A legal agreement that allows a business to be operated using the name and business procedures of another firm is referred to as a: A. franchise. B. blue ocean strategy. C. green field investment. D. cartel.

A. franchise. More test answers on https://studyhippo.com/ba3305-entre-chp-6/

A blue ocean strategy A. is an offensive attack used by a market leader to steal customers away from unsuspecting smaller rivals. B. involves a preemptive strike to secure an advantageous position in a fast-growing market segment. C. works best when a company is the industry’s low-cost leader. D. offers growth in revenues and profits by discovering or inventing a new industry or distinct market segment that allows a company to create and capture altogether new demand. E. involves the use of highly creative, never-used-before strategic moves to attack the competitive weaknesses of rivals.

D. More test answers on https://studyhippo.com/strategy-ch6/

Blue Ocean Strategy test questions and answers | Get Access To Blue Ocean Strategy Flashcards and exam tests

Q: As a tool of Blue Ocean Strategy, the strategy canvas provides a way to visualize the firm’s strategy relative to other firms in the industry. The central portion of the strategy canvas is the __________, or the graphic representation of the firm’s relative performance across its industry’s factors.

value curve More test answers on https://studyhippo.com/mktg-policy-and-strategy-chapter-4-5/

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BUSMHR 4490 – Exam 2 Learnsmart – Flashcards 85 terms

Christine Brunetti

85 terms

Preview

BUSMHR 4490 – Exam 2 Learnsmart – Flashcards

question

Which two of the following variables can managers primarily manipulate in order to answer the questions "how should we compete? -price -style -cost -size -value

answer

cost and value

question

A firm's strategic profile based on value creation and cost is called its

answer

strategic position

question

A ____ is a situation that requires choosing between a cost or value position

answer

strategic trade-off

question

A ____ strategy aims to create higher value for customers by offering products with unique features but a similar level of costs to those of competing products

answer

differentiation

question

In a focused differentiation strategy, the competitive scope is ____ than in a traditional differentiation strategy

answer

narrower

question

A ____ strategy attempts to create products with unique and attractive features in order to increase the price that consumers are willing to pay

answer

differentiation

question

A firm that pursues a differentiation strategy will often find that the added expense of offering new or unique product features offsets the increase in perceived value, and profit margins begin to erode. This underscores the importance of ____ control for firms pursuing a differentiation strategy

answer

cost

question

Economies of ___ are the savings that come from producing two or more different outputs at a lower cost than producing each output individually

answer

scope

question

Positive adjustments in product features, customer service, and complements may enable managers to

answer

improve the firm's strategic position

question

Different value drivers contribute to competitive advantage if

answer

the increase in perceived value exceeds the corresponding cost increase

question

The Ritz-Carlton provides a personalized customer experience based on sophisticated analysis of data gathering about each guest. This focus on ____ allows the hotel to increase its perceived value.

answer

customer service

question

A tablet manufacturer than includes a free stylus with every purchase is using ___ (use noun) to enhance users' experience and increase the perceived value of its tablets.

answer

complements

question

A firm that hopes to achieve a competitive advantage by maintaining an efficient supply chain and taking advantage of economies of scale and a well-trained staff in focusing on

answer

cost drivers

question

Economies of scale are

answer

decreases in cost per unit as output increases

question

Diseconomies of scale often appear when a firm

answer

becomes too large and complex to manage efficiently

question

A ____ strategy attempts to increase the perceived value of a production while controlling costs

answer

differentiation

question

A differentiation strategy strategy can be threatened when

answer

a product becomes commoditized and the focus of the competition shifts to price

question

A ____ strategy requires achieving the lowest costs in the industry while maintaining a level of value that is acceptable to customers

answer

cost-leadership

question

The benefits of a cost-leadership strategy regarding the threat of entry in an industry are

answer

protection against entry due to economies of scale

question

Products in the affordable "business-casual" clothing market have largely become commoditized, and most retailers have begun to compete mainly on price rather than product features. In this environment, it is impossible for one retailer to gain market share without another losing it. This is an example of a ____ ocean.

answer

red

question

Furniture retailer IKEA has used the value innovation framework of ____ to successfully implement a blue ocean strategy

answer

eliminate-reduce-raise-create

question

To formulate an appropriate business-level strategy, managers must answer the ____ questions of competition

answer

who, what, why, and how

question

The ____ determines whether to pursue a specific narrow part of the market of to go after the broader market

answer

scope of competition

question

Value drivers known as ____ add value to a product or service when they are consumed in tandem with the focal product

answer

complements

question

The most important cost drivers are

answer

-experience curve effects -learning curve effects -economies of scale -cost of input factors

question

The goal of a ____-____ strategy is to achieve costs below those of competitors while maintaining similar value. A firm with this strategy could or could not achieve differentiation parity

answer

cost-leadership

question

A firm's competitive advantage is determined jointly by ___ effects and firm effects

answer

industry

question

At which stage of the industry life cycle does the size of the market expand rapidly?

