Question 1

Firms implementing cost leadership strategies often sell no-frills standardized goods or services to the industry's most typical customers.

Accepted Answer

A) True 
 B)False

Question 2

The risks of a differentiation strategy do NOT include which of the following?

Accepted Answer

A)   Customers may find the price differential between the low-cost producer and the differentiated product too large.
B)   Customers' learning can narrow a customer's perception of the value of a firm's differentiated features.
C)   The means of differentiation no longer provide value to the customer.
D)   The differentiation strategy is built on product features that the customer values.

Question 3

Describe a cost leadership strategy and its risks.

Accepted Answer

In a cost leadership strategy,the produc...

Question 4

Firms can be most effective if they develop business-level strategies that will serve the needs of the "average customer."

Accepted Answer

A) True 
 B)False

Question 5

Business-level strategies are concerned with a firm's ability to reach its maximum profit potential.

Accepted Answer

A) True 
 B)False

Question 6

The risks of a cost leadership strategy include:

Accepted Answer

A)   becoming "stuck in the middle."
B)   production and distribution processes becoming obsolete.
C)   the ability of competing firms to provide similar features in a product.
D)   customers deciding the product isn't worth what the firm must charge for it.

Question 7

The differentiation strategy can be effective in controlling the power of rivalry in an industry because:

Accepted Answer

A)   customers will seek out the lowest cost product.
B)   customers have no loyalty.
C)   customers are loyal to brands that are differentiated in meaningful ways.
D)   the differentiation strategy benefits from rivalry.

Question 8

The functional structure is most appropriate for larger firms implementing a strategy that includes high levels of diversification.

Accepted Answer

A) True 
 B)False

Question 9

Wal-Mart's effective strategy/structure configuration is:

Accepted Answer

A)   cost leadership/functional structure.
B)   related-linked/SBU multidivisional structure.
C)   unrelated diversification/competitive form multidivisional structure.
D)   cost leadership/differentiation/functional structure.

Question 10

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

Accepted Answer

Rivalry: Having the low-cost position se...

Question 11

Human Resources and other support activities are not value-creating activities in the value chain,only the primary activities create value.

Accepted Answer

A) True 
 B)False

Question 12

The effectiveness of any of the generic business-level strategies is contingent upon:

Accepted Answer

A)   customer needs and competitors' strategies.
B)   the firm's resources,capabilities,and core competencies and the opportunities/threats of the environment.
C)   product line scope and national economic conditions.
D)   management's leadership style and the wealth of the firm's target market.

Question 13

Business-level strategies are concerned specifically with:

Accepted Answer

A)   creating differences between the firm's position and its rivals.
B)   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.

Question 14

A ____ reflects where and how the firm has an advantage over its rivals.

Accepted Answer

A)   business-level strategy
B)   strategy
C)   differentiated-cost strategy
D)   core competence profile

Question 15

SAS Institute is the world's largest privately owned software company.Its core competence is ____ on which it allocates over 30 percent of its revenues.

Accepted Answer

A)   research and development
B)   marketing and sales
C)   employee training
D)   inbound and outbound logistics

Question 16

The risks of the differentiation strategy include:

Accepted Answer

A)   being "stuck in the middle."
B)   other firms being able to match the low cost.
C)   customers being willing to pay a premium for the features.
D)   a decision that the differentiated features are not worth the price.

Question 17

Which of the following is an assumption of TQM systems?

Accepted Answer

A)   The costs of poor quality are greater than costs of developing new processes to produce high quality products.
B)   Total quality of processes requires total control of employees by management.
C)   Quality and costs are tradeoffs.
D)   Finding the "one best way" and adhering to it results in continuously improving quality.

Question 18

A differentiator's premium price is typically less than that of a cost leader.

Accepted Answer

A) True 
 B)False

Question 19

The means to differentiate a product is limited to only three central issues.

Accepted Answer

A) True 
 B)False

Question 20

A business-level strategy reflects a firm's beliefs about what products and services it should be offering to customers,how to manufacture or create them,and how to distribute them to the marketplace.

Accepted Answer

A) True 
 B)False

Exam 5: Business-Level Strategy

The functional structure is most appropriate for larger firms implementing a strategy that includes high levels of diversification.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedRivalry: Having the low-cost position se...View AnswerShow Answer

SAS Institute is the world's largest privately owned software company.Its core competence is ____ on which it allocates over 30 percent of its revenues.

Correct AnswerverifiedShow Answer

Human Resources and other support activities are not value-creating activities in the value chain,only the primary activities create value.

Correct AnswerverifiedShow Answer

Describe a cost leadership strategy and its risks.

Correct AnswerverifiedIn a cost leadership strategy,the produc...View AnswerShow Answer

The risks of a cost leadership strategy include:

Correct AnswerverifiedShow Answer

A ____ reflects where and how the firm has an advantage over its rivals.

Correct AnswerverifiedShow Answer

The effectiveness of any of the generic business-level strategies is contingent upon:

Correct AnswerverifiedShow Answer

A differentiator's premium price is typically less than that of a cost leader.

Correct AnswerverifiedShow Answer

Firms implementing cost leadership strategies often sell no-frills standardized goods or services to the industry's most typical customers.

Correct AnswerverifiedShow Answer

Business-level strategies are concerned specifically with:

Correct AnswerverifiedShow Answer

Which of the following is an assumption of TQM systems?

Correct AnswerverifiedShow Answer

The means to differentiate a product is limited to only three central issues.

Correct AnswerverifiedShow Answer

The risks of the differentiation strategy include:

Correct AnswerverifiedShow Answer

Business-level strategies are concerned with a firm's ability to reach its maximum profit potential.

Correct AnswerverifiedShow Answer

Firms can be most effective if they develop business-level strategies that will serve the needs of the "average customer."

Correct AnswerverifiedShow Answer

The differentiation strategy can be effective in controlling the power of rivalry in an industry because:

Correct AnswerverifiedShow Answer

A business-level strategy reflects a firm's beliefs about what products and services it should be offering to customers,how to manufacture or create them,and how to distribute them to the marketplace.

Correct AnswerverifiedShow Answer

The risks of a differentiation strategy do NOT include which of the following?

Correct AnswerverifiedShow Answer

Wal-Mart's effective strategy/structure configuration is:

Correct AnswerverifiedShow Answer

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Rivalry: Having the low-cost position se...
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In a cost leadership strategy,the produc...
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