Exam 6: Business Strategy: Differentiation, Cost Leadership, and Blue Oceans

Starfish Sodas has successfully achieved a competitive advantage in the soft drink industry as a differentiator. Which of the following scenarios would undermine Starfish's position?

The pursuit of both differentiation and low cost at the same time in a way that creates a leap in value for both the firm and consumers is called

When a firm combines experience based learning and process innovation, the firm

When a firm operates at the minimum efficient scale, there is still opportunity for it to further reduce its cost per unit through economies of scale.

Which of the following examples uses a focused differentiation strategy?

A cost leader is the firm most likely to survive a price war.

What does it mean for a firm to have an 80 percent learning curve?

The goal of the differentiator is to have a smaller value gap than competitors.

Which of the following best describes a strategic trade-off?

What is required for a blue ocean strategy to succeed?

When Simple Semiconductors was operating at the minimum efficient scale of 10,000-12,000 units per month, the firm's cost per unit was $45. However, when the output level was increased beyond 12,000 units, the cost per unit increased to $47. This increase was attributed to the wear-and-tear of the machinery, and complexities of managing and coordinating. What is this phenomenon known as?

Which of the following sources of differential appeal is least effective in helping a firm sustain its advantage?

What are the key questions managers must answer to formulate an appropriate business-level strategy?

Thomas is the owner of a landscaping company that caters to a very wealthy clientele. His company has struggled to differentiate itself from the other high-end landscapers in the area, but because he has hired several expensive but highly-qualified team members, Thomas is unable to shift to a cost leadership strategy. Which strategy is most likely to achieve a competitive advantage?

Which of the following is a firm effect that has an impact on the competitive advantage of a firm?

A differentiation strategy works best when a

Gilroy Crackers enjoys a competitive advantage as a cost leader because high demand for its products has allowed it to operate at the minimum efficient scale. Which of the following scenarios would be most concerning to the managers of Gilroy Crackers?

Differentiation and cost leadership strategies are only effective in manufacturing industries.

When wireless service providers offer free or discounted mobile phones for subscriptions to their wireless voice and data service, the perceived value of the service offering increases. In this case, the value driver would be

Combining economies of learning with the existing production technology allows a firm to