Capstone: Ch. 5 Quiz – Flashcards
39 test answers
Unlock all answers in this set
Unlock answers 39question
*The experience curve suggests that cutting prices is a good strategy:*
answer
> If it can induce greater demand and thereby help a firm travel down the experience curve faster
Unlock the answer
question
*Convincing rivals not to enter a price war, protection from customer pressure to lower prices, and the ability to better withstand cost increase from suppliers characterize which type of competitive strategy?*
answer
> Overall cost leadership
Unlock the answer
question
*Which of the following is a risk (or potential pitfall) of cost leadership?*
answer
> Cost cutting may lead to the loss of desirable features
Unlock the answer
question
*Support value chain activities that involve excellent applications engineering support (technology development) and facilities that promote a positive firm image (firm infrastructure) characterize what generic strategy?*
answer
> Differentiation
Unlock the answer
question
*A firm can achieve differentiation through all of the following means EXCEPT:*
answer
> Offering lower prices to frequent customers
Unlock the answer
question
*High product differentiation is generally accompanied by:*
answer
> Decreased emphasis on competition based on price
Unlock the answer
question
*Which of the following is FALSE regarding how a differentiation strategy can help a firm to improve its competitive position vis-a-vi Porter's five forces?*
answer
> Supplier power is increased because suppliers will be able to charge higher prices for their inputs
Unlock the answer
question
*A differentiation strategy enables a business to address the five competitive forces by:*
answer
> Lessening competitive rivalry by distinguishing itself
Unlock the answer
question
*All of the following are potential pitfalls of a differentiation strategy EXCEPT:*
answer
> All rivals share a common input or raw material
Unlock the answer
question
*Which statement regarding competitive advantages is true?*
answer
> If several competitors pursue similar differentiation tactics, they may all be perceived as equals in the mind of the consumer
Unlock the answer
question
*A narrow market focus is to a differentiation-based strategy as a:*
answer
> Broadly-defined target market is to a cost leadership strategy
Unlock the answer
question
*A firm following a focus strategy:*
answer
> Must focus on a market segment or group of segments
Unlock the answer
question
*All of the following are potential pitfalls of a focus strategy EXCEPT:*
answer
> All rivals share a common input or raw material
Unlock the answer
question
*Research has consistently shown that firms that achieve both cost leadership and differentiation advantages tend to perform:*
answer
> Higher than firms that achieve either a cost or a differentiation advantage
Unlock the answer
question
*The text discuss three approaches to combining overall cost leadership and differentiation competitive advantages. These are the following EXCEPT:*
answer
> Deriving benefits from highly focused and high technology markets
Unlock the answer
question
*A ______ can be defined as the total profits in an industry at all points along the industry's value chain.*
answer
> Profit pool
Unlock the answer
question
*All of the following are potential pitfalls of an integrated overall cost and differentiation strategy EXCEPT:*
answer
> Targeting too large a market that causes unit costs to increase
Unlock the answer
question
*Which of the following is NOT one of the ways the Internet is lowering transaction costs?*
answer
> Evaluating employee performance
Unlock the answer
question
*Dell Computer has an online ordering system that allows consumers to configure their own computers before Dell builds them. This capability is an example of:*
answer
> Mass customization
Unlock the answer
question
*Which of the following methods of implementing a differentiation strategy has been greatly enhanced because of the Internet technologies?*
answer
> Mass customization
Unlock the answer
question
*Which of the following phrases best completes this sentence: Because of the Internet, firms that use a focus strategy have new opportunities to:*
answer
> Asses niche markets in a highly specialized fashion
Unlock the answer
question
*One of the reasons the Internet is eroding sustainable competitive advantages is:*
answer
> Incumbent firms are entering market segments that they previously considered to be too small
Unlock the answer
question
*Which of the following statements about the introduction stage of the market life cycle is TRUE?*
answer
> Products or services offered by pioneers may be perceived as differentiated simply because they are new
Unlock the answer
question
*In the ____ stage of the industry life cycle, the emphasis on product design is very high, the intensity of competition is low, and the market growth rate is low.*
answer
> Introduction
Unlock the answer
question
*The growth stage of the industry life cycle is characterized by:*
answer
> A growing trend to compete on the basis of price
Unlock the answer
question
*In the ____ stage of the industry life cycle, there are many segments, competition is very intense, and the emphasis on process design is high.*
answer
> Growth
Unlock the answer
question
*In a given market, key technology no longer has patent protection, experience is not an advantage, and there is a growing need to compete on price. What stage of its life cycle is the market in?*
answer
> Maturity
Unlock the answer
question
*A market that mainly competes on the basis of price and has stagnant growth is characteristic of what life cycle stage?*
answer
> Maturity
Unlock the answer
question
*The size of pricing and differentiation advantages between competitors decreases in which stage of the market life cycle?*
answer
> Maturity
Unlock the answer
question
*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 generally management and finance.*
answer
> Decline
Unlock the answer
question
*The most likely time to pursue a harvest strategy is in a situation of:*
answer
> Strong competitive advantage
Unlock the answer
question
*During the decline stage of the industry life cycle, ____ refers to obtaining as much profit as possible and requires that costs be decreased quickly.*
answer
> Harvesting
Unlock the answer
question
*Research shows that the following are all strategies used by firms engaged in successful turnarounds EXCEPT:*
answer
> Global expansion
Unlock the answer
question
*As markets mature:*
answer
> There is increasing emphasis on efficiency
Unlock the answer
question
*Which of the following is most often true about mature markets:*
answer
> Advantages that cannot be duplicated by other competitors are difficult to achieve
Unlock the answer
