Strategic Management Chapter 5 – MC – Flashcards
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the primary aim of strategic management at the business level is:
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Achieving competitive advantage
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primary value chain activities that involve the effective layout of receiving dock operations and support value chain activities that include expertise in process engineering characterize what generic strategy?
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Overall cost leadership
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potential pitfall of cost leadership cost
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cutting may lead to the loss of desirable features
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A firm can achieve differentiation through all of the following means
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mproving brand image, better customer service, adding additional product features
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Support value chain activities that involve excellent applications engineering support and facilities that promote a positive firm image characterize what generic strategy?
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differentiation
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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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A differentiation strategy enables a business to address the five competitive forces by:
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lessening the competitive rivalry by distinguishing itself
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potential pitfalls of a differentiation strategy
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uniqueness that is not valuable, too high a price premium, perceptions of differentiation may vary between buyers and sellers
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a narrow market focus is to differentiation based strategy as a
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broadly defined market is to a cost leadership strategy
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a firm following a focus strategy must
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focus on a market segment or group of segments
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potential pitfalls of a focus strategy
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erosion of cost advantages within the narrow segment, even product and service offerings that are highly focused are subject to competition from new entrants and from imitation, focusers can become too focused to satisfy buyer needs
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research has consistently shown that firms that achieve both cost leadership and differentiation advantages tend to perform
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higher than firms that achieve either a cost of differentiation advantage
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The text discusses 3 approaches to combining overall cost leadership and differentiation competitive advantages. These are:
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automated and flexible manufacturing systems, exploiting the profit pool concept for competitive advantage, coordinating the extended value chain by way of information and technology
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defined as the total profits in an industry at all points along the industry's value chain
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profit pppl
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potential pitfalls of an integrated overall low cost and differentiation in the middle, underestimating the challenges and expenses associated strategy
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firms that fail to attain both may end up with neither and become stuck with coordinating value creating activities, miscalculating the sources of revenue and profit pools in the firm
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ways the Internet is lowering transaction costs
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eliminating supply chain intermediaries, minimizing office expenses, reducing business travel
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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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Method of implementing a differentiation strategy that has been greatly enhanced because of internet technologies
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mass customization
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Because of the internet, firms that use a focus strategy have new opportunities to:
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access niche markets in a highly specialized fashion
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One of the reasons the internet is eroding sustainable competitive advantages 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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The industry life cycle has important implications for a firm's
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generic strategies, functional areas, value creating activities, and overall objectives
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in this 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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premium pricing
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In this stage of the industry life cycle, there are many segments, competition is very intense, and the emphasis on process design is high
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maturity
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n 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?
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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?
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maturity
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As markets mature,
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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?
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maturity
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Advantages that cannot be duplicated by other competitors are
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difficult to achieve
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In this stage of the industry life cycle, there are few segments, the emphasis on product design is low, and the major functional areas of concern are general management and finance.
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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
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During the decline stage of the industry life cycle, this refers to obtaining as much profit as possible and requires that costs be decreased quickly
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harvesting
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Research shows that these are all strategies used by firms engaged in successful turnarounds
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asset and cost surgery, selective product and market pruning, piecemeal productivity improvements
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Piecemeal productivity improvements during a turnaround typically does not involve
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expansion of a firm's product market scope