answer

growth

question

An agreed-upon solution about a common set of engineering features and design choices is known as a

answer

standard

question

Innovation helps firms to achieve a competitive advantage by

answer

redefining the market in their favor

question

The commercialization of an invention by entrepreneurs is called

answer

innovation

question

True of false: Innovation can create value for one firm while destroying value for another

answer

True

question

Which are the four steps of the innovation process?

answer

idea, invention, innovation, imitation

question

Which of the following is an example of innovation?

answer

Apple combining smart phone and wristwarch technologies to create the Apple Watch

question

Entrepreneurs innovate by

answer

commercializing new ideas and inventions

question

The fundamental question of ____ is how to combine entrepreneurship with the concepts of strategic management in order to achieve a competitive advantage

answer

strategic entrepreneurship

question

The ____ identifies how industries tend to develop and change over time

answer

industry life cycle

question

The development of most industries follows an:

answer

s-curve

question

In which stage of the industry life cycle does competition become more intense, forcing weaker firms out of the industry?

answer

Shakeout

question

In the maturity stage of the industry life cycle, industry growth

answer

flattens or even declines

question

In the ____ stage of the industry life cycle, falling demand leads to a reduction in market size

answer

decline

question

Which of the following are strategic options in the decline stage of the industry life cycle?

answer

maintain, exit, harvest, consolidate

question

It is challenging for firms to "cross the chasm" because

answer

each stage of the industry life cycle features a different group of customers with different preferences and demands

question

According to the crossing-the-chasm framework, the largest difference in consumer expectations is between

answer

early adopters and the early majority

question

A significant difference between technology enthusiasts and early adopters is that

answer

early adopters are interested in how a new technology will improve their lives, rather than in the details of the technology itself

question

The shakeout stage of the industry life cycle is dominated by

answer

the early majority

question

a significant difference between the early majority and the late majority is that

answer

the late majority is not confident in using new technologies

question

Which customer segment will only adopt a new product when it becomes absolutely necessary?

answer

laggards

question

An innovation that targets existing markets with new technologies, is called

answer

a disruptive innovation

question

The most common type of innovation is

answer

incremental innovation

question

It is common for firms to start by introducing a(n) ____ innovation

answer

radical

question

Which of the following is most likely to produce a radical innovation? -a leading toy manufacturer with a significant interest in maintaining the status quo -a new sportswear company with a handful of employees that perform a number of loosely-defined roles -an established restaurant chain with a clean organization structure and strictly defined roles for employees -a financial services firm that has been in business for 75 years and has longstanding customer relationships

answer

a NEW sportswear company with a handful of employees that perform a number of loosely-defined roles

question

In the ____ stage of the industry life cycle, a moderate amount of large firms compete for a share of a market that has reached its maximum size

answer

maturity

question

The four strategic options that managers have in the decline stage are:

answer

exit, harvest, maintain, or consolidate

question

True of False: The chasm separating the early adopters from the early majority is the biggest one

answer

True

question

Which of the following are characteristics of the early majority?

answer

-rely on review by reputable magazines -strong sense of practicality -weigh benefits and costs carefully

question

Innovations that target NEW markets and represent a major break from existing technologies or ways of thinking, such as the digital camera, the touch-screen smart phone, or the decoding of the human genome, are examples of

answer

radical innovations

question

The shakeout stage of the industry life cycle is dominated by

answer

the early majority

question

Educational organizations such as Coursera are ____ (use verb) traditional universities by offering massive open online courses on the web

answer

disruptive

question

What can incumbent firms do to counter disruptive innovations

answer

-continue to innovate -protect the low end of the market -disrupt themselves

question

Kava Botanicals, a boutique retailer than sells high-end makeup and accessories, is owned by two makeup manufacturers. Kava Botanicals is an example of which strategic alliance?

answer

a joint venture

question

____ strategy involves the decisions that senior management makes and the goal-directed actions it takes to gain and sustain competitive advantage in several industries and markets simultaneously

answer

corporate

question

The four underlying strategic management concepts that determine the scope of a firm are which of the following?

answer

core competencies, economies of scale, economies of scope, and transaction costs

question

Transaction cost economics help managers do which of the following?

