Business Strategy Chapter 5 Quiz

11 October 2022
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20 test answers
question
A low-cost provider strategy works quite well when
answer
the products of rival sellers are essentially identical and readily available from many eager sellers, a big fraction of the industry's sales are made to large-volume buyers with significant power to bargain down prices, and it is hard to achieve product differentiation in ways that have value to buyers
question
For all types of competitive strategies, success in sustaining the intended competitive edge over rivals depends on having
answer
at least some unique and valuable resources/capabilities that are either (1) hard for rivals to duplicate or (2) hard to develop offsetting close substitute resources/capabilities
question
Which of the following is not one of the pitfalls of a low-cost provider strategy?
answer
Failing to slash price far enough below what rivals are charging to achieve dramatically large gains in sales volume and market share
question
The essence of a broad differentiation strategy is to
answer
offer unique product attributes that a wide range of buyers find appealing and worth paying for (because of the value they deliver)
question
The two biggest factors that distinguish one competitive strategy from another concern
answer
whether a company's market target is broad or narrow and whether the company is pursuing a competitive advantage linked to low costs or differentiation
question
A broad differentiation strategy enhances company profitability whenever
answer
a company's product can command a sufficiently higher price or generate sufficiently bigger unit sales to more than cover the added costs of achieving the differentiation
question
The risks of a focused strategy do not include which one of the following?
answer
the potential for buyer needs and uses the product to become even more diverse
question
Broad differentiation strategies are well-suited for market circumstances where
answer
there are may ways to differentiate the product or service that have value to buyers
question
One way a company can translate a low-cost advantage over rivals into attractive profit performance is by
answer
using its lower-cost edge to underprice competitors and attract price-sensitive buyers in great enough numbers to increase total profits
question
The pitfalls of a differentiation strategy include
answer
differentiating on the basis of attributes that produce an unenthusiastic response on the part of buyers (because they do not perceive the differentiating features as valuable or worth paying for)
question
Which of the following statements about a best-cost provider strategy is false?
answer
A best-cost provider strategy aims at attracting buyers on the basis of having the industry's overall best-performing product and charging a price that is slightly below the industry-average price
question
A company achieves low-cost leadership when
answer
it becomes the industry's low-cost provider rather than just being one of perhaps several competitors with comparatively low costs.
question
Best-cost provider strategies
answer
aim at a competitive advantage based on giving customers the best value for the money - success hinges on developing the capability to incorporate attractive upscale attributes at a lower cost than those rivals with comparable upscale product offerings, thereby putting the company in a position to underprice rivals with similar-caliber product offerings
question
Which of the following is not one of the ways that a company can achieve a cost advantage by revamping its value chain?
answer
Improving product design and production techniques and striving hard to operate all production facilities at full capacity
question
A focused low-cost strategy seeks to achieve competitive advantage by
answer
serving buyers in the target market niche at a lower cost and lower price than rival competitors- this requires out-managing rivals in using the cost drivers to perform value chain activities more cost efficiently and/or finding innovate ways to bypass non-essential value chain activities
question
In which one of the following instances is a focused strategy keyed either to low-cost or differentiation not likely to work well?
answer
Most buyers use the product in the same ways, the products of rival sellers are essentially identical and readily available from many eager sellers, and price competition among rival sellers is vigorous
question
The most appealing approaches to differentiation are those that
answer
are hard or expensive for rivals to duplicate- easy -to-copy differentiating features cannot produce sustainable competitive advantage
question
A "cost driver" is a factor that
answer
has a strong influence on a company's costs
question
The generic types of competitive strategies include
answer
low-cost provider strategies, focused low-cost strategies, best-cost provider strategies, broad differentiation strategies, and focused differentiation strategies
question
Which of the following is not an action that a company can take to do a better job than rivals of performing value chain activities more cost-effectively?
