Question 1

Which of these statements regarding the industry life cycle is true?

Accepted Answer

A)  Partial power of the market life cycle is its ability to serve as a short-run forecasting device.
B)  Trends suggested by the market life cycle model are generally not reversible or repeatable.
C)  It points out the need to maintain a differentiation advantage and a low cost advantage.
D)  It is important for company generic strategies,functional areas,value-creating activities,and overall objectives.

Question 2

A firm typically achieves an absolute cost advantage by offering a ________ product or service to a ________ target market using standardization to derive the greatest benefits from economies of scale and experience.

Accepted Answer

A)  no frills;narrow
B)  complex;narrow
C)  no frills;broad
D)  complex;diverse

Question 3

Overhead costs associated with the number of layers of management in a firm are part of the ________ activities of the value chain.

Accepted Answer

A)  human resources management
B)  firm infrastructure
C)  operations
D)  marketing and sales

Question 4

An example of a firm applying the overall cost leadership generic strategy in a value-chain activity would be to automate the production assembly line to reduce scrappage from quality errors.

Accepted Answer

A) True 
 B)False

Question 5

In the ________ stage of the industry life cycle,there are few segments,the emphasis on process design is low,and the major functional areas of concern are general management and finance.

Accepted Answer

A)  introduction
B)  growth
C)  decline
D)  maturity

Question 6

If the overall cost leadership strategy is to provide sustainable competitive advantage,all activities in the value-chain need to be evaluated including the relationships among the value-chain activities.

Accepted Answer

A) True 
 B)False

Question 7

A low-cost position provides ________ flexibility to cope with demands from powerful suppliers for input cost increases.

Accepted Answer

A)  less
B)  decreasing
C)  more
D)  no

Question 8

Outside the flight experience itself,airlines are generating revenue by charging fees for credit cards,frequent-flyer programs,and access to airport lounges.This serves to

Accepted Answer

A)  increase competition.
B)  expand the profit pool.
C)  provide better customer service.
D)  satisfy regulators.

Question 9

A market that mainly competes on the basis of price and has stagnant growth is characteristic of what life cycle stage?

Accepted Answer

A)  introduction
B)  growth
C)  maturity
D)  decline

Question 10

Research has consistently shown that firms that achieve both cost leadership and differentiation advantages tend to perform

Accepted Answer

A)  at about the same level as firms that achieve either cost or differentiation advantages.
B)  about the same as firms that are stuck-in-the-middle.
C)  higher than firms that achieve either a cost or a differentiation advantage.
D)  lower than firms that achieve differentiation advantages but higher than firms that achieve cost advantages.

Question 11

Which of the following is false regarding how a differentiation strategy can help a firm to improve its competitive position relative to the Porter five-forces model?

Accepted Answer

A)  Firms will enjoy high customer loyalty.
B)  By increasing firm margins,it avoids the need for a low-cost position.
C)  It reduces buyer power because buyers lack comparable alternatives.
D)  Supplier power is increased,because suppliers will be able to charge higher prices for their inputs.

Question 12

The size of pricing and differentiation advantages between competitors decreases in which stage of the market life cycle?

Accepted Answer

A)  introduction
B)  growth
C)  maturity
D)  decline

Question 13

Caterpillar collects and analyses large volumes of data about how customers use their tractors.This permits them to ________ the cost of new product development efforts and to better ________ their products.

Accepted Answer

A)  increase;differentiate
B)  reduce;differentiate
C)  position;understand
D)  identify;disperse

Question 14

Which of the following statements about the introduction stage of the market life cycle is true?

Accepted Answer

A)  It produces relatively large,positive cash flows.
B)  Strong brand recognition seldom serves as an important switching cost.
C)  Market share gains by pioneers are usually easily sustained for many years.
D)  Products offered by pioneers may be perceived as differentiated because they are new.

Question 15

The experience curve is a factor central to an overall cost leadership strategy and refers to how business learns to increase costs as it gains experience with production processes.

Accepted Answer

A) True 
 B)False

Question 16

Primary value chain activities that involve the effective layout of receiving dock operations (inbound logistics) and support value chain activities that include expertise in process engineering (technology development) characterize which generic strategy?

Accepted Answer

A)  differentiation
B)  differentiation focus
C)  stuck-in-the-middle
D)  overall cost leadership

Question 17

Which of the following reasons is not a reason that Atlas Door could lose competitive advantage?

Accepted Answer

A)  Its technologies are non-proprietary.
B)  A rival easily could hire away its talented employees.
C)  A new rival with a strong resource base could undercut its prices.
D)  It has strong power over its distributors.