answer

choose which activities to do within the firm

question

Transaction costs include ____ costs associated with an economic exchange

answer

the internal and external

question

What is a major disadvantage of organizing economic activity within firms?

answer

the principal-agent problem

question

The lemons problem suggests that information asymmetries cause

answer

superior goods to be replaced by inferior ones

question

Alternatives in the mark-or-buy continuum include which of the following?

answer

equity alliances and joint ventures

question

A disadvantage of using a short-term contract for the supplying firm is that they

answer

have little reason to perform transaction-specific investments

question

A(n) ____ is a voluntary arrangement between firms that involve sharing of resources and capabilities with the intent of developing processes, products, or services

answer

strategic alliance

question

Unlike short-term contracts, long-term contracts encourage firms to make ____ investments

answer

transaction-specific

question

What is licensing?

answer

a form of long-term contracting that enables firms to commercialize intellectual property

question

Why might a firm want to enter into an equity alliance instead of a short- of long-term contract?

answer

-to facilitate transaction-specific investments -to get insider information about the partner's business -to make a credible commitment

question

True of false: the industry value chain is also called the horizontal value chain

answer

False - the vertical value chain

question

Stages four and five of the industry value chain involve

answer

-after-sales service and support -marketing -sales

question

When a manufacturer of computers starts to produce its own computer components, the manufacturer engages in ____ vertical integration

answer

backward

question

An advantage of ____ is that it helps ensure that needed materials and distribution channels are available when needed

answer

vertical integration

question

Specialized assets have

answer

high opportunity cost

question

____ refers to the assets whose physical and engineering properties are designed to satisfy a particular customer

answer

physical-asset specificity

question

Why do some firms choose alternatives to vertical integration?

answer

to avoid the risks associated with vertical integration

question

In the taper integration system, a firm has ____ reliance on outside markets

answer

partial

question

____ refers to the act of outsourcing some of the firm's activities outside of the home country to another nation

answer

offshoring

question

____ refers to an increase in the variety of products and services a firm offers or markets and the geographic regions in which is competes

answer

diversification

question

A ____ diversification strategy refers to a firm that pursues both product and geographic diversification

answer

product-market

question

To figure out if a firm's type of diversification is ____ or ____, one can ask questions about the degree to which the corporation's business units share core competencies

answer

related; unrelated

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Flashcards About MGMT 464 Exam 2 (6) 85 terms

August Dunbar

85 terms

Preview

Flashcards About MGMT 464 Exam 2 (6)

question

A _____ primarily details the goal-directed actions managers take in their quest for competitive advantage when competing in a single product market. A. business-level strategy B. code of ethics C. mission statement D. functional-level strategy

answer

A. business-level strategy

question

Which of the following is a firm effect that has an impact on the competitive advantage of a firm? A. The exit barriers within the industry in which the firm operates B. The number of companies operating in the industry in which the firm operates C. The intensity of rivalry among existing companies in the firm's chosen industry D. The value and the cost position of the firm relative to its competitors

answer

D. The value and the cost position of the firm relative to its competitors

question

A firm's business strategy will lead to a competitive advantage if it allows the firm to: A. execute the same activities performed by the rivals in a similar manner. B. reduce the value gap. C. perform different activities than its rivals. D. position itself below the productivity frontier.

answer

C. perform different activities than its rivals.

question

When a firm makes choices between a cost or value position to achieve competitive advantage, it is primarily involved in _____. A. collective bargaining B. strategic trade-offs C. arbitration D. mediation

answer

B. strategic trade-offs

question

Firms pursuing a differentiation strategy primarily seek to: A. keep their cost structures lower than that of the cost leader. B. reduce the value gap to gain a competitive advantage. C. provide products that are a direct imitation of the competitors' products. D. create higher customer perceived value than the value that competitors create.

answer

D. create higher customer perceived value than the value that competitors create.

question

Home Smart Inc. is a chain of supermarkets that sells its products at higher prices than its competitors. Yet, the supermarket chain has a large customer base due to its wide product portfolio and superior customer service. Which of the following generic business strategies has Home Smart adopted in this scenario? A. Cost-leadership B. Differentiation C. Market penetration D. Product diversification

answer

B. Differentiation

question

Free Color Inc. is an apparel company that caters to the highly price-conscious customers. Through its simple apparel designs, acceptable quality levels, and minimal customer service, the company has been able to sell its merchandise at the lowest prices in the industry. Which of the following generic business strategies is Free Color applying? A. Cost-leadership B. Differentiation C. Niche marketing D. Product diversification

answer

A. Cost-leadership

question

Why are differentiation and cost-leadership strategies referred to as generic business strategies? A. They can be simultaneously pursued by a firm without any trade-offs. B. They can be used by any organization independent of industry context. C. They require similar strategic positions in order to increase a firm's chances to gain competitive advantage. D. They can be applied only by businesses which have a competitive advantage.

