Question 1

Which of the following is TRUE?

Accepted Answer

A)  As customer loyalty increases, customers are more sensitive to price increases. 
B)  Customer loyalty has a positive relationship with firm profitability. 
C)  Customer loyalty is fragile and cannot reliably be considered a factor in firm success. 
D)  Customer loyalty is of importance only to firms using the differentiation strategy. 
A)  As customer loyalty increases, customers are more sensitive to price increases. 
B)  Customer loyalty has a positive relationship with firm profitability. 
C)  Customer loyalty is fragile and cannot reliably be considered a factor in firm success. 
D)  Customer loyalty is of importance only to firms using the differentiation strategy. B

Question 2

A company using a narrow target market in its business strategy is:

Accepted Answer

A)  following a cost leadership business strategy. 
B)  focusing on a broad array of geographic markets. 
C)  limiting the group of customer segments served. 
D)  decreasing the number of activities on its value chain. 
A)  following a cost leadership business strategy. 
B)  focusing on a broad array of geographic markets. 
C)  limiting the group of customer segments served. 
D)  decreasing the number of activities on its value chain. C

Question 3

Describe the additional risks undertaken by firms pursuing a focus strategy.

Accepted Answer

Focus firms face three additional risks beyond the general risks of industry-wide strategies. First, a competitor may be able to focus on a more narrowly defined competitive segment and "outfocus" the focuser. Second, a firm competing on an industry-wide basis may decide the targeted market segment is attractive and worthy of competitive pursuit. Finally, the needs of the firm's customer group may become more similar to the needs of industry-wide customers as a whole, thereby eliminating the advantages of a focus strategy.

Question 4

The three dimensions of a firm's relationships with customers include all the following EXCEPT:

Accepted Answer

A)  exclusiveness. 
B)  affiliation. 
C)  richness. 
D)  reach. 
A)  exclusiveness. 
B)  affiliation. 
C)  richness. 
D)  reach.

Question 5

The Monteleone Company pays large fees to a highly recognizable, prestigious individual to be the spokesperson for the company's products, luxury private jets. Monteleone is probably following the:

Accepted Answer

A)  focused cost leadership strategy. 
B)  focused differentiation strategy. 
C)  integrated cost leadership/differentiation strategy. 
D)  total quality strategy. 
A)  focused cost leadership strategy. 
B)  focused differentiation strategy. 
C)  integrated cost leadership/differentiation strategy. 
D)  total quality strategy.

Question 6

The term "stuck in the middle":

Accepted Answer

A)  means adhering to a middle of the road strategy in the face of negative outcomes. 
B)  indicates that the customers of the firm are willing to pay only a mid-range price for the product. 
C)  reflects the fact that the customers of the firm have only moderate expectations regarding product quality. 
D)  means that the firm's cost structure is not low enough to allow it to attractively price its products and that its products are not sufficiently differentiated to create value for its target customer. 
A)  means adhering to a middle of the road strategy in the face of negative outcomes. 
B)  indicates that the customers of the firm are willing to pay only a mid-range price for the product. 
C)  reflects the fact that the customers of the firm have only moderate expectations regarding product quality. 
D)  means that the firm's cost structure is not low enough to allow it to attractively price its products and that its products are not sufficiently differentiated to create value for its target customer.

Question 7

A cost leadership strategy provides goods or services with features that are:

Accepted Answer

A)  acceptable. 
B)  unique. 
C)  substandard. 
D)  mediocre. 
A)  acceptable. 
B)  unique. 
C)  substandard. 
D)  mediocre.

Question 8

Which of the following is NOT a value-creating activity associated with the differentiation strategy?

Accepted Answer

A)  Developing policies to ensure efficient hiring and retention to keep costs low and implement training to ensure high employee efficiency. 
B)  Providing accurate and timely delivery of goods to customers. 
C)  Ensuring receipt of high quality supplies (raw materials and other goods). 
D)  Developing flexible systems that allow rapid response to customers' changing needs. 
A)  Developing policies to ensure efficient hiring and retention to keep costs low and implement training to ensure high employee efficiency. 
B)  Providing accurate and timely delivery of goods to customers. 
C)  Ensuring receipt of high quality supplies (raw materials and other goods). 
D)  Developing flexible systems that allow rapid response to customers' changing needs.

