MAN4720 ch. 6
A. Adopting a new strategic intent to become the champion of healthy eating.
B. Reducing costs through initiatives such as expanding its private-label offerings.
C. Emphasizing its organic food offerings as the tool to compete on price.
D. Improving its logistics system in order to improve efficiencies.
A. Who will we serve?
B. How many product markets will we be in?
C. What customer needs and desires will we satisfy?
D. Why do we want to satisfy these needs?
A. The characteristics of the industry in which a firm competes.
B. The characteristics of the firm itself.
C. The characteristics of both the industry and the firm.
D. The absolute positioning of the firm.
A. Cost and core competencies.
B. Value and cost.
C. Value and core competencies.
D. Cost and revenues.
A. Determined by its business-level strategy.
B. Created through strategic trade-offs.
C. An attempt to create a large gap between value creation and costs.
D. All of these.
A. Making strategic trade-offs.
B. Conducting a strategic group map evaluation.
C. Trying to improve the firm’s economies of scope.
D. Leveraging the low-cost position of the company.
A. Profit gap
B. Net profit
C. Value gap
D. Revenue gap
A. Allows a firm to perform similar activities differently than its rivals with resulting lower costs
B. Allows a firm to perform different activities than its rivals with greater value creation
C. Allows a firm to perform similar activities than its rivals with greater costs or lower value creation
D. Helps a firm create as large a gap as possible between the differential value created and the cost required
A. Focused cost-leadership strategy.
B. Focused differentiation strategy.
C. Market differentiation strategy.
D. Broad cost-leadership strategy.
A. Product-broad strategy.
B. Differentiation strategy.
C. Cost-leadership strategy.
D. Product-focused strategy.
A. Following a different generic business strategy within the same industry can lead to a competitive advantage for more than one organization.
B. Following the same generic business strategy can allow for two firms competing in the same industry to have a competitive advantage at the same time.
C. In order to evaluate whether Rolex has a sustained competitive advantage it is useful to compare it to Timex from a cost perspective.
D. In order to evaluate whether Timex has a sustained competitive advantage, it is useful to compare it to Rolex from a differentiation perspective.
A. Economies of scale.
B. Economies of scope.
C. Scope of competition.
D. Scope of core capabilities.
A. Whether it is competing on differentiation or cost.
B. Whether it is competing within a targeted strategic group or not.
C. Whether is has a competitive advantage or not.
D. Whether it has first-mover advantages or not.
A. Economies of scope; economies of scale
B. Five forces; economies of scope
C. Scope of competition; core capabilities
D. Strategic position; scope of competition
A. Focused differentiation; focused low-cost
B. Integration; focused low-cost
C. Integration; focused differentiation
D. Cost leadership; differentiation
B. Market segmented
A. broad low-cost
B. focused differentiation
C. focused low-cost
D. broad differentiation
A. Scope; quality
B. Quality; learning
C. Value; cost
D. Learning; experience
A. Higher prices
B. A higher willingness to pay
C. Higher costs
D. All of these
A. New product launches.
B. Cost input factors.
C. Marketing and promotion.
D. Unique product features.
A. Interface would lower profit margins to absorb this cost increase
B. The company would launch an all-out effort to reduce other costs by 12%.
C. Interface would pass a major portion of this increase along as a price increase to its customers.
D. Interface would seek to find other materials with lower costs, even if it meant losing the carbon-neutral label on the product.
A. The economic value that the firm creates is equal to that of the competition.
B. The economic value that the firm creates is greater than that of the competition.
C. The economic value that is created is less than that of the competition.
D. The economic value that is created is dependent on strategic parity.
A. The firm’s ability to move into a new strategic group.
B. The firm’s ability to charge higher prices.
C. The firm’s ability to charge lower prices.
D. The firm’s ability to leverage complements.
A. Co-opetition; complements
B. Learning-curve effects; co-opetition
C. Customer service; complements
D. Economies of scale; co-opetition
A. Turn differentiated products into standardized products with price parity.
B. Turn differentiated products into standardized products with price disadvantages.
C. Turn commodity products into differentiated products with price disadvantages.
D. Turn commodity products into differentiated products with premium pricing.
A. Increase perceived value and decrease costs.
B. Improve value chain activities and increase costs.
C. Achieve a low-cost position and maintain perceived value.
D. Achieve cost parity and maintain perceived value.
A. Toyota used the value driver of customer service when it called each owner individually for recommended repairs.
B. By exceeding customer expectations, Toyota turned a serious threat into an opportunity by establishing brand reputation for superior customer service.
C. Toyota’s customer responsiveness enabled the firm to influence early adopters who became opinion leaders for influencing others to purchase a Lexus.
D. Since the Lexus recall of the 1990s, Toyota leveraged firm experience effects and has successfully maintained quality leadership in the automobile industry with no major challenges.
