Question 1

Best-cost provider strategies are appealing in those market situations where:

Accepted Answer

A)   diverse buyer preferences make product differentiation the norm and where a large number of value-conscious buyers can be induced to purchase mid-range products.
B)   a company is positioned between competitors who have ultra-low prices and competitors who have top-notch products in terms of both quality and performance.
C)   buyers are more quality-conscious than price-conscious.
D)   there are numerous buyer segments,buyer needs are diverse across these segments,only a few of the segments are growing rapidly,and seller's products are strongly differentiated.
E)   buyers are more performance-conscious than value-conscious.F) C) and D)
G) A) and D)

Question 2

How valuable a low-cost leader's cost advantage is depends on:

Accepted Answer

A)   whether it is easy or inexpensive for rivals to copy the low-cost leader's methods or otherwise match its low costs.
B)   how easy it is for the low-cost leader to gain the biggest market share.
C)   the aggressiveness with which the low-cost leader pursues converting the cost advantage into the absolute lowest possible costs.
D)   the leader's ability to combine the cost advantage with a reputation for good quality.
E)   the low-cost leader's ability to be the industry leader in manufacturing innovation so as to keep lowering its manufacturing costs.F) D) and E)
G) C) and D)

Question 3

A competitive strategy to be the low-cost provider in an industry works well when:

Accepted Answer

A)   price competition among rival sellers is especially sluggish.
B)   there are numerous ways to achieve product differentiation that have no value to buyers.
C)   buyers incur high costs in switching their purchases from one seller/brand to another.
D)   industry newcomers use introductory low prices to attract buyers and build a customer base.
E)   industry newcomers use high introductory prices to let buyers know they have a superior product to build a customer base.F) None of the above
G) D) and E)

Question 4

There are several basic approaches to competing successfully and gaining a competitive advantage over rivals,such as:

Accepted Answer

A)   finding effective and efficient ways to strengthen the company's competitive assets and to reduce its competitive liabilities.
B)   delivering more value to its customers than rivals or delivering value more efficiently than rivals (or both) .
C)   getting in the best strategic group and establishing a dominating role.
D)   entering into strategic alliances,utilizing mergers or acquisitions to strengthen its market position,outsourcing some in-house activities to outside specialists,and integrating forward or backward.
E)   All of these.F) C) and E)
G) A) and D)

Question 5

The major avenues for achieving a cost advantage over rivals include:

Accepted Answer

A)   performing value chain activities more cost-effectively than rivals or revamping the firm's overall value chain to eliminate or bypass some cost-producing activities.
B)   having a management team that is highly skilled in cutting costs.
C)   being a first-mover in adopting the latest state-of-the-art technologies,especially those relating to low-cost manufacture.
D)   outsourcing high-cost activities to cost-efficient vendors.
E)   paying lower wages and salaries than rivals.F) A) and B)
G) B) and D)

Question 6

What is the difference between a low-cost leadership strategy and a focused low-cost strategy?

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A low-cost leadership strategy and a foc...

Question 7

The generic types of competitive strategies include:

Accepted Answer

A)   market share growth provider,sales revenue leader strategy,and market share retention strategy.
B)   offensive strategies,defensive strategies and counter maneuvers strategies.
C)   low-cost provider,broad differentiation,best-cost provider,focused low-cost and focused differentiation strategies.
D)   low-cost/low-price strategies,high-quality/high-price strategies,and medium quality/medium price strategies.
E)   price leader strategies,price follower strategies,technology leader strategies,and first-mover strategies.F) A) and B)
G) A) and C)

Question 8

For a best-cost provider strategy to be successful,a company must have:

Accepted Answer

A)   excellent marketing and sales skills in convincing buyers to pay a premium price for the attributes/features incorporated in its product.
B)   resource strengths and competitive capabilities that allow it to incorporate upscale attributes at lower costs than rivals whose products have similar upscale attributes.
C)   access to greater learning/experience curve effects and scale economies than rivals.
D)   one of the best-known and most respected brand names in the industry.
E)   a short,low-cost value chain.F) D) and E)
G) B) and D)

Question 9

A competitive strategy of striving to be the low-cost provider is particularly attractive when:

Accepted Answer

A)   buyers are not very brand-conscious.
B)   most rivals are trying to be best-cost providers.
C)   there are many ways to achieve product differentiation that have value to buyers.
D)   most buyers use the product in much the same ways,with user requirements calling for a standardized product.
E)   most rivals are pursuing focused low-cost or focused differentiation strategies.F) All of the above
G) C) and E)

Question 10

The keys to maintaining a broad differentiation strategy are:

Accepted Answer

A)   to stress constant innovation to stay ahead of imitative rivals and to concentrate on a few differentiating features.
B)   to charge a premium price that more than covers the extra costs of differentiating features and to convince customers to be brand loyal.
C)   to out-innovate and out-advertise rivals.
D)   to emphasize personalized customer service and to add as many differentiating features as possible.
E)   to keep prices close to the average of all rivals and to spend heavily on new product R&D.F) A) and D)
G) All of the above

