Question 1

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

Accepted Answer

delivering more value to its customers than rivals or delivering value more efficiently than rivals (or both).

Question 2

A company\'s competitive strategy deals with:

Accepted Answer

the specifics of management\'s game plan for competing successfullyâits specific efforts to please customers, strengthen its market position, counter the maneuvers of rivals, respond to shifting market conditions, and achieve a particular kind of competitive advantage.

Question 3

While there are many routes to competitive advantage, the two biggest factors that distinguish one competitive strategy from another involves:

Accepted Answer

whether a company\'s target market is broad or narrow and whether the company is pursuing a competitive advantage linked to low costs or differentiation.

Question 4

Whatever strategic approach is adopted by a company to deliver value, it nearly always:

Accepted Answer

requires performing value chain activities differently than rivals and building competitively valuable resources and capabilities that rivals cannot readily match or trump.

Question 5

The biggest and most important differences among the competitive strategies of different companies boil down to:

Accepted Answer

whether a company\'s market target is broad or narrow and whether the company is pursuing a competitive advantage linked to low cost or differentiation.

Question 6

Which of the following is NOT one of the five generic types of competitive strategy?

Accepted Answer

A market share dominator strategy

Question 7

The generic types of competitive strategies include:

Accepted Answer

low-cost provider, broad differentiation, best-cost provider, focused low-cost and focused differentiation strategies.

Question 8

Which one of the following generic types of competitive strategy is typically the \"best\" strategy for a company to employ?

Accepted Answer

One that is customized to fit the macro-environment, industry and competitive conditions, and the company\'s own resources and competitive capabilities

Question 9

A low-cost leader\'s basis for competitive advantage is:

Accepted Answer

meaningfully lower overall costs than rivals on comparable products.

Question 10

Low-cost leaders, who have the lowest industry costs, are exceptionally good at finding ways to drive costs out of their businesses and still provide a product or service that buyers find acceptable:

Accepted Answer

positioned to deliver affordable luxury products at mass market quality.

Question 11

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

Accepted Answer

whether it is easy or inexpensive for rivals to copy the low-cost leader\'s methods or otherwise match its low costs.

Question 12

A low-cost leader translates its low-cost advantage over rivals into superior profit performance by:

Accepted Answer

either using its lower-cost edge to under-price competitors and attract price-sensitive buyers in great enough numbers to increase total profits or maintain the present price, and using the lower-cost edge to earn a higher profit margin on each unit sold, thereby raising total profits and overall return on investment.

Question 13

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

Accepted Answer

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.

Question 14

To succeed with a low-cost provider strategy, company managers have to:

Accepted Answer

do two things: (1) perform value chain activities more cost-effectively than rivals, and (2) act proactively in revamping the firm\'s overall value chain to eliminate or bypass \"nonessential\" cost-producing activities.

Question 15

Achieving a cost advantage over rivals entails:

Accepted Answer

performing value chain activities more cost-effectively than rivals and finding ways to eliminate or bypass some cost-producing activities altogether.

Question 16

A factor that has a strong influence on a company\'s costs is termed:

Accepted Answer

a cost driver.

Question 17

Which of the following is NOT an action that a company can take to do a better job than rivals of performing value chain activities more cost-effectively?

Accepted Answer

Eliminate product features that might have market appeal, but excessively increase production costs

Question 18

Cost-efficient management of a company\'s overall value chain activities requires that management:

Accepted Answer

ferret out cost-saving opportunities in every part of the value chain.

Question 19

Which of the following is NOT one of the ways that a company can achieve cost-efficient management of its value chain activities?

Accepted Answer

Striving to ensure a corporate diversity policy is introduced with effective controls

Question 20

The culture of a company can be a cost-efficient value chain activity because it can:

Accepted Answer

allow for safeguarding internalized operating benefits.

Question 21

Which of the following is NOT one of the ways that a company can achieve a cost advantage by revamping its value chain?

Accepted Answer

Increasing production capacity and then striving hard to operate at full capacity

Question 22

An example of how companies can revamp their value chain to reduce costs is:

Accepted Answer

to increase service availability while reducing staffing requirements.

Question 23

Success in achieving a low-cost edge over rivals comes from:

Accepted Answer

out-managing rivals in finding ways to perform value chain activities faster, more accurately, and more cost efficiently.

Question 24

While low-cost providers are champions of frugality, they:

Accepted Answer

seldom hesitate to spend aggressively on resources and capabilities that promise to drive costs out of the business.

Question 25

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

Accepted Answer

most buyers use the product in much the same ways, with user requirements calling for a standardized product.

Question 26

Being the overall low-cost provider in an industry has the attractive advantage of:

Accepted Answer

putting a firm in the best position to win the business of price-sensitive customers, set the floor on market price, and still earn a profit.

Question 27

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

Accepted Answer

industry newcomers use introductory low prices to attract buyers and build a customer base.

Question 28

A competitive strategy predicated on low-cost leadership tends to work best when:

Accepted Answer

price competition among rivals is especially vigorous and the offerings of rival firms are essentially identical, standardized, commodity-like products.

Question 29

In which of the following circumstances is a strategy to be the industry\'s overall low-cost provider NOT particularly well-matched to the market situation?

Accepted Answer

When buyers have widely varying needs and special requirements, and the prices of substitute products are relatively high.

Question 30

A strategy to be the industry\'s overall low-cost provider tends to be more appealing than a differentiation or best-cost or focus/market niche strategy when:

Accepted Answer

the offerings of rival firms are essentially identical, standardized, commodity-like products.

Question 31

Which of the following is NOT one of the pitfalls of a low-cost provider strategy?