A. A product differentiation strategy with complements as a value driver.
B. A product differentiation strategy with customization as a value driver.
C. A focused cost leadership with economies of scale as a cost driver.
D. A focused cost leadership with economies of learning as a cost driver.
A. Five forces activities
B. Strategic group activities
C. Value chain activities
D. Economic chain activities
A. The economic value that is created is less than that of the competition.
B. The economic value that the firm creates is equal to that of the competition.
C. The economic value that the firm creates is greater than that of the competition.
D. The economic value that is created is dependent on strategic parity.
A. Buyers will be reluctant to pay for a product unless the quality is acceptable.
B. Buyers will be reluctant to pay for a product unless the quality is superior.
C. Buyers will be reluctant to pay for the product unless it is customized.
D. Product quality is more important in a broad market than in a narrow one.
A. Economies of scale
B. Cost of input factors
C. Experience-curve effects
D. Learning-curve effects
A. Controlling the cost of inputs.
B. Leveraging economies of scale.
C. Offering products that have superior value.
D. Learning by doing.
A. Creating value that is lower than the competition.
B. Creating value that is higher than the competition.
C. Creating the same value as the competition.
D. Creating products that are highly differentiated relative to the competition.
A. GM and Hyundai have both achieved differentiation parity and competitive advantages.
B. GM has achieved differentiation parity and a competitive advantage over Hyundai.
C. Hyundai has achieved differentiation parity and a competitive advantage over GM.
D. Neither GM nor Hyundai have achieved differentiation parity since they are not in the same strategic group.
A. The firm is then able to target a less price-sensitive customer market.
B. Creating the same value as the competition, combined with lower costs, gives the firm a competitive advantage.
C. The firm is then able to incorporate differentiating features that cause buyers to prefer its products.
D. All of these.
A. Creating value generally means higher costs.
B. Achieving parity in the market is always hard.
C. Cost leaders typically add too much value to their products.
D. Value chain activities should not be altered.
A. Its differentiation appeal is in parity with the competition.
B. Its costs are higher than the competition.
C. Its economic value creation exceeds that of the competition.
D. Its economic value creation is the same as the competition.
A. Lower manufacturing costs.
B. Lower production costs.
C. Lower supplier costs.
D. Lower overall costs.
A. Access to unique features that turn commodities into differentiated products.
B. Access to lower-cost input factors including raw materials and labor.
C. Creating personalized customer service in order to minimize price-sensitivity.
D. Shifting to small-scale production processes in order to create customized products.
A. Economies of scope
B. Diseconomies of scale
C. Economies of efficiency
D. Economies of scale
A. Microsoft has a competitive advantage because it has already spent the capital required for its new offering.
B. Microsoft has a competitive advantage because it will be able to drive down per-unit costs of Windows 7 with each additional copy it sells.
C. Since Microsoft will sell so many units of Windows 7, it has attained competitive parity within its strategic group.
D. Microsoft will be at a competitive disadvantage unless it exceeds its sales forecasts because its marginal costs will change.
A. Increasing capital investments in input factors
B. Producing two or more outputs using common resources
C. Taking advantage of certain physical properties
D. Spreading marginal costs over smaller units
A. They have both broad and narrow economies of scope.
B. They are able to take advantage of physical properties and maximize their scale efficiencies by stocking more merchandise and handling inventory more efficiently.
C. They are able to take advantage of market size and spread investment losses over many locations.
D. They have been able to protect themselves from the threat of buyer power by increasing input prices.
A. External economies
B. Diseconomies of scale
C. Economic inefficiencies
D. Integration diseconomies
A. A learning curve.
B. An output curve.
C. A demand curve.
D. A distribution curve
A. Every time the cumulative output increases by 80%, the cost per unit will decrease by 20%.
B. Every time the cumulative output is doubled, the cost per unit will decline by 80%.
C. Every time the cumulative output goes up 20%, the cost per unit will decline by 80%.
D. Every time the cumulative output is doubled, the cost per unit will decline by 20%.
B. Economies of scale
C. Economies of scope
D. Competitive position
A. Competition is based on product features, suppliers may increase costs, and buyers have bargaining power.
B. Competition is based on product features, suppliers have very limited power, and buyers have bargaining power.
C. Price competition is vigorous, suppliers may increase costs, and buyers have bargaining power.
D. Price competition is vigorous, suppliers have very limited power, and buyers have bargaining power.
A. Competition switches from customer service to pricing.
B. When technological innovations open up cost reductions for substitutes or competitors.
C. New entrants are all start-up firms with low volumes.
D. Suppliers request a 2% price increase across the industry.
A. The firm has intangible resources, supplier cost increases can be passed on to the customer, and equivalent substitutes are readily available.
B. The firm has tangible resources, supplier cost increases can be passed on to the customer, and equivalent substitutes are readily available.
