Question 1

To generate above average returns,a firm following an overall cost leadership position should not be concerned with attaining parity or proximity on the basis of differentiation relative to its peers.

Accepted Answer

A) True 
 B)False

Question 2

A ____________ can be defined as the total profits in an industry at all points along the industry's value chain.

Accepted Answer

A)  profit maximizer 
B)  revenue enhancer 
C)  profit pool 
D)  profit outsourcing

Question 3

The experience curve concept suggests that production costs tend to decrease as production increases regardless of where an industry is at in its life cycle.

Accepted Answer

A) True 
 B)False

Question 4

Support value chain activities that involve excellent applications,engineering support (technology development)and facilities that promote a positive firm image (firm infrastructure)characterize what generic strategy?

Accepted Answer

A)  differentiation 
B)  overall cost leadership 
C)  differentiation focus 
D)  stuck-in-the middle

Question 5

A firm striving for cost leadership will typically spend relatively more on product related R&D than on process related R&D.

Accepted Answer

A) True 
 B)False

Question 6

A firm can achieve differentiation through all of the following means except

Accepted Answer

A)  improving brand image. 
B)  better customer service. 
C)  offering lower prices to frequent customers. 
D)  adding additional product features.

Question 7

Explain how a differentiation strategy enables a business to address the five competitive forces in such a way that it can enjoy high levels of profitability.

Accepted Answer

The answer of Explain how a differentiation strategy enables a...

Question 8

One of the advantages of high differentiation is that even if many competitors follow the same strategy,differentiation still exists for all.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is a risk (or pitfall)of cost leadership?

Accepted Answer

A)  the strategy is too easily imitated 
B)  attempts to stay ahead of the competition may lead to gold plating 
C)  cost differences increase as the market matures 
D)  producers are more able to withstand increases in suppliers' cost

Question 10

Primary value chain activities that involve the effective layout of receiving dock operations (inbound logistics)and support value chain activities that include expertise in process engineering (technology development)characterize what generic strategy?

Accepted Answer

A)  differentiation 
B)  overall cost leadership 
C)  differentiation focus 
D)  stuck-in-the-middle

Question 11

The experience curve suggests that cutting prices is a good strategy

Accepted Answer

A)  if it can induce greater demand and thereby help a firm travel down the experience curve faster. 
B)  in industries characterized by high economies of scale. 
C)  in the maturity stage of the industry life cycle. 
D)  in the decline stage of the industry life cycle.

Question 12

Developing uniqueness that is not valuable is:

Accepted Answer

A)  an essential feature of a differentiation strategy. 
B)  the result of having brand-loyal customers become more sensitive to prices. 
C)  a potential pitfall of a differentiation strategy. 
D)  an necessary evil of a cost-leadership strategy.

Question 13

Differentiation provides lower margins that enable a firm to deal with supplier power.

Accepted Answer

A) True 
 B)False

Question 14

Discuss the risks associated with each of these forms of competitive advantage-cost leadership,differentiation,and focus.

Accepted Answer

The answer of Discuss the risks associated with each of...

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

To generate above average returns,a firm following an overall cost leadership position should not be concerned with attaining parity or proximity on the basis of differentiation relative to its peers.

A ____________ can be defined as the total profits in an industry at all points along the industry's value chain.

The experience curve concept suggests that production costs tend to decrease as production increases regardless of where an industry is at in its life cycle.

Support value chain activities that involve excellent applications,engineering support (technology development) and facilities that promote a positive firm image (firm infrastructure) characterize what generic strategy?

A firm striving for cost leadership will typically spend relatively more on product related R&D than on process related R&D.

A firm can achieve differentiation through all of the following means except

Explain how a differentiation strategy enables a business to address the five competitive forces in such a way that it can enjoy high levels of profitability.

One of the advantages of high differentiation is that even if many competitors follow the same strategy,differentiation still exists for all.

Which of the following is a risk (or pitfall) of cost leadership?

Primary value chain activities that involve the effective layout of receiving dock operations (inbound logistics) and support value chain activities that include expertise in process engineering (technology development) characterize what generic strategy?

The experience curve suggests that cutting prices is a good strategy

Developing uniqueness that is not valuable is:

Differentiation provides lower margins that enable a firm to deal with supplier power.

Discuss the risks associated with each of these forms of competitive advantage-cost leadership,differentiation,and focus.