Accepted Answer

Setting the industry\'s price ceiling to capture volume gains and achieve economies of scale

Question 32

A low-cost provider\'s product does NOT have to always:

Accepted Answer

suggest that a low price, by itself, is not always that appealing to buyers.

Question 33

The essence of a broad differentiation strategy is to:

Accepted Answer

offer unique product attributes in ways that are valuable and appealing and that buyers consider worth paying for.

Question 34

A company attempting to be successful with a broad differentiation strategy has to:

Accepted Answer

study buyer needs and behavior carefully to learn what buyers consider important, what they think has value, and what they are willing to pay for.

Question 35

Successful differentiation allows a firm to:

Accepted Answer

command a premium price for its product, and/or increase unit sales, and/or gain buyer loyalty to its brand.

Question 36

A broad differentiation strategy improves profitability when:

Accepted Answer

the higher price the product commands exceeds the added costs of achieving the differentiation.

Question 37

Opportunities to differentiate a company\'s product offering:

Accepted Answer

can exist in activities all along an industry\'s value chain.

Question 38

Uniqueness drivers are a:

Accepted Answer

set of factors (analogous to cost drivers) that are particularly effective in having a strong differentiation effect.

Question 39

Which of the following is NOT one of the ways managers can enhance differentiation based on uniqueness drivers?

Accepted Answer

Seeking out low-quality inputs

Question 40

Brands create customer loyalty, which in turn:

Accepted Answer

increases the perceived cost of switching to another product.

Question 41

Pursuing continuous quality improvement as a uniqueness factor is sound because:

Accepted Answer

it can often reduce product defects, improve economy of use, and result in more end-user convenience.

Question 42

Approaches to enhancing differentiation through changes in the value chain include:

Accepted Answer

All of these.

Question 43

The objective of differentiation:

Accepted Answer

is to offer customers something rivals can\'t, at least in terms of the level of satisfaction.

Question 44

A route to take in developing a differentiation advantage includes:

Accepted Answer

incorporating tangible features that add functionality, increase customer satisfaction with the product specifications, functions, and styling.

Question 45

Easy-to-copy differentiating features:

Accepted Answer

cannot produce sustainable competitive advantage.

Question 46

Which of the following is NOT one of the four basic routes to achieving a differentiation-based competitive advantage?

Accepted Answer

Appealing to buyers who are sophisticated and shop hard for the best, stand-out differentiating attributes

Question 47

Perceived value and signaling value are often an important part of a successful differentiation strategy because:

Accepted Answer

buyers seldom will pay for value they don\'t perceive, no matter how real the value of the differentiating extras may be.

Question 48

Broad differentiation strategies are well-suited for market circumstances where:

Accepted Answer

there are many ways to differentiate the product or service that have value to buyers.

Question 49

Broad differentiation strategies generally work best in market circumstances where:

Accepted Answer

buyer needs and uses of the product are diverse and they are not fully satisfied by a standardized product.

Question 50

A broad differentiation strategy works best in situations where:

Accepted Answer

technological change is fast-paced and competition revolves around rapidly evolving product features.

Question 51

A broad differentiation strategy generally produces the best results in situations where:

Accepted Answer

few rival firms are following a similar differentiation approach.

Question 52

In which one of the following market circumstances is a broad differentiation strategy generally NOT well-suited?

Accepted Answer

When the products of rivals are weakly differentiated and most competitors are resorting to clever advertising to try to set their product offerings apart

Question 53

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

Accepted Answer

Over-emphasizing efforts to strongly differentiate the company\'s product from those of rivals rather than be content with weak product differentiation

Question 54

Focused strategies keyed either to low-cost or differentiation are especially appropriate for situations where:

Accepted Answer

the market is composed of distinctly different buyer groups who have different needs or use the product in different ways.

Question 55

What sets focused (or market niche) strategies apart from low-cost leadership and broad differentiation strategies is:

Accepted Answer

their concentrated attention on serving the needs of buyers in a narrow piece of the overall market.

Question 56

A focused low-cost strategy seeks to achieve competitive advantage by:

Accepted Answer

serving buyers in a narrow piece of the total market (target market niche) at a lower cost and lower price than rivals.

Question 57

The chief difference between a low-cost provider strategy and a focused low-cost strategy is:

Accepted Answer

the size of the buyer group that a company is trying to appeal to.

Question 58

A focused low-cost strategy can lead to attractive competitive advantage when:

Accepted Answer

a firm can lower costs significantly by limiting its customer base to a well-defined buyer segment.

Question 59

A focused differentiation strategy aims at securing competitive advantage:

Accepted Answer

with a product offering carefully designed to appeal to the unique preferences and needs of a narrow, well-defined group of buyers.

Question 60

A focused strategy aimed at securing a competitive edge and which is based either on low cost or differentiation becomes more attractive when:

Accepted Answer

the target market niche is small enough to limit profitability and the outlook is ripe for differentiating.

Question 61

The risks of a focused strategy based on either low-cost or differentiation include:

Accepted Answer

the potential for the preferences and needs of niche members to shift over time toward product attributes desired by buyers in the mainstream portion of the market.

Question 62

Best-cost provider strategies are:

Accepted Answer

a hybrid of low-cost provider and differentiation strategies that aim at providing desired quality/features/performance/service attributes while beating rivals on price.

Question 63

To profitably employ a best-cost provider strategy, a company must have the resources and capabilities to:

Accepted Answer

incorporate attractive or upscale attributes into its product offering at a lower cost than rivals.

Question 64

A firm pursuing a best-cost provider strategy:

Accepted Answer

seeks to deliver superior value to buyers by satisfying their expectations on key quality/service/features/performance attributes and beating their expectations on price (given what rivals are charging for much the same attributes).

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