answer

B. They can be used by any organization independent of industry context.

question

True Empire Autos Inc. is an automobile company known for its luxury cars and follows a differentiation strategy. In this scenario, True Empire Autos should ideally compare its strategic position with a(n) _____. A. automobile company that sells pre-owned cars B. automobile company that sells high-end, premium cars C. automobile company that manufactures economy cars D. pen manufacturing company that follows a differentiation strategy

answer

B. automobile company that sells high-end, premium cars

question

Wear Crush Inc. is an apparel company known for its affordable clothes that follows a cost-leadership strategy. In this scenario, Wear Crush should ideally compare its strategic position with: A. a company that sells wristwatches at affordable prices. B. a luxury apparel company that sells designer clothes. C. an apparel company popular among price-conscious customers. D. an online company that sells customized pet clothing.

answer

C. an apparel company popular among price-conscious customers.

question

In a focused cost-leadership strategy, a firm: A. caters to the segment of the market that is least cost-sensitive. B. provides high-priced products for many different segments of the mass market. C. delivers low-cost products and services to a specific, narrow part of the market. D. focuses on reducing the economic value created to drive down costs.

answer

C. delivers low-cost products and services to a specific, narrow part of the market.

question

Green Curry is a restaurant that caters to the needs of a small percentage of highly health-conscious consumers. It has an all-organic, vegan menu. Since there are very few restaurants that offer the same unique services, customers are willing to pay a premium price for its products and services. In this scenario, Green Curry is following a _____. A. product diversification strategy B. liquidation strategy C. mass market strategy D. focused differentiation strategy

answer

D. focused differentiation strategy

question

A company that uses a differentiation strategy can achieve a competitive advantage as long as its: A. economic value created is greater than that of its competitors. B. value gap is lower than that of its competitors. C. strategic position is below the productivity frontier. D. products and services create a lower consumer surplus than that of its competitors.

answer

A. economic value created is greater than that of its competitors.

question

Both Viten Electronics Inc. and JL Electronics Inc. incur a cost of $400 to manufacture an LED television. However, the economic value created by JL Electronics is more than that created by Viten Electronics. What does this indicate? A. Viten Electronics has a competitive advantage over JL Electronics. B. Both Viten Electronics and JL Electronics have achieved competitive parity. C. JL Electronics can charge a premium price on its televisions. D. Viten Electronics has created a higher value gap than JL Electronics.

answer

C. JL Electronics can charge a premium price on its televisions.

question

A firm pursuing a differentiation strategy as opposed to a low-cost strategy will: A. focus its research and development on product technologies to add uniqueness. B. concentrate on leveraging its economies of scale through process technologies. C. build an organization structure that relies on strict budget controls. D. create a lower economic value as compared to its competitors.

answer

A. focus its research and development on product technologies to add uniqueness.

question

When a differentiator charges a similar price as its competitors in the same strategic group but offers more perceived value, it: A. loses its competitive advantage. B. gains market share from other firms. C. lowers the economic value created. D. results in diseconomies of scale.

answer

B. gains market share from other firms.

question

Both Myoco Electronics Inc. and Electra Series Inc. have achieved cost parity in the television market. To gain and sustain a competitive advantage against Electra Series, Myoco Electronics should: A. achieve differentiation parity with Electra Series. B. keep its value gap lower than that of Electra Series. C. create greater perceived economic value than Electra Series. D. increase its cost of production to more than that of Electra Series.

answer

C. create greater perceived economic value than Electra Series.

question

Which of the following will hamper a differentiator's ability to achieve a competitive advantage? A. Lower production costs B. Premium prices C. Lower value gap D. Customized goods

answer

C. Lower value gap

question

Whole Foods differentiates itself from competitors by offering top-quality foods obtained through sustainable agriculture. This business strategy implies that Whole Foods focuses on: A. decreasing the existing value gap by providing luxury goods to customers. B. maintaining a less steeper learning curve as compared to its competitors. C. increasing the perceived value created for customers, which allows it to charge a premium price. D. lowering its costs compared to its competitors', while offering adequate value for its products and services.

