Question 1

A producer of commodity steel should pursue which of the following generic competitive strategies?

Accepted Answer

A)   Growth
B)   Differentiation
C)   Focus
D)   Cost leadership
E)   Profit

Question 2

Which of the following is not a generic competitive strategy?

Accepted Answer

A)   Cost leadership
B)   Differentiation
C)   Focused cost leadership
D)   Focused differentiation
E)   Innovation

Question 3

Info Tech,Inc.makes complex telecommunications products,such as cellular telephones.Because 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 price.

Question 4

Cost leadership 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 5

Clothing companies Aeropostale and Forever 21 compete for the same group of customers which consists of females aged 18-24.These two companies would be part of different strategic groups because they use different marketing strategies to reach their customers.

Accepted Answer

A) True 
 B)False

Question 6

A large company produces a variety of clothing for different customer groups.This firm is pursuing which of the following strategies?

Accepted Answer

A)   Cost leadership
B)   Differentiation
C)   Both cost and differentiation
D)   Focus
E)   Share building

Question 7

Which of the following statements is true?

Accepted Answer

A)   Differentiation and cost structure decisions affect one another.
B)   Differentiation and cost structure decisions do not affect one another.
C)   Differentiation and cost structure decisions have little effect on a company's profitability.
D)   Differentiation decisions do not affect a company's profitability.
E)   Cost structure decisions do not affect a company's profitability.

Question 8

Apple,Amazon.com,and eBay have used the Internet as a way to become broad differentiators.

Accepted Answer

A) True 
 B)False

Question 9

What does the broad differentiation business model look like and how can this model benefit companies that employ it?

Accepted Answer

Broad differentiation is a business mode...

Question 10

A disadvantage of pursuing a cost leadership strategy is that

Accepted Answer

A)   technological change can make production methods obsolete.
B)   price wars make it hard to compete with differentiators.
C)   it costs more than a differentiation strategy because of the necessity of high capital investments.
D)   powerful buyers are a major threat.
E)   no quality control exists.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Maximizing the profitability of a company's business model is about making the right choices with regard to value creation through differentiation,costs,and pricing given both the demand conditions in the company's market and the competitive conditions in the company's industry.

Accepted Answer

A) True 
 B)False

Question 13

A cost leader could reasonably be expected to reduce costs by developing distinctive competencies in all but

Accepted Answer

A)   manufacturing.
B)   materials management.
C)   marketing and sales.
D)   information technology.
E)   learning organizational structure.

Question 14

The three generic business-level strategies are cost leadership,differentiation,and mass marketing.

Accepted Answer

A) True 
 B)False

Question 15

When a company services the broad market and has a low degree of product differentiation,it is most likely

Accepted Answer

A)   pursuing a cost-leadership strategy.
B)   pursuing a differentiation strategy.
C)   pursuing a focus strategy.
D)   stuck in the middle.
E)   pursuing both cost leadership and differentiation.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

At The Luxury Hotel in Miami,Florida,three hotel employees serve the needs of each guest.In every room,a guest can summon a chef,a maid,or a valet by pressing a button at bedside.Which generic business-level strategy is The Luxury Hotel utilizing?

Accepted Answer

A)   Cost leadership
B)   Differentiation
C)   Focus
D)   Strategic group
E)   Brand loyalty

Question 18

The principal dangers of a cost leadership approach include all of the following except

Accepted Answer

A)   powerful buyers.
B)   technological change.
C)   imitation of production techniques.
D)   changes in consumer tastes.
E)   rivals lowering their costs.

Question 19

In which of the following situations does a differentiation strategy make the most sense?

Accepted Answer

A)   The industry is fragmented into different customer groups, each of which has different needs.
B)   Customer needs are primarily satisfied by the price of the product.
C)   There is a lot of technological change.
D)   There are low barriers to entry and exit.
E)   The industry is in the maturity stage of the life cycle.

Question 20

The most expensive competitive strategy to pursue is

Accepted Answer

A)   differentiation.
B)   cost leadership.
C)   focus.
D)   growth.
E)   hypercompetition.

Exam 5: Building Competitive Advantage Through Business-Level Strategy

Which of the following statements is true?

Correct AnswerverifiedShow Answer

In which of the following situations does a differentiation strategy make the most sense?

Correct AnswerverifiedShow Answer

Cost leadership is most appropriate when

Correct AnswerverifiedShow Answer

A cost leader could reasonably be expected to reduce costs by developing distinctive competencies in all but

Correct AnswerverifiedShow Answer

What does the broad differentiation business model look like and how can this model benefit companies that employ it?

Correct AnswerverifiedBroad differentiation is a business mode...View AnswerShow Answer

Apple,Amazon.com,and eBay have used the Internet as a way to become broad differentiators.

Correct AnswerverifiedShow Answer

Maximizing the profitability of a company's business model is about making the right choices with regard to value creation through differentiation,costs,and pricing given both the demand conditions in the company's market and the competitive conditions in the company's industry.

Correct AnswerverifiedShow Answer

The most expensive competitive strategy to pursue is

Correct AnswerverifiedShow Answer

A producer of commodity steel should pursue which of the following generic competitive strategies?

Correct AnswerverifiedShow Answer

The principal dangers of a cost leadership approach include all of the following except

Correct AnswerverifiedShow Answer

At The Luxury Hotel in Miami,Florida,three hotel employees serve the needs of each guest.In every room,a guest can summon a chef,a maid,or a valet by pressing a button at bedside.Which generic business-level strategy is The Luxury Hotel utilizing?

Correct AnswerverifiedShow Answer

Clothing companies Aeropostale and Forever 21 compete for the same group of customers which consists of females aged 18-24.These two companies would be part of different strategic groups because they use different marketing strategies to reach their customers.

Correct AnswerverifiedShow Answer

A large company produces a variety of clothing for different customer groups.This firm is pursuing which of the following strategies?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is not a generic competitive strategy?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When a company services the broad market and has a low degree of product differentiation,it is most likely

Correct AnswerverifiedShow Answer

A disadvantage of pursuing a cost leadership strategy is that

Correct AnswerverifiedShow Answer

The three generic business-level strategies are cost leadership,differentiation,and mass marketing.

Correct AnswerverifiedShow Answer

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Broad differentiation is a business mode...
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