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Exam 4: Business Level Strategy

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Question 21

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What are the risks of an integrated cost leadership/differentiation strategy?

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Integrated strategies present risks that...

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Question 22

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Business-level strategies are concerned specifically with

A) creating differences between the firm's position and its competitors.
B) selecting the industries in which the firm will compete.
C) how functional areas will be organized within the firm.
D) how a business with multiple physical locations will operate one of those locations.

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Question 23

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Discuss how a cost leadership strategy can allow a firm to earn above-average returns in spite of strong competitive forces. Address each of the five competitive forces.

A risk of a focus strategy is that the needs of the customer within a narrow competitive segment may become more similar to those needs of customers in the whole market.

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

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

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

Companies without the core competencies in their value chain activities and and support functions are still able to implement successfully a either a cost leadership or a differentiation strategy, although they cannot implement an integrated cost leadership/differentiation strategy.

When a firm is able to produce nonstandardized (that is, distinctive) products for customers who value differentiated features more than they value low cost, the firm is successfully implementing

When the costs of supplies increase in an industry, the low-cost leader

Effective use of the generic business strategies allows the firm to favorably position itself relative to the five forces.

A river barge company can offer cheaper, although slower, per pound transportation of products to companies when compared with transportation by air, truck, or rail. The river barge company should first target customers whose companies use

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

Which of the following is TRUE?

An entrepreneur is investigating starting a company that provides tax advice to small companies. In order to position his company differently from the existing competitors, the entrepreneur must

All of the following are ways that a good or service can be differentiated EXCEPT

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

The hazard of getting "stuck in the middle" applies to firms using any business strategy.

Case Scenario 1: 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 Case Scenario 1) The supplier industries of International Cow Packers (ICP), primarily cattle and swine feedlots, are powerful because prices for these supplies are determined in the commodity markets.

Starbuck's (Chapter 4 Opening Case) was able to revolutionize the coffee drining experience throug its business level strategy of