answer

C. increasing the perceived value created for customers, which allows it to charge a premium price.

question

Which of the following is more of a value driver than a cost driver? A. Superior customer service B. Economies of scale C. Learning-curve effects D. Experience-curve effects

answer

A. Superior customer service

question

Oviyo Inc. has been successful at differentiating itself from competitors by claiming a premium price for its digital cameras based on superior image quality and advanced technology. In this scenario, which of the following is the key value driver? A. Economies of scale B. Low-cost input factors C. Product features D. Premium prices

answer

C. Product features

question

Coral Orchids is a chain of premium hotels around the globe that charges higher prices for its rooms and suites when compared to the average industry standards. Yet, the hotel enjoys the largest market share in the industry. This is mainly due its highly responsive staff that has a strong commitment toward achieving a 100 percent guest satisfaction. In this scenario, which of the following is the key value driver? A. Superior customer service B. Low cost of input factors C. Availability of complements D. Economies of scale

answer

A. Superior customer service

question

When Internet service providers offer free routers for subscriptions to their wireless Internet packs, the perceived value of the service offering increases. In this case, the value driver would be: A. economies of scale. B. learning-curve effects. C. experience-curve effects. D. availability of complements.

answer

D. availability of complements.

question

Body Sync Inc. is a chain of gyms. It offers a fitness package that allows its members to use the gym facilities for 12 months by paying only for 10 months. Included in the package are two health check-ups and a gym kit. These add-ons by themselves are not very valuable, but as a package they can enhance the perceived value of the service offerings. In this case, Body Sync's primary value driver is: A. economies of scale. B. learning-curve effects. C. availability of complements. D. experience-curve effects.

answer

C. availability of complements.

question

Value drivers contribute to a firm's competitive advantage only if: A. the increase in value creation exceeds the increase in costs. B. they can shrink the firm's value gap. C. they can restrict the firm from claiming a premium price for its products. D. the decrease in perceived value leads to an increase in costs.

answer

A. the increase in value creation exceeds the increase in costs.

question

A firm achieves differentiation parity ideally when: A. it creates the same customer value as its competitors. B. its cost of production is higher than that of its competitors. C. it successfully sells its products and services at a higher price than its competitors. D. its product features and services are better than that of its competitors.

answer

C. it successfully sells its products and services at a higher price than its competitors.

question

While Aros Inc. incurs a cost of $20 for a pair of shoes, Shoes Cult Inc., its competitor, manufactures a pair of shoes at $22. Both the companies are able to sell their shoes for a maximum of $30 per pair. Which of the following statements is NOT true in this scenario? A. Both Aros and Shoes Cult have achieved differentiation parity. B. Aros is a cost leader when compared to Shoes Cult. C. Aros has created a greater economic value than Shoes Cult. D. Shoes Cult has a competitive advantage over Aros.

answer

D. Shoes Cult has a competitive advantage over Aros.

question

TrueDisk Inc. manufactures external hard disks for $32 per unit, and the maximum price customers are willing to pay is $47 per unit. SW Storage Inc. is a competitor of TrueDisk Inc. that produces external hard disks for $37 per unit, and customers are willing to pay a maximum price of $50 per unit. What does this imply? A. TrueDisk and SW Storage share differentiation parity. B. SW Storage has a competitive advantage over TrueDisk in terms of perceived value. C. TrueDisk creates a greater economic value than SW Storage. D. SW Storage is a cost leader when compared to TrueDisk.

answer

C. TrueDisk creates a greater economic value than SW Storage.

question

Evia Cycles Inc. incurs $400 to manufacture a bicycle, and the maximum price customers are willing to pay is $550 per unit. Archer Cycles Inc., its competitor, incurs $450 to manufacture a similar bicycle, and customers are willing to pay a maximum price of $620 for it. What does this indicate? A. Both Evia Cycles and Archer Cycles have achieved differentiation parity. B. Evia Cycles has a competitive advantage over Archer Cycles. C. Archer Cycles has created a greater economic value than Evia Cycles. D. Both Evia Cycles and Archer Cycles have achieved cost parity.

answer

C. Archer Cycles has created a greater economic value than Evia Cycles.

question

Even without differentiation parity, a firm pursuing a cost-leadership strategy can still gain a competitive advantage as long as its: A. learning curve is not steeper than that of its competitors. B. per-unit costs are higher than that of its competitors. C. economic value creation exceeds that of its competitors. D. value gap is lower than that of its competitors.

answer

C. economic value creation exceeds that of its competitors.

question

Which of the following factors contributes to the success of the cost-leadership strategy of Ryanair airlines? A. The high input costs B. The luxury services C. The lower value gap D. The rock-bottom air fares

answer

D. The rock-bottom air fares

question

In contrast to a differentiator, a cost leader will: A. charge a premium price for its products and services. B. build an organization culture where creativity and customer responsiveness thrive. C. focus its research and development on process technologies to improve efficiency. D. avoid an organizational structure that relies on strict budget controls.

