question

The opening case of Food Lion, Inc. illustrates the point that

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firms that overemphasize overall cost leadership thoughout their value chain can experience low performance.

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The primary aim of strategic management at the business level is

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achieving competitive advantage(s)

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In the long run, businesses without a competitive advantage are unlikely to earn more than "normal" profits. Normal profits are

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profits one would expect to earn on investments that have a similar level of risk.

question

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

answer

overall cost leadership

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Which of the following is a risk (or pitfall) of cost leadership?

answer

cost cutting may lead to the loss of desirable features

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A manufacturing business pursuing cost leadership will likely

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rely on experience effects to raise efficiency.

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

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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.

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

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offering lower prices to frequent customers

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High product differentiation is generally accompanied by

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decreased emphasis on competition based on price

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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

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Which of the following is false regarding how a differentiation strategy can help a firm to improve its competitive position vis à vis Porter's five forces?

answer

supplier power is increased because suppliers will be able to charge higher prices for their inputs

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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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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.

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

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broadly-defined target market is to a cost leadership strategy

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A firm following a focus strategy

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must focus on a market segment or group of segments

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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

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

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higher than firms that achieve either a cost or a differentiation advantage

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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.

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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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All of the following are potential pitfalls of an integrated overall low cost and differentiation strategy except:

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targeting too large a market that causes unit costs to increase

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

answer

It provides a "shorthand" for thinking about differences in strategic situations.

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

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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

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Which of the following descriptions of a product in the growth stage is true?

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There is an emphasis on product variety, prices are declining rapidly, and although the firm may be making a profit, cash flows may be negative.

question

The growth market is characterized by

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premium pricing.

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Which of the following is considered an accurate statement for a product in the growth period of its life cycle?

answer

It is easier to develop technology in the growth phase.

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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

maturity

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

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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, firms should attempt to compete on the basis of

answer

differentiation

question

As markets mature

answer

there is increasing emphasis on efficiency

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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

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.

answer

decline

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

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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 be decreased quickly.

answer

harvesting

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.

mana chap 5 – Flashcards

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