Question 9

Ever-improving levels of efficiency enhance profit margins for a cost-leader. This effects which of the five forces of industry structure most directly?

Accepted Answer

A)  Potential entrants 
B)  Substitutes 
C)  Buyer power 
D)  Supplier power 
A)  Potential entrants 
B)  Substitutes 
C)  Buyer power 
D)  Supplier power

Question 10

Walmart's change in strategy to attract more upscale customers will likely succeed because cost leaders are good at differentiating.

Accepted Answer

A) True 
 B)False

Question 11

Starbuck's determined that all of the following customer needs were important EXCEPT:

Accepted Answer

A)  low price. 
B)  the experience associated with drinking coffee, not just the coffee. 
C)  the actual product of service (e.g., a cup of coffee), not the experience. 
D)  allowing customer to design their own drinks. 
A)  low price. 
B)  the experience associated with drinking coffee, not just the coffee. 
C)  the actual product of service (e.g., a cup of coffee), not the experience. 
D)  allowing customer to design their own drinks.

Question 12

J.C. Penney attempted the strategy ______ . But it couldn't out ______ Walmart, nor could it ______ Macy's and Target.

Accepted Answer

A)  of integrated cost leadership; price; compete with 
B)  of focused differentiation; cost; differentiate between 
C)  of cost leadership; cost; differentiate between 
D)  of focused cost leadership; price; differentiate between 
A)  of integrated cost leadership; price; compete with 
B)  of focused differentiation; cost; differentiate between 
C)  of cost leadership; cost; differentiate between 
D)  of focused cost leadership; price; differentiate between

Question 13

Because of its focus on innovation and quality manufacturing, Total Quality Management is not useful for firms that follow a cost leadership strategy.

Accepted Answer

A) True 
 B)False

Question 14

A nationwide chain of pet stores wishes to identify the tradeoffs that its customers are willing to make between low-cost products such as generic pet foods and differentiated features such as pick-up and delivery of pets for grooming. The best technique for this firm to learn this information would be to use:

Accepted Answer

A)  information networks. 
B)  a flexible manufacturing system. 
C)  differentiation development planning. 
D)  Enterprise Resource Planning. 
A)  information networks. 
B)  a flexible manufacturing system. 
C)  differentiation development planning. 
D)  Enterprise Resource Planning.

Question 15

Hyundai allows customers to return their cars if they lose their job within 12 months of purchase. Which of the following aspects of managing customer relationships is Hyundai engaged in?

Accepted Answer

A)  Who: Determining the Customers to Serve 
B)  What: Determining Which Customer Needs to Satisfy 
C)  How: Determining Core Competencies Necessary to satisfy Customer Needs 
D)  When: Determining When to Satisfy Customer Needs 
A)  Who: Determining the Customers to Serve 
B)  What: Determining Which Customer Needs to Satisfy 
C)  How: Determining Core Competencies Necessary to satisfy Customer Needs 
D)  When: Determining When to Satisfy Customer Needs

Question 16

In the animal food products business, food-product needs of owners of companion animals pets (e.g., dogs and cats) differ from the needs for food and health-related products of those owning production animals (e.g., livestock). Which of the following aspects of managing customer relationships does this choice refer to?

Accepted Answer

A)  Who: Determining the Customers to Serve 
B)  What: Determining Which Customer Needs to Satisfy 
C)  How: Determining Core Competencies Necessary to satisfy Customer Needs 
D)  When: Determining When to Satisfy Customer Needs 
A)  Who: Determining the Customers to Serve 
B)  What: Determining Which Customer Needs to Satisfy 
C)  How: Determining Core Competencies Necessary to satisfy Customer Needs 
D)  When: Determining When to Satisfy Customer Needs

Question 17

Firms implementing cost leadership strategies often sell no-frills standardized goods or services (but with competitive levels of differentiation) to the industry's most typical customers.

Accepted Answer

A) True 
 B)False

Question 18

Low-cost leaders usually concentrate on the value chain activities of inbound logistics and outbound logistics as a means to reduce costs.

Accepted Answer

A) True 
 B)False

Question 19

To position itself differently from competitors, a firm must decide to either perform activities differently or to perform different activities.

Accepted Answer

A) True 
 B)False

Question 20

When firms use core competencies to implement value-creating strategies they are answering the "______" question.

