Question 1

When a product's unique attributes provide value to customers,the firm is implementing:

Accepted Answer

A)   a differentiation strategy.
B)   a cost leadership strategy.
C)   an integrated cost leadership/differentiation strategy.
D)   a single-product strategy. A

Question 2

The firm successfully implementing the cost leadership strategy would expect:

Accepted Answer

A)   competitors to compete against it primarily on the basis of prices charged.
B)   to constantly face challenges from a steady stream of new entrants to the industry.
C)   to be able to fend off the challenge of product substitutes.
D)   to focus on its own cost structure,but not its competitors' cost structures. C

Question 3

The conditions that make it possible for firms to gain a competitive advantage through implementation of the integrated cost leadership/differentiation strategy include all of the following EXCEPT:

Accepted Answer

A)   flexible manufacturing.
B)   total quality management systems.
C)   information networks across firms.
D)   downsizing of the organization. D

Question 4

Which of the following is NOT a value-creating activity associated with the differentiation strategy?

Accepted Answer

A)   intensive training programs to improve employee effectiveness and efficiency
B)   strong capability in basic research.
C)   rapid and timely deliveries to customers.
D)   procurement systems focused on finding the highest quality raw materials.

Question 5

The integration of a cost leadership and a differentiation strategy will:

Accepted Answer

A)   not be used extensively in the future.
B)   allow a firm to adapt more quickly.
C)   slow the ability of a firm to respond.
D)   lower the risks of the firm.

Question 6

Firms seeking to differentiate particularly need support from the ____ and ____ functions.

Accepted Answer

A)   finance,accounting
B)   finance,record keeping
C)   product R&D,marketing
D)   management information,finance

Question 7

Define strategy and business-level strategy.

Accepted Answer

The answer of Define strategy and business-level strategy....

Question 8

Describe the advantages of integrating cost leadership and differentiation strategies.

Accepted Answer

The answer of Describe the advantages of integrating cost leadership...

Question 9

Firms implementing a cost leadership strategy should use a ____ structure.

Accepted Answer

A)   highly formalized,simple
B)   specialized multidivisional
C)   product line
D)   highly centralized,functional

Question 10

Which of the following is NOT considered a generic strategy?

Accepted Answer

A)   Product diversification
B)   Cost leadership
C)   Focused differentiation
D)   Integrated cost leadership/differentiation

Question 11

Successful implementation of the differentiation strategy requires that:

Accepted Answer

A)   decision making be centralized.
B)   decision making be decentralized.
C)   the finance function be the dominant function.
D)   the accounting function be the dominant function.

Question 12

The risks of a focus strategy include:

Accepted Answer

A)   a competitor's ability to use its core competencies to outfocus the focuser by serving an even more narrowly defined segment.
B)   a competitor's ability to use its core competencies to outfocus the focuser by serving an even more broadly defined segment.
C)   decisions by industry-wide competitors to use their resources to serve a wider range of customers' specialized needs than the focuser has been serving.
D)   decisions by focused competitors to use their resources to serve a wider range of customers' needs.

Question 13

A low-cost leader may create entry barriers to potential entrants by continually improving its levels of efficiency.

Accepted Answer

A) True 
 B)False

Question 14

The four generic business-level strategies a firm can implement include all of the following EXCEPT:

Accepted Answer

A)   focused cost leadership.
B)   cost leadership.
C)   differentiation.
D)   leadership.

Question 15

What are the risks of an integrated cost leadership/differentiation strategy?

Accepted Answer

The answer of What are the risks of an integrated...

Question 16

A firm is "stuck in the middle" when its industry is in the middle of a rapid technological change.

Accepted Answer

A) True 
 B)False

Question 17

The integrated cost leadership/differentiation strategy is difficult to implement mostly because:

Accepted Answer

A)   the primary and support activities required to implement the cost leadership and differentiation strategies are not the same.
B)   this strategic approach demands more flexibility than most firms can manage.
C)   it is difficult to balance the structural emphasis between the two strategies.
D)   the cost leadership strategy requires less structured job roles than does the differentiation strategy.

Question 18

Typically,a successful firm pursuing a differentiation strategy will:

Accepted Answer

A)   have a very hierarchical structure.
B)   require a structure which is very formal.
C)   use cross-functional development teams.
D)   develop free-standing business units.

Question 19

When the costs of supplies increase in an industry,the low-cost leader may:

Accepted Answer

A)   continue competing with rivals on the basis of product features.
B)   lose customers as a result of price increases.
C)   make it difficult for new entrants to the industry to achieve above-average returns.
D)   be the only firm able to pay the higher prices and continue to earn average or above-average returns.

Question 20

The products or services that differentiate often have qualities that are:

Accepted Answer

A)   perceived by the customer to add value.
B)   valued by the typical industry customer.
C)   appealing to the customer regardless of price.
D)   seen as classic attributes rather than passing fads.

Exam 5: Business-Level Strategy