answer

C. focus its research and development on process technologies to improve efficiency.

question

Rosa Apparels Inc. outsources its production to contract manufacturers located in underdeveloped nations where unskilled labor is available in plenty for very low wages. This has helped the apparel brand become a price leader in the industry. Which of the following is the key driver behind Rosa Apparel's strategic position? A. Network effects B. Superior customer service C. Availability of complements D. Low-cost input factors

answer

D. Low-cost input factors

question

Both BioThink Inc. and GD Pharma Inc. have discovered similar vaccines to prevent cancer. While GD Pharma's vaccine sells at $100 per unit, BioThink sells its vaccine at $90 per unit. This price differentiation has mainly been attributed to the companies' capital decisions. While BioThink used its retained earnings to develop the vaccine, GD Pharma borrowed funds from banks to develop the vaccine. Thus, GD Pharma pays a higher interest on its capital, which makes it necessary to price its vaccine higher. Thus, the key driver for BioThink's competitive advantage is: A. low-cost input factors. B. economies of scale. C. superior customer service. D. availability of complements.

answer

A. low-cost input factors.

question

_____ is best described as decreases in cost per unit as output increases. A. Economies of scale B. Economies of scope C. Time compression economies D. Economies of replication

answer

A. Economies of scale

question

Economies of scale do NOT allow firms to: A. spread their fixed costs over a larger output. B. employ specialized systems and equipment. C. spread their variable costs over a larger output. D. take advantage of certain physical properties.

answer

C. spread their variable costs over a larger output.

question

_____ is best described as the output range needed to bring down the cost per unit as much as possible, allowing a firm to stake out the lowest-cost position that is achievable through economies of scale. A. Minimum efficient scale B. Break-even output C. Maximum output capacity D. Optimum sustainable yield

answer

A. Minimum efficient scale

question

When a firm manufactures 2,000-3,000 units of a product, it incurs an average cost of $10 per unit. When it manufactures 3,000-4,000 units of the same product, the average cost per unit reduces to $7. However, manufacturing beyond 4,000 units will raise the average cost per unit to $9. Which of the following is the firm's minimum efficient scale? A. 2,000-3,000 units B. 3,000-4,000 units C. Below 2,000 units D. Above 4,000 units

answer

B. 3,000-4,000 units

question

When a firm operates at the minimum efficient scale, the: A. returns to scale are constant. B. cost per unit is the highest. C. firm experiences diseconomies of scale. D. firm attains the highest cost position.

answer

A. returns to scale are constant.

question

To be cost-competitive, a firm should: A. position itself below the productivity frontier. B. operate at the minimum efficient scale. C. attain the highest cost position. D. avoid moving on to a steeper experience curve.

answer

B. operate at the minimum efficient scale.

question

When a firm operates at an output level of 9,000 units, the per-unit cost is $5. When the production is between 10,000-12,000 units, the per-unit cost is $4. At a production level of 13,000 units, the production cost is again $5 per unit. At 14,000 units and above, the production cost increases further. At what output level does the firm experience economies of scale? A. 9,000 units B. 11,000 units C. 13,000 units D. 15,000 units

answer

B. 11,000 units

question

KitchenThings Inc. is a company that manufactures plastic kitchenware. It operates at an output level that allows it to keep its unit cost per output to the lowest in the industry. This in turn allows KitchenThings to be the price leader. Other competing companies cannot operate at the same level due to a lack of consumer demand for their products. This puts them at a competitive disadvantage. In this scenario, the cost driver behind KitchenThings's strategic position is _____. A. superior customer service B. economies of scale C. availability of complements D. learning-curve effects

answer

B. economies of scale

question

BuyMart Inc. is a large chain of hypermarkets. It has cost benefits due to its extensive operation. The company's marketing and sales, logistics, administrative, and other such related costs get divided between a large number of product units stocked in its stores. This makes it difficult for smaller retail stores and supermarkets to compete against BuyMart's low prices. Thus, BuyMart has a competitive advantage due to its: A. superior customer service. B. time compression economies. C. economies of scale. D. learning-curve effects.

answer

C. economies of scale.

question

A firm experiences _____ when there are increases in cost per unit as output increases. A. diseconomies of scale B. economies of scope C. time compression diseconomies D. economies of flow

answer

A. diseconomies of scale

question

When Jean Cult Inc. was operating at the minimum efficient scale of 10,000-12,000 units per month, the firm's cost per unit was $20. However, when the output level was increased beyond 12,000 units, the cost per unit increased to $22. This increase was attributed to the wear-and-tear of the machinery, and complexities of managing and coordinating. What is this phenomenon known as? A. Resource ambiguity B. Diseconomies of scale C. Network effect D. Learning-curve effect

answer

B. Diseconomies of scale

question

A firm experiences diseconomies of scale when it: A. has a constant returns to scale. B. moves down the experience curve. C. produces at an output level beyond the minimum efficient scale. D. has a steep learning curve when compared to its competitors.

