Question 1

A differentiation strategy is based on creating a product that customers perceive as being:

Accepted Answer

A)  the same as other available products.
B)  distinct from other available products.
C)  the least costly product in the industry.
D)  the most costly product in the industry.
E)  cheaper, but inferior to the available products.

Question 2

The efficiency frontier is not static; it is continually being pushed outwards by the efforts of managers to improve their firm's performance through innovation.

Accepted Answer

A) True 
 B)False

Question 3

A product's appeal to customers' desires cannot be considered a source of differentiation.

Accepted Answer

A) True 
 B)False

Question 4

The basic proposition of the blue ocean strategy is that many successful companies have built their competitive advantage by:

Accepted Answer

A)  redefining their product offering through value innovation and creating a new market space.
B)  initiating a price war in order to grow volume and drive its weaker rivals out of the industry.
C)  developing brand loyalty to protect them from intense price rivalry within their industry.
D)  charging premium prices for their goods or services.
E)  adopting lean production and flexible manufacturing technologies.

Question 5

Delta Airlines used to advertise its high-quality air travel service by saying it flew "anywhere,anytime." What generic strategy is represented by this advertisement?

Accepted Answer

A)  Broad low-cost
B)  Broad differentiation
C)  Vertical integration
D)  Right-time marketing
E)  Rapid growth

Question 6

The main difference between companies following a broad low-cost strategy and those following a focus low-cost strategy is in the:

Accepted Answer

A)  standardized market price.
B)  industry life cycle stage.
C)  degree of market segmentation.
D)  age of the market.
E)  market trajectory.

Question 7

A firm's business model should contain three components: what is to be satisfied,who is to be satisfied,and how they will be satisfied.

Accepted Answer

A) True 
 B)False

Question 8

When a company targets a certain segment or niche,and customizes its offering to the needs of that particular segment through the addition of features and functions,the company is pursuing a _____ strategy.

Accepted Answer

A)  broad low-cost
B)  broad differentiation
C)  product substitution
D)  focus low-cost
E)  focus differentiation

Question 9

Differentiation leads to high brand loyalty,which in turn significantly increases the threat of new firms entering the industry.

Accepted Answer

A) True 
 B)False

Question 10

Define the generic business-level strategies companies pursue.

Accepted Answer

There are four generic business-level st...

Question 11

Yankee Candle Company offers customers candles that burn for 50-60 hours,much longer than most department store candle brands.Therefore,customers are willing to pay a higher price for these candles.Which of the following strategies is Yankee Candle Company following?

Accepted Answer

A)  Cost leadership
B)  Rapid growth
C)  Market segmentation
D)  Differentiation
E)  Stuck in the middle

Question 12

All focus strategies entail serving a specific market segment using a differentiation approach.

Accepted Answer

A) True 
 B)False

Question 13

A market segment consists of a group of:

Accepted Answer

A)  similar products.
B)  customers who have similar needs.
C)  products that are considered obsolete.
D)  diverse products produced by the same manufacturer.
E)  customers who have diverse needs.

Question 14

Differentiation can help a company to grow overall demand and capture market share from its rivals.

Accepted Answer

A) True 
 B)False

Question 15

The basic proposition of the blue ocean strategy is that many successful companies have built their competitive advantage by initiating price wars and driving weaker rivals out of the industry.

Accepted Answer

A) True 
 B)False

Question 16

Companies with a differentiation advantage tend to charge a lower price for their products.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements is true of differentiation and cost structure?

Accepted Answer

A)  Differentiation and cost structure decisions affect one another.
B)  Differentiation and cost structure decisions do not affect one another.
C)  Companies that focus on the higher-value end of the market have a lower cost structure.
D)  Differentiation decisions do not affect a company's profitability.
E)  Cost structure decisions do not affect a company's profitability.

Question 18

Which of the following generic competitive strategies is a producer of commodity steel most likely to pursue?

Accepted Answer

A)  Exclusive dealing
B)  Broad differentiation
C)  Focus differentiation
D)  Broad low-cost
E)  Horizontal integration

Question 19

One of the great advantages of successful value innovation is that it can catch rivals off guard and make it difficult for them to catch up.

Accepted Answer

A) True 
 B)False

Question 20

When a company recognizes that the needs of one market segment is not the same as another and accordingly customizes its product offerings,it is said to be pursuing:

Accepted Answer

A)  stuck-in-the-middle strategy.
B)  rapid-growth strategy.
C)  differentiation strategy.
D)  focus strategy.
E)  low-cost strategy.

Exam 5: Business Level Strategy

Which of the following generic competitive strategies is a producer of commodity steel most likely to pursue?

Correct AnswerverifiedShow Answer

Yankee Candle Company offers customers candles that burn for 50-60 hours,much longer than most department store candle brands.Therefore,customers are willing to pay a higher price for these candles.Which of the following strategies is Yankee Candle Company following?

Correct AnswerverifiedShow Answer

A firm's business model should contain three components: what is to be satisfied,who is to be satisfied,and how they will be satisfied.

Correct AnswerverifiedShow Answer

Differentiation leads to high brand loyalty,which in turn significantly increases the threat of new firms entering the industry.

Correct AnswerverifiedShow Answer

A market segment consists of a group of:

Correct AnswerverifiedShow Answer

Delta Airlines used to advertise its high-quality air travel service by saying it flew "anywhere,anytime." What generic strategy is represented by this advertisement?

Correct AnswerverifiedShow Answer

One of the great advantages of successful value innovation is that it can catch rivals off guard and make it difficult for them to catch up.

Correct AnswerverifiedShow Answer

All focus strategies entail serving a specific market segment using a differentiation approach.

Correct AnswerverifiedShow Answer

A differentiation strategy is based on creating a product that customers perceive as being:

Correct AnswerverifiedShow Answer

The efficiency frontier is not static; it is continually being pushed outwards by the efforts of managers to improve their firm's performance through innovation.

Correct AnswerverifiedShow Answer

Which of the following statements is true of differentiation and cost structure?

Correct AnswerverifiedShow Answer

The basic proposition of the blue ocean strategy is that many successful companies have built their competitive advantage by initiating price wars and driving weaker rivals out of the industry.

Correct AnswerverifiedShow Answer

Companies with a differentiation advantage tend to charge a lower price for their products.

Correct AnswerverifiedShow Answer

A product's appeal to customers' desires cannot be considered a source of differentiation.

Correct AnswerverifiedShow Answer

The main difference between companies following a broad low-cost strategy and those following a focus low-cost strategy is in the:

Correct AnswerverifiedShow Answer

The basic proposition of the blue ocean strategy is that many successful companies have built their competitive advantage by:

Correct AnswerverifiedShow Answer

Define the generic business-level strategies companies pursue.

Correct AnswerverifiedThere are four generic business-level st...View AnswerShow Answer

Differentiation can help a company to grow overall demand and capture market share from its rivals.

Correct AnswerverifiedShow Answer

When a company recognizes that the needs of one market segment is not the same as another and accordingly customizes its product offerings,it is said to be pursuing:

Correct AnswerverifiedShow Answer

When a company targets a certain segment or niche,and customizes its offering to the needs of that particular segment through the addition of features and functions,the company is pursuing a _____ strategy.

Correct AnswerverifiedShow Answer

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There are four generic business-level st...
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