Question 18

The factors that lead to a low-cost position also provide a substantial ________ barriers position with respect to ________ products introduced by new and existing competitors.

Accepted Answer

A)  entry;substitute
B)  exit;primary
C)  product;substitute
D)  entry;primary

Question 19

Airlines such as Emirates exploit the profit pool for competitive advantage by adding fees for a variety of services such as access to airport lounges.

Accepted Answer

A) True 
 B)False

Question 20

Global logistics firms such as DHL Supply Chain and Global Forwarding or C.H.Robinson Worldwide compete using an overall cost leadership strategy in primary activities such as

Accepted Answer

A)  effective layout of receiving dock operations.
B)  effective use of automated technology to reduce scrappage rates.
C)  minimize costs associated with employee turnover through effective policies.
D)  standardized accounting practices to minimize personnel required.

Exam 5: Business-Level Strategy: Creating and Sustaining Competitive Advantages

If the overall cost leadership strategy is to provide sustainable competitive advantage,all activities in the value-chain need to be evaluated including the relationships among the value-chain activities.

Correct AnswerverifiedShow Answer

The experience curve is a factor central to an overall cost leadership strategy and refers to how business learns to increase costs as it gains experience with production processes.

Correct AnswerverifiedShow Answer

The factors that lead to a low-cost position also provide a substantial ________ barriers position with respect to ________ products introduced by new and existing competitors.

Correct AnswerverifiedShow Answer

A market that mainly competes on the basis of price and has stagnant growth is characteristic of what life cycle stage?

Correct AnswerverifiedShow Answer

Which of the following statements about the introduction stage of the market life cycle is true?

Correct AnswerverifiedShow Answer

Which of these statements regarding the industry life cycle is true?

Correct AnswerverifiedShow Answer

Overhead costs associated with the number of layers of management in a firm are part of the ________ activities of the value chain.

Correct AnswerverifiedShow Answer

A low-cost position provides ________ flexibility to cope with demands from powerful suppliers for input cost increases.

Correct AnswerverifiedShow Answer

Caterpillar collects and analyses large volumes of data about how customers use their tractors.This permits them to ________ the cost of new product development efforts and to better ________ their products.

Correct AnswerverifiedShow Answer

An example of a firm applying the overall cost leadership generic strategy in a value-chain activity would be to automate the production assembly line to reduce scrappage from quality errors.

Correct AnswerverifiedShow Answer

Airlines such as Emirates exploit the profit pool for competitive advantage by adding fees for a variety of services such as access to airport lounges.

Correct AnswerverifiedShow Answer

Which of the following is false regarding how a differentiation strategy can help a firm to improve its competitive position relative to the Porter five-forces model?

Correct AnswerverifiedShow Answer

Primary value chain activities that involve the effective layout of receiving dock operations (inbound logistics) and support value chain activities that include expertise in process engineering (technology development) characterize which generic strategy?

Correct AnswerverifiedShow Answer

The size of pricing and differentiation advantages between competitors decreases in which stage of the market life cycle?

Correct AnswerverifiedShow Answer

Which of the following reasons is not a reason that Atlas Door could lose competitive advantage?

Correct AnswerverifiedShow Answer

Research has consistently shown that firms that achieve both cost leadership and differentiation advantages tend to perform

Correct AnswerverifiedShow Answer

A firm typically achieves an absolute cost advantage by offering a ________ product or service to a ________ target market using standardization to derive the greatest benefits from economies of scale and experience.

Correct AnswerverifiedShow Answer

In the ________ stage of the industry life cycle,there are few segments,the emphasis on process design is low,and the major functional areas of concern are general management and finance.

Correct AnswerverifiedShow Answer

Outside the flight experience itself,airlines are generating revenue by charging fees for credit cards,frequent-flyer programs,and access to airport lounges.This serves to

Correct AnswerverifiedShow Answer

Global logistics firms such as DHL Supply Chain and Global Forwarding or C.H.Robinson Worldwide compete using an overall cost leadership strategy in primary activities such as

Correct AnswerverifiedShow Answer

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The factors that lead to a low-cost position also provide a substantial barriers position with respect to products introduced by new and existing competitors.

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Caterpillar collects and analyses large volumes of data about how customers use their tractors.This permits them to the cost of new product development efforts and to better their products.

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A firm typically achieves an absolute cost advantage by offering a product or service to a target market using standardization to derive the greatest benefits from economies of scale and experience.

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