answer

C. produces at an output level beyond the minimum efficient scale.

question

Diseconomies of scale refer to: A. decreases in cost as profit increases. B. increases in cost as output increases. C. increases in economic value as per-unit cost decreases. D. decreases in profit when consumer demand decreases.

answer

B. increases in cost as output increases.

question

Bass Watches Inc. initially spent eight man-hours to assemble a wrist watch. But as the production doubled, the number of hours spent on assembling a watch reduced by 20 percent. This increase in productivity reduced the company's cost per unit. What is this phenomenon referred to as? A. Learning-curve effect B. Network effect C. Black-swan event D. Time compression diseconomies

answer

A. Learning-curve effect

question

Which of the following statements accurately brings out the difference between economies of scale and learning effects? A. While there are no diseconomies to learning, there are diseconomies to scale. B. Economies of scale occur over time, whereas learning effects are captured at one point in time. C. Firms experience economies of scale when output increases, and learning effects when output decreases. D. Economies of scale reduce cost per unit, learning effects increase cost per unit.

answer

A. While there are no diseconomies to learning, there are diseconomies to scale.

question

As the cumulative output in a firm increases, managers learn how to optimize the production process and improve workers' performance through repetition. This drives down the per-unit cost. Which of the following phenomena is best described here? A. Learning effects B. Network effects C. Diseconomies of scale D. Productivity frontier

answer

A. Learning effects

question

Which of the following statements is true of learning curves? A. Learning curves are captured at one point in time when output is increased. B. Learning curves can be observed in manufacturing processes and professional services. C. As cumulative output increases, the learning curve becomes less steeper. D. The steeper the learning curve, the lesser the learning effects.

answer

B. Learning curves can be observed in manufacturing processes and professional services.

question

What does it mean for a firm to have an 80 percent learning curve? A. Every time the cumulative output increases by 80 percent, the cost per unit will decline by 20 percent. B. Every time the cumulative output is doubled, the cost per unit will decline by 80 percent. C. Every time the cumulative output goes up by 20 percent, the cost per unit will decline by 80 percent. D. Every time the cumulative output is doubled, the cost per unit will decline by 20 percent.

answer

D. Every time the cumulative output is doubled, the cost per unit will decline by 20 percent.

question

A firm's learning curve is steeper than that of its competitor. What does this imply? A. The firm is at an advantage when compared to its competitor. B. The firm and its competitor have achieved cost parity. C. The firm experiences negative returns to scale. D. The firm experiences diseconomies of scale when compared to the competitor.

answer

A. The firm is at an advantage when compared to its competitor.

question

At a certain output level, the per-unit cost incurred by a firm to manufacture a product is $5. Other factors remaining constant, what will be the new per-unit cost if the cumulative output is doubled, and the firm is able to achieve an 80 percent learning curve? A. $4 B. $5 C. $3 D. $6

answer

A. $4

question

At a certain output level, the per-unit cost incurred by a firm to manufacture a product was $60. Once the cumulative output doubled, the cost per unit reduced to $54. All other factors remaining constant, the firm has been able to achieve a(n): A. 80 percent learning curve. B. 90 percent learning curve. C. 60 percent learning curve. D. 54 percent learning curve.

answer

B. 90 percent learning curve.

question

Which of the following situations will have greater effects from economies of scale than from learning effects? A. When conducting surgeries B. When practicing corporate law C. When mass manufacturing pens D. When making business decisions

answer

C. When mass manufacturing pens

question

Combining economies of learning with the existing production technology allows a firm to: A. move up a given experience curve. B. move down a given learning curve. C. jump to a less steeper learning curve. D. jump to a flatter experience curve.

answer

B. move down a given learning curve.

question

The concept of a(n) _____ attempts to capture both learning effects and process improvements at firms. A. managerial grid B. growth matrix C. experience curve D. diminishing utility curve

answer

C. experience curve

question

When a firm combines experience based learning and process innovation, the firm: A. jumps to a steeper learning curve. B. experiences an increase in per-unit cost. C. loses its competitive advantage. D. moves down the existing learning curve.