Accepted Answer

A)  who 
B)  what 
C)  why 
D)  how 
A)  who 
B)  what 
C)  why 
D)  how

Which of the following is TRUE?

A company using a narrow target market in its business strategy is:

Describe the additional risks undertaken by firms pursuing a focus strategy.

The three dimensions of a firm's relationships with customers include all the following EXCEPT:

The Monteleone Company pays large fees to a highly recognizable, prestigious individual to be the spokesperson for the company's products, luxury private jets. Monteleone is probably following the:

The term "stuck in the middle":

A cost leadership strategy provides goods or services with features that are:

Which of the following is NOT a value-creating activity associated with the differentiation strategy?

Ever-improving levels of efficiency enhance profit margins for a cost-leader. This effects which of the five forces of industry structure most directly?

Walmart's change in strategy to attract more upscale customers will likely succeed because cost leaders are good at differentiating.

Starbuck's determined that all of the following customer needs were important EXCEPT:

J.C. Penney attempted the strategy . But it couldn't out Walmart, nor could it __ Macy's and Target.

Because of its focus on innovation and quality manufacturing, Total Quality Management is not useful for firms that follow a cost leadership strategy.

Hyundai allows customers to return their cars if they lose their job within 12 months of purchase. Which of the following aspects of managing customer relationships is Hyundai engaged in?

Firms implementing cost leadership strategies often sell no-frills standardized goods or services (but with competitive levels of differentiation) to the industry's most typical customers.

Low-cost leaders usually concentrate on the value chain activities of inbound logistics and outbound logistics as a means to reduce costs.

To position itself differently from competitors, a firm must decide to either perform activities differently or to perform different activities.

When firms use core competencies to implement value-creating strategies they are answering the "______" question.

Strategic Management and Strategic Competitiveness

The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis

The Internal Organization: Resources, Capabilities, Core Competencies, and Competitive Advantages

Competitive Rivalry and Competitive Dynamics

Corporate-Level Strategy

Merger and Acquisition Strategies

International Strategy

Cooperative Strategy

Corporate Governance

Organizational Structure and Controls

Strategic Leadership

Strategic Entrepreneurship

Filters

Exam 4: Business-Level Strategy

Which of the following is TRUE?

A company using a narrow target market in its business strategy is:

Describe the additional risks undertaken by firms pursuing a focus strategy.

The three dimensions of a firm's relationships with customers include all the following EXCEPT:

The Monteleone Company pays large fees to a highly recognizable, prestigious individual to be the spokesperson for the company's products, luxury private jets. Monteleone is probably following the:

The term "stuck in the middle":

A cost leadership strategy provides goods or services with features that are:

Which of the following is NOT a value-creating activity associated with the differentiation strategy?

Ever-improving levels of efficiency enhance profit margins for a cost-leader. This effects which of the five forces of industry structure most directly?

Walmart's change in strategy to attract more upscale customers will likely succeed because cost leaders are good at differentiating.

Starbuck's determined that all of the following customer needs were important EXCEPT:

J.C. Penney attempted the strategy ______ . But it couldn't out ______ Walmart, nor could it ______ Macy's and Target.

Because of its focus on innovation and quality manufacturing, Total Quality Management is not useful for firms that follow a cost leadership strategy.

Hyundai allows customers to return their cars if they lose their job within 12 months of purchase. Which of the following aspects of managing customer relationships is Hyundai engaged in?

Firms implementing cost leadership strategies often sell no-frills standardized goods or services (but with competitive levels of differentiation) to the industry's most typical customers.

Low-cost leaders usually concentrate on the value chain activities of inbound logistics and outbound logistics as a means to reduce costs.

To position itself differently from competitors, a firm must decide to either perform activities differently or to perform different activities.

When firms use core competencies to implement value-creating strategies they are answering the "______" question.

Strategic Management and Strategic Competitiveness

The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis

The Internal Organization: Resources, Capabilities, Core Competencies, and Competitive Advantages

Competitive Rivalry and Competitive Dynamics

Corporate-Level Strategy

Merger and Acquisition Strategies

International Strategy

Cooperative Strategy

Corporate Governance

Organizational Structure and Controls

Strategic Leadership

Strategic Entrepreneurship

Filters

J.C. Penney attempted the strategy . But it couldn't out Walmart, nor could it __ Macy's and Target.