Question 1

A platform business such as Airbnb leverages data analytics to differentiate its offer from that of competitors such as VRBO.

Accepted Answer

A) True 
 B)False

Question 2

Overall cost leadership is a generic strategy unlike others that does not require a tight set of interrelated tactics.

Accepted Answer

A) True 
 B)False

Question 3

In evaluating the sustainability of the Atlas Door competitive advantages over the long run, it is important to evaluate the ability of rivals to

Accepted Answer

A)  easily imitate its strategy. 
B)  communicate with its customers. 
C)  consistently overprice their products. 
D)  find new suppliers.

Question 4

Which of the following reasons is not a reason that Atlas Door could lose competitive advantage?

Accepted Answer

A)  Its technologies are non-proprietary. 
B)  A rival easily could hire away its talented employees. 
C)  A new rival with a strong resource base could undercut its prices. 
D)  It has strong power over its distributors.

Question 5

Caterpillar collects and analyses large volumes of data about how customers use their tractors. This permits them to ________ the cost of new product development efforts and to better________ their products.

Accepted Answer

A)  increase; differentiate 
B)  reduce; differentiate 
C)  position; understand 
D)  identify; disperse

Question 6

Which of the following is not a potential pitfall of an integrated overall low cost and differentiation strategy?

Accepted Answer

A)  Firms that target too large a market that causes unit costs to increase. 
B)  Firms that underestimate the expenses associated with coordinating value-creating activities in the extended value chain. 
C)  Firms that fail to attain both strategies may end up with neither and become stuck-in-the-middle. 
D)  Firms that miscalculate sources of revenue and profit pools in the company industry.

Question 7

Global logistics firms such as DHL Supply Chain and Global Forwarding or C. H. Robinson Worldwide compete using an overall cost leadership strategy in primary activities such as

Accepted Answer

A)  effective layout of receiving dock operations. 
B)  effective use of automated technology to reduce scrappage rates. 
C)  minimize costs associated with employee turnover through effective policies. 
D)  standardized accounting practices to minimize personnel required.

Question 8

Which of the following is not a reason for the possible erosion of company competitive advantage?

Accepted Answer

A)  rapid change in technology 
B)  globalization 
C)  actions by rivals from within and outside of the industry 
D)  company commitment to innovation

Question 9

Piecemeal productivity improvements can be used by a mature business in need of a turnaround.

Accepted Answer

A) True 
 B)False

Question 10

Combination strategies, such as integrating overall low cost and differentiation, makes it easier for rivals to duplicate or imitate because it is harder for the primary firm to providevalue.

Accepted Answer

A) True 
 B)False

Question 11

Piecemeal productivity improvements during a turnaround typically do not involve

Accepted Answer

A)  business process reengineering. 
B)  increased capacity utilization. 
C)  benchmarking. 
D)  expansion of company product market scope.

Question 12

One aspect of using a cost leadership strategy is that experience effects may lead to lower costs. Experience effects are achieved by

Accepted Answer

A)  spreading out a given expense or investment over a greater volume. 
B)  hiring more experienced personnel. 
C)  repeating a process until a task becomes easier. 
D)  competing in an industry for a long time.

Question 13

Barnes and Noble lost its market share in book retailing to Amazon. It tried to regain market share by offering a similar electronic reader, the Nook, to the Amazon Kindle series. Thisdemonstrates that Barnes and Noble lacked

Accepted Answer

A)  a short-term strategy. 
B)  a company-wide strategy. 
C)  a sustainable competitive advantage. 
D)  good suppliers.

Question 14

Andersen Windows lowered costs, enhanced quality and variety, and improved its response time to customers by

Accepted Answer

A)  creating a new paper-based catalog. 
B)  creating an interactive computer version of its paper catalogs. 
C)  creating an integrated computer system of catalogs, products, orders, and manufacturing. 
D)  creating a manufacturing system for ordering parts.

Question 15

When Cindy Grossman turned around HSN successfully in 2014, which of the following was not one of the practices she used?

Accepted Answer

A)  engaging stakeholders in the discussion 
B)  developing a skilled, committed management team 
C)  redesigning the company offerings 
D)  making all best efforts to offer something for everyone

Question 16

What are the pitfalls of the overall cost leadership strategy? Provide an example for each pitfall and explain why it is a pitfall.

Accepted Answer

The answer of What are the pitfalls of the overall...

Question 17

A business that strives for a low-cost advantage must attain a(n) ________ cost advantage over rivals.

Accepted Answer

A)  relative 
B)  evolutionary 
C)  absolute 
D)  potential

Question 18

Two-sided or platform markets are an emerging trend according to the textbook authors. Choose an example of an existing platform market and explain how this firm positions itself to become the dominant player linking suppliers and customers.

Accepted Answer

The answer of Two-sided or platform markets are an emerging...

Question 19

A low-cost position permits buyers to exert power to drive ________ prices only to the level of the next most efficient producer.

Accepted Answer

A)  up 
B)  down 
C)  increasing 
D)  decreasing

Question 20

Company competitive advantages can be eroded by all the following except

Accepted Answer

A)  rapid changes in technology. 
B)  globalization. 
C)  actions by rivals within the industry. 
D)  actions by workers outside of the industry.

Exam 5: Business-Level Strategy Creating and Sustaining Competitive Advantages

A platform business such as Airbnb leverages data analytics to differentiate its offer from that of competitors such as VRBO.

Overall cost leadership is a generic strategy unlike others that does not require a tight set of interrelated tactics.

In evaluating the sustainability of the Atlas Door competitive advantages over the long run, it is important to evaluate the ability of rivals to

Which of the following reasons is not a reason that Atlas Door could lose competitive advantage?

Caterpillar collects and analyses large volumes of data about how customers use their tractors. This permits them to the cost of new product development efforts and to better their products.

Which of the following is not a potential pitfall of an integrated overall low cost and differentiation strategy?

Global logistics firms such as DHL Supply Chain and Global Forwarding or C. H. Robinson Worldwide compete using an overall cost leadership strategy in primary activities such as

Which of the following is not a reason for the possible erosion of company competitive advantage?

Piecemeal productivity improvements can be used by a mature business in need of a turnaround.

Combination strategies, such as integrating overall low cost and differentiation, makes it easier for rivals to duplicate or imitate because it is harder for the primary firm to providevalue.

Piecemeal productivity improvements during a turnaround typically do not involve

One aspect of using a cost leadership strategy is that experience effects may lead to lower costs. Experience effects are achieved by

Barnes and Noble lost its market share in book retailing to Amazon. It tried to regain market share by offering a similar electronic reader, the Nook, to the Amazon Kindle series. Thisdemonstrates that Barnes and Noble lacked

Andersen Windows lowered costs, enhanced quality and variety, and improved its response time to customers by

When Cindy Grossman turned around HSN successfully in 2014, which of the following was not one of the practices she used?

What are the pitfalls of the overall cost leadership strategy? Provide an example for each pitfall and explain why it is a pitfall.

A business that strives for a low-cost advantage must attain a(n) ________ cost advantage over rivals.

Two-sided or platform markets are an emerging trend according to the textbook authors. Choose an example of an existing platform market and explain how this firm positions itself to become the dominant player linking suppliers and customers.

A low-cost position permits buyers to exert power to drive ________ prices only to the level of the next most efficient producer.

Company competitive advantages can be eroded by all the following except