Question 1

Which of the following is true regarding an inside-the-box strategy?

Accepted Answer

A) It is an overreaction to customer demands due to limited competitor knowledge. 
B) It leverages a knowledge advantage with respect to customers and competitors. 
C) It is an overreaction to competitor moves due to limited customer knowledge. 
D) It is based on minimal customer and competitor knowledge. 
E) It is based on extensive competitor knowledge,but little or no customer knowledge.

Question 2

A business implements an oblique strategy because it seeks to gain a competitive advantage with direct confrontation.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is true of variable cost advantage?

Accepted Answer

A) Scale effect occurs for a manufacturer who doubles production capacity. 
B) Businesses with a substantial market share advantage generally achieve a higher unit cost. 
C) As volume increases,the cost per unit generally increases. 
D) A larger unit volume allows for production that lowers the per-unit manufacturing cost,thereby creating a scope effect. 
E) As a business builds more of the same product,there is a greater opportunity for scale effects.

Question 4

In the context of competitor analysis,which of the following formulas is used by a business to calculate the performance gap?

Accepted Answer

A) Business Performance − Competitor Performance 
B) Business Performance - Total Production and Marketing Costs 
C) (Market-Based Performance - Operating Performance)/ Average Competitor Performance 
D) Potential Business Performance - Actual Business Performance 
E) Business's Relative Performance - Average Performance of Top Three Competitors

Question 5

Calculate the cost advantage index if the percentage cost of goods sold by the business is 40% and the average percentage cost of goods sold by its top three competitors are 50%,60%,and 70%,respectively.

Accepted Answer

A) 20 
B) 40 
C) 57 
D) 67 
E) 80

Question 6

An oblique strategy requires superior knowledge of both competitors and customers.

Accepted Answer

A) True 
 B)False

Question 7

In any competitive environment,reputation is the principal source of competitive advantage.

Accepted Answer

A) True 
 B)False

Question 8

A business that dominates markets with a relative advantage in distribution,sales coverage,or marketing communications can control (and often block)market access,creating a source of competitive advantage.Which source of competitive advantage does this create?

Accepted Answer

A) scope advantage 
B) market segmentation advantage 
C) marketing advantage 
D) learning advantage 
E) marketing cost scope advantage

Question 9

Which of the following is most likely to be a barrier to exit?

Accepted Answer

A) high advertising expenses 
B) specialized assets 
C) many product substitutes 
D) high customer power 
E) R&D expenses

Question 10

Brand reputation advantage is a type of ________ advantage.

Accepted Answer

A) variable cost 
B) differentiation 
C) channel 
D) operating cost 
E) marketing cost

Question 11

A scope effect refers to ________.

Accepted Answer

A) lowering the per-unit manufacturing cost of a product by increasing the volume of production 
B) improving the efficiency by learning new methods of management and production 
C) lowering the average unit cost of all products through extension of the product line 
D) increasing revenue by increasing the scope of marketing initiatives 
E) lowering the marketing costs through increasing the advertising cost efficiency of a brand extension strategy

Question 12

The more similar two competitors are from a customer perspective,the more likely customers are to switch from one to the other.

Accepted Answer

A) True 
 B)False

Question 13

Global Wood Ventures Inc.is an American firm that manufactures,distributes,and exports structural plywood.The firm finds that multiple inventory management errors were causing customer dissatisfaction and reducing the firm's profits.It identified several companies,in completely different industries,that were considered to be the best in inventory management.After obtaining permission,professionals from Global Wood Ventures Inc.studied the inventory management system of One Stop Mart,a firm well known for its inventory management techniques.This knowledge helped Global Wood Ventures Inc.to develop a more error-free inventory management system.In this example,Global Wood Ventures Inc.uses which of the following strategies?

Accepted Answer

A) competitive benchmarking 
B) perceptual mapping 
C) disintermediation 
D) competitor analysis 
E) vertical integration

Question 14

Businesses that lack both customer knowledge and competitor knowledge,and make competitive moves from an internal perspective with no real market knowledge are said to be working with a(n)________ strategy.

Accepted Answer

A) oblique 
B) inside-the-box 
C) reactive 
D) decentralization 
E) disintermediation

Question 15

MINI-CASE
Sparks Inc. ,a firm that manufacturers low voltage halogen lamps,currently has a 40% share of a 1 million unit market.The firm has extensive customer knowledge,as well as extensive competitor knowledge.The three largest competitors of Sparks Inc.have market shares of 5%,10%,and 15%,respectively.
-Mini-Case Question.Sparks Inc.uses its superior knowledge of both customers and competitors to devise a market-based strategy to achieve desired gains without sustaining excessive losses.The firm seeks to gain a competitive advantage through a nonconfrontational approach.Which of the following competitive strategies is Sparks Inc.most likely to be using?

Accepted Answer

A) a disintermediation strategy 
B) an inside the box strategy 
C) an oblique strategy 
D) a frontal attack strategy 
E) a benchmarking strategy

Question 16

Businesses with a marketing advantage typically have prices much lower than average prices.

Accepted Answer

A) True 
 B)False

Question 17

Name and describe four of the six industry forces that shape the attractiveness of a competitive environment.

Accepted Answer

The answer of Name and describe four of the six...

Question 18

Which of the following is a type of differentiation advantage?

Accepted Answer

A) service advantage 
B) market share advantage 
C) channel advantage 
D) operating cost advantage 
E) product line advantage

Question 19

Calculate a company's market share if the company's relative market share is 60 and the market shares of its three largest competitors are 14%,8%,and 16%.

Accepted Answer

A) 40.6% 
B) 20% 
C) 46% 
D) 22.8% 
E) 60%

Question 20

Which of the following is true of product line advantage?

Accepted Answer

A) A business with a broad line of products has to be more focused in order to be cost effective in its marketing efforts. 
B) It is important to expand a business's product line during the emerging stage of the product life cycle. 
C) Businesses with narrow product lines are more profitable during the emerging and growing stages of a product life cycle. 
D) A narrow line of products creates more selling opportunities for the sales force and channel partners. 
E) It is a source of competitive advantage that is independent of differentiation advantage.

Exam 6: Competitive Position and Sources of Advantage

Which of the following is true regarding an inside-the-box strategy?

A business implements an oblique strategy because it seeks to gain a competitive advantage with direct confrontation.

Which of the following is true of variable cost advantage?

In the context of competitor analysis,which of the following formulas is used by a business to calculate the performance gap?

Calculate the cost advantage index if the percentage cost of goods sold by the business is 40% and the average percentage cost of goods sold by its top three competitors are 50%,60%,and 70%,respectively.

An oblique strategy requires superior knowledge of both competitors and customers.

In any competitive environment,reputation is the principal source of competitive advantage.

A business that dominates markets with a relative advantage in distribution,sales coverage,or marketing communications can control (and often block) market access,creating a source of competitive advantage.Which source of competitive advantage does this create?

Which of the following is most likely to be a barrier to exit?

Brand reputation advantage is a type of ________ advantage.

A scope effect refers to ________.

The more similar two competitors are from a customer perspective,the more likely customers are to switch from one to the other.

Businesses that lack both customer knowledge and competitor knowledge,and make competitive moves from an internal perspective with no real market knowledge are said to be working with a(n) ________ strategy.

Businesses with a marketing advantage typically have prices much lower than average prices.

Name and describe four of the six industry forces that shape the attractiveness of a competitive environment.

Which of the following is a type of differentiation advantage?

Calculate a company's market share if the company's relative market share is 60 and the market shares of its three largest competitors are 14%,8%,and 16%.

Which of the following is true of product line advantage?