Question 11

A pitfall to avoid in pursuing a differentiation strategy is:

Accepted Answer

A)   trying to differentiate on the basis of attributes or features that are easily and quickly copied.
B)   choosing a product offering that supports buyer's indifference to rival brands' offerings.
C)   charging a premium price for the differentiating features.
D)   meeting and exceeding the meaningful gaps in quality,performance,service,and other attractive differentiating attributes offered by rivals.
E)   spending on activities to differentiate the company's product offering to enhance profitability.F) C) and E)
G) A) and B)

Question 12

What market conditions and circumstances make a low-cost provider strategy attractive? What are the pitfalls in pursuing a low-cost provider strategy? What can go wrong?

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The answer of What market conditions and circumstances make a...

Question 13

Explain how the strategic target of a low-cost provider differs from the strategic target of a best-cost provider.

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The answer of Explain how the strategic target of a...

Question 14

The underlying criteria of a best-cost provider strategy usually is found in the ability of a company to:

Accepted Answer

A)   offer similar goods at more attractive prices.
B)   create attributes that appeal specifically to niche members.
C)   lower overall costs more than rivals in serving niche members.
D)   offer buyers something attractively different from competitors' offerings.
E)   None of these.F) B) and C)
G) A) and B)

Question 15

A broad differentiation strategy improves profitability when:

Accepted Answer

A)   it is focused on product innovation.
B)   differentiating enhances product performance and quality.
C)   the differentiating features appeal to sophisticated and prestigious buyers.
D)   the higher price the product commands exceeds the added costs of achieving the differentiation.
E)   the differentiator charges a price that is only fractionally higher than the industry's low-cost provider.F) A) and C)
G) B) and D)

Question 16

What type of competitive advantage does a best-cost provider strategy aim at achieving? Explain what a company has to do to achieve this advantage.

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The answer of What type of competitive advantage does a...

Question 17

Which of the following is NOT one of the pitfalls of pursuing a differentiation strategy?

Accepted Answer

A)   Over-emphasizing efforts to strongly differentiate the company's product from those of rivals rather than be content with weak product differentiation
B)   Offer trivial improvements in quality,service,or performance features
C)   Overcharging for the differentiating features
D)   Adding so many frills and extra features that the product exceeds the needs of buyers
E)   Overspending on efforts to differentiate the company's product offeringF) A) and E)
G) C) and D)

Question 18

What are the keys to sustaining a focused low-cost strategy?

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The answer of What are the keys to sustaining a...

Question 19

A broad differentiation strategy works best in situations where:

Accepted Answer

A)   technological change is slow-paced and new or improved products are infrequent.
B)   buyer needs and uses of the product are very similar.
C)   buyers incur low costs in switching their purchases to rival brands.
D)   buyers have a low degree of bargaining power and purchase the product frequently.
E)   technological change is fast-paced and competition revolves around rapidly evolving product features.F) A) and C)
G) A) and B)

Question 20

Which one of the five generic competitive strategies is most likely to be best suited for an industry whose product is a commodity? Explain.

Accepted Answer

The answer of Which one of the five generic competitive...

Exam 5: The Five Generic Competitive Strategies: Which One to Employ

What market conditions and circumstances make a low-cost provider strategy attractive? What are the pitfalls in pursuing a low-cost provider strategy? What can go wrong?

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A broad differentiation strategy improves profitability when:

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A pitfall to avoid in pursuing a differentiation strategy is:

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The major avenues for achieving a cost advantage over rivals include:

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Which one of the five generic competitive strategies is most likely to be best suited for an industry whose product is a commodity? Explain.

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A competitive strategy to be the low-cost provider in an industry works well when:

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The generic types of competitive strategies include:

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A broad differentiation strategy works best in situations where:

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How valuable a low-cost leader's cost advantage is depends on:

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For a best-cost provider strategy to be successful,a company must have:

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Best-cost provider strategies are appealing in those market situations where:

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The underlying criteria of a best-cost provider strategy usually is found in the ability of a company to:

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A competitive strategy of striving to be the low-cost provider is particularly attractive when:

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What are the keys to sustaining a focused low-cost strategy?

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The keys to maintaining a broad differentiation strategy are:

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What type of competitive advantage does a best-cost provider strategy aim at achieving? Explain what a company has to do to achieve this advantage.

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Explain how the strategic target of a low-cost provider differs from the strategic target of a best-cost provider.

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There are several basic approaches to competing successfully and gaining a competitive advantage over rivals,such as:

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Which of the following is NOT one of the pitfalls of pursuing a differentiation strategy?

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What is the difference between a low-cost leadership strategy and a focused low-cost strategy?

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A low-cost leadership strategy and a foc...
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