question

The primary aim of strategic management at the business level is

answer

achieving competitive advantage

question

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 what generic strategy?

answer

overall cost leadership

question

A manufacturing business pursuing cost leadership will likely

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rely in experience effects to raise efficiency

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One aspect of using a cost leadership strategy is that experience effects may lead to lower costs. Experience effects are achieved by

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repeating a process until a task becomes easier

question

The experience curve suggests that cutting prices is a good strategy

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if it can induce greater demand and thereby help a firm travel down the experience curve faster

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Convincing rivals not to enter a price war, protection from customer pressure to lower prices, and the ability to better withstand cost increases from supplies characterize which type of competitive advantage?

answer

overall cost leadership

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

question

A firm can achieve differentiation through all of the following means EXCEPT

answer

offering lower prices to frequent customers

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

question

differentiation strategy

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consists of creating differences in the firm's product or services offering by creating something that is perceived industry wide as unique and valued customers.

question

High product differentiation is generally accompanied by

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decreased emphasis on competition based on price

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Supplier power

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also decreased because there is a certain amount of prestige associated with being the supplier to a producer of highly differentiated products and services

question

A differentiation strategy enables a business to address the five competitive forces by

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lessening competitive rivalry by distinguishing itself

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Differentiation

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provides protection against rivalry since brand loyalty lowers customers sensitivity to price and raises customer switching costs

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All of the following are potential pitfalls of a differentiation strategy EXCEPT:

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all rivals share a common input or raw material

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Which statement regarding competitive advantages is true?

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If several competitors pursue similar differentiation tactics, they may all be perceived as equals in the mind of the consumer

question

Potential pitfalls of a differentiation strategy

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include uniqueness that is not valuable, too much differentiation, too high a price premium, differentiation that is easily imitated, dilution of brand identification through product-line extensions, or perceptions of differentiation may vary between buyers and sellers

question

A narrow market focus is to a differentiation-based strategy as a

answer

broadly-defined target market is to a cost leadership strategy

question

A firm following a focus strategy

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must focus on a market segment or group of segments

question

All of the following are potential pitfalls of a focus strategy EXCEPT:

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all rivals share a common input or raw material

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

question

The text discusses 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

question

Three approaches to combining low cost and differentiation include

answer

automated and flexible manufacturing systems, exploiting the profit pool concept for competitive advantage, and coordinating the "extended" value chain by way of information technology

question

A ____________ can be defined as the total profits in an industry at all points along the industry's value chain.

answer

profit pool

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Which of the following is NOT one of the ways the Internet is lowering transaction costs?

answer

evaluating employee performance

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

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mass customization

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Which of the following methods of implementing a differentiation strategy has been greatly enhanced because of Internet technologies?

answer

mass customization

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

access niche markets in a highly specialized

question

One of the reasons the Internet is eroding sustainable competitive advantage is

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nearly all competitors will have greater access to tools for managing costs making it hard for any one to achieve an advantage

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

answer

It has important implications for a firm's generic strategies, functional areas, value-creating activities, and overall objectives

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

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

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introduction

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The growth stage of the industry life cycle is characterized by

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"in-kind" competition (from the same type of product)

question

In the maturity stage of the industry life cycle

answer

there are many segments, competition is very intense, and the emphasis on process design is high

question

In a given market, key technology no longer has patent protection, experience is not an advantage, and there is growing need to compete on price. What stage of its life cycle is the market in?

answer

maturity

question

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

answer

maturity

question

As markets mature,

answer

there is increasing emphasis on efficiency

question

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

answer

maturity

question

Which of the following is most often true of mature markets

answer

advantages that cannot be duplicated by other competitors are difficult to achieve

question

Decline stage of the industry life cycle

answer

there are few segments, the emphasis on process design is low, and the major functional areas of concern are general management and finance

question

The most likely time to pursue a harvest strategy is in a situation of

answer

decline in the market life cycle

question

During the decline stage of the industry life cycle, _______________ refers to obtaining as much profit as possible and requires that costs to decreased quickly

answer

harvesting

question

Harvesting

answer

involves obtaining as much profit as possible and requires that costs be reduced quickly

question

Research shows that the following are all strategies used by firms engaged in successful turnarounds EXCEPT

answer

global expansion

question

Piecemeal productivity improvements during a turnaround typically does NOT involve

answer

expansion of a firm's product market scope

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