Question 1

Describe how a differentiation strategy can help a firm earn above-average returns.

Accepted Answer

The answer of Describe how a differentiation strategy can help...

Question 2

A low-cost position in the industry is not a valuable defense against rivals when competing on the basis of price.

Accepted Answer

A) True 
 B)False

Question 3

New Balance Athletic Shoes target Baby Boomers' needs for well-fitting shoes. The company is unique in that it offers a very broad range of shoe widths. A realistic potential risk New Balance runs in this focused differentiation strategy includes the possibility that:

Accepted Answer

A)  Baby Boomers may find that they do not need well-fitting shoes, because they will become increasingly sedentary as they age. 
B)  a competitor may be able to better use flexible manufacturing systems to make shoes with an individualized fit. 
C)  athletic shoes may go out of style. 
D)  New Balance shoes may begin to appeal to a wider market, thus losing New Balance's focus advantage.

Question 4

All of the following are considered generic business-level strategies EXCEPT:

Accepted Answer

A)  product diversification. 
B)  cost leadership. 
C)  focused differentiation. 
D)  integrated cost leadership/differentiation.

Question 5

By linking companies with their suppliers, distributors, and customers, ____ provide a company with flexibility.

Accepted Answer

A)  flexible manufacturing systems 
B)  information networks 
C)  Total Quality Management systems 
D)  capabilities

Question 6

In general, firms can be most effective if they develop business-level strategies that will serve the needs of the "typical customer" in the industry.

Accepted Answer

A) True 
 B)False

Question 7

A company selling diapers knows the market is for people with young children.  However, within that segment they can further divide the market by a demographic factor like:

Accepted Answer

A)  culture. 
B)  lifestyle. 
C)  consumption pattern. 
D)  income.

Question 8

One of the benefits of the integrated cost leadership/differentiation strategy is that it is less risky than either the cost leadership or differentiation strategies.

Accepted Answer

A) True 
 B)False

Question 9

An entrepreneur is investigating starting a company that provides tax advice to small companies. In order to position his company differently from the existing competitors, the entrepreneur must:

Accepted Answer

A)  analyze the reach, richness, and affiliation the company must have with its customers. 
B)  provide tax advice either in a different manner or provide a different kind of tax service than competitors. 
C)  offer tax advice at a price lower than the cheapest competitor. 
D)  offer tax advice at a higher quality than the best competitor.

Question 10

A business-level strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage in specific product markets.

Accepted Answer

A) True 
 B)False

Question 11

A flexible manufacturing system is a computer-controlled process used to produce a variety of products in moderate, flexible quantities with minimal manual intervention.

Accepted Answer

A) True 
 B)False

Question 12

Walmart's actions to become more upscale with the aim of taking sales away from Target provided an opening for competitors such as Amazon and Family Dollar to better compete on the basis of price and attract some of Walmart's customers.

Accepted Answer

A) True 
 B)False

Question 13

All of the following are ways that a good or service can be differentiated EXCEPT:

Accepted Answer

A)  responsive customer service. 
B)  perceived prestige and status. 
C)  economies of scale and efficient operations. 
D)  engineering design and performance.

Question 14

Stage in the family life cycle is a ______ factor.

Accepted Answer

A)  demographic 
B)  socioeconomic 
C)  psychological 
D)  perceptual

Question 15

A differentiation strategy can be effective in controlling the power of substitutes in an industry because:

Accepted Answer

A)  customers have low switching costs. 
B)  substitute products are lower quality. 
C)  a differentiating firm can always lower prices. 
D)  customers develop brand loyalty.

Question 16

Unlike a cost leadership and a differentiation strategy, both focus strategies are less dependent on the completion of various value chain and support activities to compete in a superior manner.

Accepted Answer

A) True 
 B)False

Question 17

The ________dimension of relationships with customers is particularly important for social networking sites such as Facebook and Twitter.

Accepted Answer

A)  reach 
B)  richness 
C)  affiliation 
D)  social

Question 18

The effectiveness of any of the generic business-level strategies is contingent upon:

Accepted Answer

A)  customer needs and competitors' strategies. 
B)  the match between the opportunities and threats in its external market and the strengths of its internal environment. 
C)  the trends in the general consumer base and the robustness of the global and industry economy. 
D)  the firm's competitive scope and its competitive advantage.

Question 19

A risk of a focus strategy is that the needs of the customer within a narrow competitive segment may become more similar to those needs of customers in the whole market.

Accepted Answer

A) True 
 B)False

Question 20

Strategic fit among many activities (in an activity map) is fundamental to:

Accepted Answer

A)  the development of core competencies for a firm. 
B)  the breadth of competitive scope for a firm. 
C)  sustainability of a firm's competitive advantage. 
D)  the integrity of the firm's value chain.

Exam 4: Business-Level Strategy

Describe how a differentiation strategy can help a firm earn above-average returns.

A low-cost position in the industry is not a valuable defense against rivals when competing on the basis of price.

New Balance Athletic Shoes target Baby Boomers' needs for well-fitting shoes. The company is unique in that it offers a very broad range of shoe widths. A realistic potential risk New Balance runs in this focused differentiation strategy includes the possibility that:

All of the following are considered generic business-level strategies EXCEPT:

By linking companies with their suppliers, distributors, and customers, ____ provide a company with flexibility.

In general, firms can be most effective if they develop business-level strategies that will serve the needs of the "typical customer" in the industry.

A company selling diapers knows the market is for people with young children. However, within that segment they can further divide the market by a demographic factor like:

One of the benefits of the integrated cost leadership/differentiation strategy is that it is less risky than either the cost leadership or differentiation strategies.

An entrepreneur is investigating starting a company that provides tax advice to small companies. In order to position his company differently from the existing competitors, the entrepreneur must:

A business-level strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage in specific product markets.

A flexible manufacturing system is a computer-controlled process used to produce a variety of products in moderate, flexible quantities with minimal manual intervention.

Walmart's actions to become more upscale with the aim of taking sales away from Target provided an opening for competitors such as Amazon and Family Dollar to better compete on the basis of price and attract some of Walmart's customers.

All of the following are ways that a good or service can be differentiated EXCEPT:

Stage in the family life cycle is a ______ factor.

A differentiation strategy can be effective in controlling the power of substitutes in an industry because:

Unlike a cost leadership and a differentiation strategy, both focus strategies are less dependent on the completion of various value chain and support activities to compete in a superior manner.

The ________dimension of relationships with customers is particularly important for social networking sites such as Facebook and Twitter.

The effectiveness of any of the generic business-level strategies is contingent upon:

A risk of a focus strategy is that the needs of the customer within a narrow competitive segment may become more similar to those needs of customers in the whole market.

Strategic fit among many activities (in an activity map) is fundamental to: