Question 1

The term value innovation is used to describe:

Accepted Answer

A)  the way a company decides to group customers based on important differences in their needs to gain a competitive advantage.
B)  a business's overall competitive theme, the way it positions itself in the marketplace to gain a competitive advantage, and the different positioning strategies that can be used in different industry settings.
C)  what happens when innovation pushes out the efficiency frontier in an industry, allowing for greater value to be offered through superior differentiation at a lower cost than was previously thought possible.
D)  what happens when a company decides to ignore different segments, and produce a standardized product for the average consumer.
E)  what happens when a company decides to serve many segments, or even the entire market, producing different offerings for different segments. C

Question 2

A differentiated company is protected from intense price rivalry within its industry by its brand loyalty.

Accepted Answer

A) True 
 B)False  True

Question 3

Info Tech,Inc.makes complex telecommunications products,such as cellular telephones.Since this company has a distinctive competency in research and development,it should try to differentiate its product through:

Accepted Answer

A)  reliability.
B)  innovation.
C)  advertising.
D)  service.
E)  low pricing. B

Question 4

In which of the following situations is a differentiation strategy used?

Accepted Answer

A)  The industry is fragmented into customer groups based on needs.
B)  Customer needs are primarily satisfied by the price of the product.
C)  A company's cost structure needs to be reduced.
D)  There is a demand for deep price discounts from powerful buyers.
E)  The industry is not allowed to charge a premium price for its products.

Question 5

The advantage that focused companies have over their broad market rivals is that they:

Accepted Answer

A)  can sells on non-price factors, such as design or customer service.
B)  can respond to demands for deep price discounts.
C)  sell fewer products in bulk to outsell their rivals.
D)  can initiate a price war in order to grow volume and drive its weaker rivals out of the industry.
E)  can absorb cost increases that may be passed on downstream by powerful suppliers.

Question 6

Which of the following is NOT a generic business-level strategy?

Accepted Answer

A)  Broad differentiation strategy
B)  Broad low-cost strategy
C)  Focused low-cost strategy
D)  Focused differentiation strategy
E)  Focused innovation strategy

Question 7

Lucy's Swimwear Boutique offers swimwear that is targeted at affluent people who can afford to buy expensive,handmade swimsuits.Which of the following approaches to market segmentation is Lucy's Swimwear Boutique using?

Accepted Answer

A)  Broad differentiation strategy
B)  Low market segmentation
C)  Medium market segmentation strategy
D)  Broad high-cost strategy
E)  Focus differentiation strategy

Question 8

The way a product is differentiated from other products of its type and the price of the product determine which product a customer chooses to satisfy his or her needs.

Accepted Answer

A) True 
 B)False

Question 9

Production of a large product variety without a large cost penalty is known as:

Accepted Answer

A)  market concentration.
B)  market segmentation.
C)  focused differentiation.
D)  mass production.
E)  mass customization.

Question 10

A company has a competitive advantage if it can increase costs relative to rivals.

Accepted Answer

A) True 
 B)False

Question 11

Compared to a differentiator,the company that follows a low-cost strategy:

Accepted Answer

A)  distinguishes its products from those of rivals by offering something that they find hard to match.
B)  absorbs cost increases by powerful suppliers while keeping to their lower pricing.
C)  allows the company to charge a premium price for its good or service.
D)  uses perceived superior value to generate growth in demand among customers.
E)  creates entry barriers for rivals with greater brand loyalty to the specific products offered.

Question 12

A company pursuing a low-cost strategy:

Accepted Answer

A)  Improves non-price factors such as design and customer service
B)  Produces a basic offering to reduce cost structures
C)  Keeps advertising expenses at a maximum
D)  Relies on patent protections to keep costs low
E)  Customizes marketing mix to different market segments

Question 13

Which of the following is NOT a principal danger of a low-cost position approach?

Accepted Answer

A)  Powerful buyers
B)  Technological change
C)  Imitation of production techniques
D)  Changes in consumer tastes
E)  Rivals lowering their costs

Question 14

A low-cost position is most appropriate when:

Accepted Answer

A)  the power of buyers is low and barriers to entry are high.
B)  economies of scale are relatively unimportant in manufacturing products.
C)  customers have very different needs and uses for the industry's products.
D)  product innovation is the key competitive factor.
E)  industry rivalry is high and customers are very sensitive to prices.

Question 15

When a company decides to serve a limited number of segments,or just one segment,it is pursuing a segmentation strategy.

Accepted Answer

A) True 
 B)False

Question 16

When a company produces a wide range of products for various customer groups,it is following a _____ strategy.

Accepted Answer

A)  cost leadership
B)  differentiation
C)  customer retention
D)  market concentration
E)  share building

Question 17

List the features that need to be included in functional strategies to improve differentiation.

Accepted Answer

The answer of List the features that need to be...

Question 18

Which of the following generic business-level strategies is based on the intent to lower costs so that a company can lower prices and still make a profit?

Accepted Answer

A)  Broad low-cost strategy
B)  Price differentiation strategy
C)  Broad differentiation strategy
D)  Focused differentiation strategy
E)  Focused low-cost strategy

Question 19

Standardization describes what happens when innovation pushes out the efficiency frontier in an industry,allowing for greater value to be offered through superior differentiation at a lower cost than was previously thought possible.

Accepted Answer

A) True 
 B)False

Question 20

Describe how business-level strategies give a company a competitive advantage over actual and potential rivals.

Accepted Answer

The answer of Describe how business-level strategies give a company...

Exam 5: Business Level Strategy

The term value innovation is used to describe:

A differentiated company is protected from intense price rivalry within its industry by its brand loyalty.

Info Tech,Inc.makes complex telecommunications products,such as cellular telephones.Since this company has a distinctive competency in research and development,it should try to differentiate its product through:

In which of the following situations is a differentiation strategy used?

The advantage that focused companies have over their broad market rivals is that they:

Which of the following is NOT a generic business-level strategy?

Lucy's Swimwear Boutique offers swimwear that is targeted at affluent people who can afford to buy expensive,handmade swimsuits.Which of the following approaches to market segmentation is Lucy's Swimwear Boutique using?

The way a product is differentiated from other products of its type and the price of the product determine which product a customer chooses to satisfy his or her needs.

Production of a large product variety without a large cost penalty is known as:

A company has a competitive advantage if it can increase costs relative to rivals.

Compared to a differentiator,the company that follows a low-cost strategy:

A company pursuing a low-cost strategy:

Which of the following is NOT a principal danger of a low-cost position approach?

A low-cost position is most appropriate when:

When a company decides to serve a limited number of segments,or just one segment,it is pursuing a segmentation strategy.

When a company produces a wide range of products for various customer groups,it is following a _____ strategy.

List the features that need to be included in functional strategies to improve differentiation.

Which of the following generic business-level strategies is based on the intent to lower costs so that a company can lower prices and still make a profit?

Standardization describes what happens when innovation pushes out the efficiency frontier in an industry,allowing for greater value to be offered through superior differentiation at a lower cost than was previously thought possible.

Describe how business-level strategies give a company a competitive advantage over actual and potential rivals.