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Exam 4: Business-Level Strategy

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Question 51

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Walmart's actions (Chapter 4 Strategic Focus) of becoming more upscale with the intent of taking sales away from Target provided an opening for competitors such as Amazon and Family Dollar to better compete on the basis of price and attract several of Walmart's customer.

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Question 52

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By linking companies with their suppliers, distributors, and customers, ____ provide a company with flexibility.

A) Flexible manufacturing systems
B) Information networks
C) Total quality management systems
D) Capabilities

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Question 53

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Case Scenario : Abrahamson's Jewelers. Through its sole location in an affluent suburb of San Francisco, Abrahamson's Jewelers has established a strong niche market in the upscale jewelry store segment. Abrahamson's was founded in 1871 and is currently owned and operated by John Wickersham, who bought the firm from its namesake founders in 1985. Wickersham joined the firm as a trainee out of high school, completed his gemology training, and several years later took ownership with the financial help of his parents. That debt has long been paid off and business has thrived. When he first acquired the business, Abrahamson's offered a full range of jewelry and gift items from watches to wedding sets to silverware to clocks. This broad range of products was mirrored by a broad price range-$10,000 Rolex watches were sold next to $50 Seiko watches. While some jewelry was custom designed and manufactured, most of the products were "case ready," meaning they were sourced from large jewelry and silver manufacturers from around the world. Over the last 15 years, Wickersham has narrowed the company's product offering considerably to focus only on high-end watches like Rolex and Piaget, custom jewelry, and estate jewelry. Wickersham stresses that this is an appropriate focus for his business since each of the products lends itself to relationship selling, and price rarely comes into the discussion. Despite the narrower offering moreover, Abrahamson's floor space has doubled, and clients are intensely loyal to the good taste, design skills, and personal service level provided by Mr. Wickersham. -(Refer to the above Case Scenario) While Abrahamson's is doing well, Mr. Wickersham would like to grow his business beyond the present location. He believes that growth may bring greater profitability, as well as employment avenues for his only child, who will soon be finishing high school. What recommendations do you have for Mr. Wickersham regarding his growth choices?

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

The products or services that are differentiated from others have qualities that are

Amazon has built capabilities around Internet technology and e-commerce to facilitate information exchanges with its customers in a cost effective manner. This represents which of the three service dimension?

Every firm uses all levels of strategy: corporate, acquisition and restructuring, international and cooperative.

A new generation of lunch trucks in cities such as New York, San francisco, and Los Angeles serving high-end fare such as hamburgers made from grass-fed cattle, escargot and crème brulee illustrate the focus cost leadership strategy.

The differentiation strategy is effective for products that are expensive, luxury consumer goods. It is not effective for common, inexpensive products such as doughnuts.

All of the following are considered generic business-level strategies EXCEPT

The risks of a focus strategy include

The generalized forms of value that goods and services provide are either lower cost with acceptable features or highly differentiated features with acceptable cost.

The benefit of a flexible manufacturing system is that

Three sources of flexibility in completing primary and support activities are particularly useful for firms using the integrated strategy. These are

Case Scenario : International Cow Packers. International Cow Packers (ICP) is a $12 billion meat processor (slaughter, processing, and packing). Founded in 1943, ICP has grown to become the largest beef and pork processor in the United States (revenues come 90% from beef and 10% from pork) and also has a growing export market to Japan. The company follows a focused cost-leadership strategy, delivering USDA-graded meats primarily to the institutional (schools, prisons, hospitals) and supermarket channels. ICP's entire value chain is organized to deliver volume product at the industry's lowest per-unit cost. Its supplier industries, primarily cattle and swine feedlots, have relatively little power since prices for these raw materials are determined in the commodity markets. While entry barriers to the industry are high due to high minimum start-up costs, industry rivalry is extremely intense - primarily due to the fact that three large companies (including ICP) control 80% of the market for processed meats. The threat of substitutes is high with an increasing trend for consumers to favor poultry and other non-beef proteins. Buyers are also powerful since supermarkets are relatively concentrated at a regional level and end-consumers have ample choices. -(Refer to the above Case Scenario) The focused cost-leadership strategy followed by International Cow Packers Inc. (ICP) is appropriate given the industry characteristics of low supplier power, high entry barriers, intense industry rivalry, high threat of substitutes, and powerful buyers.

Target's brand promise "Expect More. Pay Less" and appeal to higher-income, fashion conscious discount shoppers illustrates the ________________strategy

Which of the following are central to implementing value-creating strategies and thereby satisfying customers'needs?

A low-cost position in the industry is not a valuable defense against rivals when competing on the basis of price.

Business-level strategy can be thought of as the firm's core strategy.

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