level curve
D)Implicit curve
E)Indifference curve

Question 9

What term describes the price at which a consumer is indifferent between buying a product and going without it?

A)Value creation
B)Competitive advantage
C)Consumer surplus
D)Maximum willingness-to-pay
E)Value chain

Question 10

Which of the following is false with respect to the strategy of cost leadership?

A)A firm following a strategy of cost leadership is following a generic strategy narrow in scope
B)A firm can follow a cost leadership strategy through achieving benefit parity by making products with the same B,but at a lower C than its rivals
C)A firm can follow a cost leadership strategy through achieving benefit proximity by offering a B that is not much less than those of competitors
D)A firm following a strategy of cost leadership creates more value than its competitors by offering products that have a lower C than those of its rivals
E)A firm can follow a cost leadership strategy by offering a product that is qualitatively different from that of its rivals

Question 11

What is one way to measure a firm's willingness-to-pay?

A)Marginal profit per unit of production
B)Value added analysis
C)Cost-benefit analysis
D)Input-output analysis
E)Sales-per-cost analysis

Question 12

Which of the following represents consumer surplus in the value creation equation,(B-P)+ (P-C)?

A)B
B)P
C)C
D)B-P
E)P-C

Question 13

Which of the following represents producer surplus in the value creation equation,(B-P)+ (P-C)?

A)B
B)P
C)C
D)B-P
E)P-C

Question 14

What is the perceived benefit of a product per unit consumed minus the product's monetary price?

A)Value creation
B)Competitive advantage
C)Consumer surplus
D)Maximum willingness-to-pay
E)Value chain

Question 15

Which of the following is a resource?

A)Brand promotion skills
B)Yield management capabilities
C)Ability to manage sourcing and procurement functions
D)Workers with firm-specific expertise or know-how
E)Ability to integrate order-taking,procurement,manufacturing and out-bound logistics

Question 16

What is another term for a "win-win" business opportunity?

A)Economic profit
B)Excess total surplus
C)Gains from trade
D)Consumer surplus excess
E)Benefit - Benefit transaction

Question 17

Benefit proximity refers to which of the following?

A)Competing firms offering products with exactly the same benefit
B)Cost leading firms offering products with slightly less benefit
C)Product benefits that cannot easily be differentiated by the consumer
D)Cost leading firms offering products with slightly more benefit
E)The inability for competing firms to produce products with similar benefits

Question 18

Which of the following terms is a concept,developed by Michael Porter,which describes the activities within firms and across firms that add value along the way to the ultimate transacted good or service?

A)Five forces
B)Value creation
C)Value chain
D)Consumer surplus
E)Producer surplus

Question 19

Which of the following is a capability?

A)Patents and trademarks
B)Brand-name reputation
C)Installed base
D)Organizational culture
E)Sourcing skills

Question 20

Which of the following is not a common characteristic of capabilities?

A)They are valuable across multiple products or markets
B)They are tacit
C)They are easy to reduce to simple algorithms or procedure guides
D)They are embedded in what Richard Nelson and Sidney Winter call organizational routines - well-honed patterns of performing activities inside an organization
E)They can persist even though individuals leave the organization

Question 21

What term coined by Michael Porter describes a tool that can be used to show how nearly every industry can be broken down into smaller pieces known as segments?

A)Industry breakdown matrix
B)Industry five forces matrix
C)Industry value creation matrix
D)Industry segmentation matrix
E)Industry dimensions matrix

Question 22

Which of the following is a characteristic of an experience good?

A)Warranty service is included in the sales price
B)An independent evaluation certifies the product
C)The product is heavily advertised
D)Quality can be assessed only after the customer has used it for a while
E)Noen of the above

Question 23

What type of good is one whose quality is relatively easy to evaluate before purchase?

A)Consumer packaged good
B)Search good
C)Experience good
D)Automobile
E)Appliance

Question 24

What term coined by Michael Porter describes a firm that pursues elements of cost leadership and benefit leadership at the same time and in the process fails to achieve either a cost advantage or a benefit advantage?

A)Five forces
B)Value creation
C)Value chain
D)Stuck in the middle
E)Generic strategy

Question 25

What kind of strategy is one by which a firm maintains price parity with its competitors and profits from its benefit or cost advantage primarily through high price-cost margins,rather than through a higher market share?

A)Pricing strategy
B)Share strategy
C)Margin strategy
D)Focus strategy
E)Generic strategy

Question 26

What type of strategy seeks to serve all customer groups in the market by offering a full line of related products?

A)Generic strategy
B)Margin strategy
C)Focus strategy
D)Share strategy
E)Broad-coverage strategy

Question 27

Consumer surplus is measured as which of the following?

A)The excess of sales price over manufacturing cost
B)The amount a consumer pays for a good minus search costs
C)The perceived manufacturing cost by a consumer as a percentage of sales price
D)The perceived benefit of a product per unit consumed minus the product's monetary price
E)The loss incurred by a firm selling at a price below its manufacturing cost

Question 28

Which of the following best describes a focus strategy?

A)When a firm either offer a narrow set of varieties,serve a narrow set of customers,or do both
B)When a firm sells products manufactured with raw materials from monopoly suppliers
C)When a firm is the only one selling specific products
D)When a firm faces many competitors and charges a lower price
E)None of the above

Question 29

What term best describes a targeting strategy in which the firm offers a variety or related products to a particular class of customers?

A)Broad-coverage strategy
B)Focus Strategy
C)Geographic specialization
D)Product specialization
E)Customer specialization

Question 30

Under what type of strategy does a firm either offer a narrow set of varieties,serve a narrow set of customers,or do both?

A)Generic strategy
B)Margin strategy
C)Focus strategy
D)Share strategy
E)Broad-coverage strategy

Question 31

Which of the following statements best describes a characteristic of geographic specialization focus strategies?

A)Offers a variety of products and/or sells to a variety of customer groups within a narrow geography
B)Offers an array of product varieties to a limited class of customers
C)Caters to the particular needs of the customer group served
D)Offers a limited set of products to an array of different customer groups
E)Does an especially good job satisfying a subset of the needs of the consumer groups being served

Question 32

What type of good is one whose quality can be assessed only after the customer has used it for a while?

A)Apparel
B)Search good
C)Experience good
D)Office furniture
E)Airline tickets

Question 33

What kind of strategy is one by which a firm exploits its benefit or cost advantage through a higher market share rather than through high price-cost margins?

A)Pricing strategy
B)Share strategy
C)Margin strategy
D)Focus strategy
E)Generic strategy