C. The firm has tangible resources, supplier cost increases can be passed on to the customer, and the differentiation appeal creates customer loyalty.
D. The firm has intangible resources, supplier cost increases can be passed on to the customer, and the differentiation appeal creates customer loyalty.
A. When the focus of competition switches to price rather than features and new acceptable levels of quality have emerged due to innovation.
B. When the focus of competition switches to price rather than features and the substitute products are considered below acceptable levels of quality.
C. When the focus of competition switches to features rather than price, the substitute products are considered below acceptable levels of quality.
D. When the focus of competition switches to features rather than price and new acceptable levels of quality have emerged due to innovation.
A. Buyers will be willing to pay for value that is not perceived.
B. Buyers will be reluctant to pay for value that is not perceived.
C. Perceived value is not as important as the price of the product.
D. Perceived value is more important in a broad market than in a narrow one.
A. Combining high quality and product features to provide service that customers truly value.
B. Using a first-mover advantage to be the lowest price in the market.
C. Winning market share with a highly differentiated product.
D. Beating rivals on product attributes while offering a better price.
A. Avon has successfully moved from a differentiation to a cost-leadership strategy.
B. Avon has a competitive advantage because it has the features customers value most in the cosmetics industry.
C. Avon has successfully achieved an integration strategy and has a competitive advantage because it has higher value creation.
D. Avon is the low cost leader of the cosmetics industry with their “sell at home” sales approach.
A. Service-oriented and low cost.
B. Product-oriented and high cost.
C. High cost and commodity.
D. Low cost and differentiation.
C. Economies of scope
D. Structure, culture, and routines
A. Cost; value
B. Cost; core capability
C. Value; core capability
D. Market; economic
A. It helps a firm resolve existing trade-offs between price and quality.
B. Without innovation a firm can get “stuck in the middle.”
C. Innovation is the most important component regardless of strategy.
D. It is the only way that a firm can improve its value chain activities.
B. Learning-curve effects
C. Economies of scope
D. Strategic trade-offs
A. Boundary spanning
B. Channel communication
A. Gives customers more perceived value while exceeding their price expectation.
B. Allows a firm to make strategic trade-offs effectively.
C. Enables a firm to increase value creation while keeping costs in check.
D. All of these.
A. That a firm could lose sight of its mission.
B. That this strategy is easy for rivals to imitate.
C. That the firm may get “stuck in the middle.”
D. That it is ineffective when competing on a global scale.
A. Buy Us is successful in creating an integration strategy positioned between Walmart and Target.
B. Buy Us is “stuck in the middle” and has a competitive disadvantage.
C. Buy Us is still creating an integration strategy positioned between Walmart and Target and is on the right track. It should continue this business strategy.
D. Buy Us is “stuck in the middle” and has a competitive advantage.
A. The intent of an integration strategy is not to be the absolute lowest-cost provider because of the added costs of increased value in its products/service.
B. A successful integration strategy requires that the business be the lowest-cost provider in order to drive higher value creation than the competition.
C. Economy of scale is more important to an integrator, while economy of scope is more important to a low-cost strategy.
D. An integration strategy requires first that the business be stuck in the middle, while a low-cost strategy avoids this condition.
A. Planning to move the Jaguar business unit from differentiated to an integration strategy.
B. Pursuing the Chinese market with the Land Rover acquisition.
C. Pursuing both a focused differentiation strategy and a focused cost-leadership strategy.
D. Planning to move the Nano business unit from low-cost to an integration strategy.
D. Linked integrative
A. Value-cost frontier.
B. Productivity frontier.
C. Economies of scope.
D. Strategic intent.
A. Determination; strategic intent
B. Economies; flexibility
C. Effectiveness; efficiency
D. Innovation; culture
A. There has been relatively little change in the positions of these firms from 2005 to 2010.
B. Apple is the only one of the three to remain on the productivity frontier from 2005 to 2010
C. HP’s position has declined on the frontier from 2005 to 2010.
D. Dell has improved its position on the frontier from 2005 to 2010.
A. It represents possible strategic positions a firm can take.
B. It reflects the relationship between strategic positions, value creation, and costs.
C. It helps a firm determine cost-differentiation trade-offs.
D. It reflects which global markets will be the most productive to pursue in the future.
A. Because any strategic tool that a manager has at their disposal is useful.
B. Because strategic positioning is dynamic and firms have to refine their positions over time.
C. Because a firm always wants to stay behind the productivity frontier.
D. Because a firm wants to make sure it is ahead of best practices.
A. All of the business strategies are equally difficult to adopt.
B. Only a few exceptional firms are able to balance the value-cost strategic trade-offs and adopt an integration strategy successfully.
C. Once a firm has established itself with a strategy, it should stick with what it knows.
D. Strategic positioning is not as critical to competitive advantage as is the firm’s resources and economic environment.
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