answer
Shifting to the use of technologies and/or information systems that bypass the need to perform 20% or more of the company''s primary value chain activities
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question
A low-cost provider strategy works quite well when
answer
the products of rival sellers are essentially identical and readily available from many eager sellers, a big fraction of the industry's sales are made to large-volume buyers with significant power to bargain down prices, and it is hard to achieve product differentiation in ways that have value to buyers
question
For all types of competitive strategies, success in sustaining the intended competitive edge over rivals depends on having
answer
at least some unique and valuable resources/capabilities that are either (1) hard for rivals to duplicate or (2) hard to develop offsetting close substitute resources/capabilities
question
Which of the following is not one of the pitfalls of a low-cost provider strategy?
answer
Failing to slash price far enough below what rivals are charging to achieve dramatically large gains in sales volume and market share
question
The essence of a broad differentiation strategy is to
answer
offer unique product attributes that a wide range of buyers find appealing and worth paying for (because of the value they deliver)
question
The two biggest factors that distinguish one competitive strategy from another concern
answer
whether a company's market target is broad or narrow and whether the company is pursuing a competitive advantage linked to low costs or differentiation
question
A broad differentiation strategy enhances company profitability whenever
answer
a company's product can command a sufficiently higher price or generate sufficiently bigger unit sales to more than cover the added costs of achieving the differentiation
question
The risks of a focused strategy do not include which one of the following?
answer
the potential for buyer needs and uses the product to become even more diverse
question
Broad differentiation strategies are well-suited for market circumstances where
answer
there are may ways to differentiate the product or service that have value to buyers
question
One way a company can translate a low-cost advantage over rivals into attractive profit performance is by
answer
using its lower-cost edge to underprice competitors and attract price-sensitive buyers in great enough numbers to increase total profits
question
The pitfalls of a differentiation strategy include
answer
differentiating on the basis of attributes that produce an unenthusiastic response on the part of buyers (because they do not perceive the differentiating features as valuable or worth paying for)
question
Which of the following statements about a best-cost provider strategy is false?
answer
A best-cost provider strategy aims at attracting buyers on the basis of having the industry's overall best-performing product and charging a price that is slightly below the industry-average price
question
A company achieves low-cost leadership when
answer
it becomes the industry's low-cost provider rather than just being one of perhaps several competitors with comparatively low costs.
question
Best-cost provider strategies
answer
aim at a competitive advantage based on giving customers the best value for the money - success hinges on developing the capability to incorporate attractive upscale attributes at a lower cost than those rivals with comparable upscale product offerings, thereby putting the company in a position to underprice rivals with similar-caliber product offerings
question
Which of the following is not one of the ways that a company can achieve a cost advantage by revamping its value chain?
answer
Improving product design and production techniques and striving hard to operate all production facilities at full capacity
question
A focused low-cost strategy seeks to achieve competitive advantage by
answer
serving buyers in the target market niche at a lower cost and lower price than rival competitors- this requires out-managing rivals in using the cost drivers to perform value chain activities more cost efficiently and/or finding innovate ways to bypass non-essential value chain activities
question
In which one of the following instances is a focused strategy keyed either to low-cost or differentiation not likely to work well?
answer
Most buyers use the product in the same ways, the products of rival sellers are essentially identical and readily available from many eager sellers, and price competition among rival sellers is vigorous
question
The most appealing approaches to differentiation are those that
answer
are hard or expensive for rivals to duplicate- easy -to-copy differentiating features cannot produce sustainable competitive advantage
question
A "cost driver" is a factor that
answer
has a strong influence on a company's costs
question
The generic types of competitive strategies include
answer
low-cost provider strategies, focused low-cost strategies, best-cost provider strategies, broad differentiation strategies, and focused differentiation strategies
question
Which of the following is not an action that a company can take to do a better job than rivals of performing value chain activities more cost-effectively?
answer
Shifting to the use of technologies and/or information systems that bypass the need to perform 20% or more of the company''s primary value chain activities