answer

A. jumps to a steeper learning curve.

question

GlamorRace is a cosmetic brand that pursues a cost-leader strategy. Which of the following statements is true of the cosmetic brand? A. It appeals to the price-conscious buyers. B. Its primary value driver is product uniqueness. C. It charges a premium price for its products. D. It directly competes against luxury cosmetic brands that charge premium prices.

answer

A. It appeals to the price-conscious buyers.

question

A cost-leader is protected from the threat of new entrants primarily due to its: A. superior customer service. B. luxury goods. C. economies of scale. D. premium pricing.

answer

C. economies of scale.

question

According to the five forces model, which of the following is viewed as a major risk to a business pursuing a cost-leadership strategy? A. Competition switching from non-price attributes to pricing B. Innovation that allows competitors to emerge with more economical replacements C. New entrants with small production scale D. Suppliers requesting a 2% price increase across the industry

answer

B. Innovation that allows competitors to emerge with more economical replacements

question

Which of the following sources of differential appeal is least effective in helping a firm sustain its advantage? A. Reputation for innovation B. Reputation for quality C. Superior customer experience D. Observable product features

answer

D. Observable product features

question

A differentiator is least likely to be threatened by increases in input prices due to powerful suppliers when the: A. differentiator is able to create a significant difference between perceived value and current market prices. B. differentiator is able to significantly reduce the value gap. C. source of a competitor's differential appeal is tangible rather than intangible. D. new product features added raise costs but not the perceived value in the minds of consumers.

answer

A. differentiator is able to create a significant difference between perceived value and current market prices.

question

A differentiation strategy works best when a: A. firm has tangible resources, its focus of competition shifts to price, and equivalent substitutes are readily available. B. firm's focus of competition shifts to price, and when increasing differentiation of product features do not create additional value. C. firm's differentiated products are commoditized, and costs of providing uniqueness do not rise above the customer's willingness to pay. D. firm has intangible resources, is able to pass on increases in supplier cost to the customer, and its differentiation appeal creates customer loyalty.

answer

D. firm has intangible resources, is able to pass on increases in supplier cost to the customer, and its differentiation appeal creates customer loyalty.

question

In a successful _____, the trade-offs between differentiation and low cost are reconciled. A. integration strategy B. focused differentiation strategy C. liquidation strategy D. divestment strategy

answer

A. integration strategy

question

The primary goal of a firm pursuing an integration strategy should be to: A. create the highest perceived value in its respective industry. B. build a reputation of being the lowest-cost producer in its chosen industry. C. achieve a larger economic value created than that of rivals in the industry. D. achieve a less steeper learning curve.

answer

C. achieve a larger economic value created than that of rivals in the industry.

question

A successfully implemented integration strategy allows a firm to: A. charge a higher price than the cost leader in the industry. B. create lesser economic value than the differentiator in the industry. C. reduce its value gap beyond that created by the cost leader in the industry. D. increase its price above that of the differentiator in the industry.

answer

A. charge a higher price than the cost leader in the industry.

question

In the multiplex industry, Vibrant Movies Inc. is an upscale multiplex that focuses on superior customer experience. The firm charges premium prices for its movie tickets and services. Global Cine Inc., in contrast, charges the lowest price in the industry with its no-frills approach. In between these two segments is True Movies Inc., which offers a customer experience comparable to that of Vibrant Movies at a price almost as low as that of Global Cine. What strategy is True Movies pursuing in this scenario? A. Liquidation strategy B. Product diversification strategy C. Market penetration strategy D. Integration strategy

answer

D. Integration strategy

question

Which of the following statements accurately brings out the difference between economies of scale and economies of scope? A. Economies of scale refer to the decreases in per-unit cost with decreases in output, whereas economies of scope refer to the increases in per-unit cost with increases in output. B. Economies of scale result in decreasing returns to scale, and economies of scope result in constant returns to scale. C. Economies of scope are the savings that come from producing two or more outputs from the same resources, whereas economies of scale are decreases in per-unit cost with increases in output. D. Economies of scope are realized when a firm operates at the minimum efficient scale, whereas economies of scale are realized when the firm operates beyond the minimum efficient scale.

answer

C. Economies of scope are the savings that come from producing two or more outputs from the same resources, whereas economies of scale are decreases in per-unit cost with increases in output.

question

_____ is best described as the process of manufacturing a large variety of tailor-made products or services at a relatively low unit cost. A. Just-in-time manufacturing B. Mass customization C. Unit-cost production D. Product diversification

answer

B. Mass customization

question

Innovate Electronics Inc. allows its customers to personalize their refrigerators in terms of the dimensions, the panels inside, and the color and design of the outer body. Also, customers can include additional features like in-built radios, extra lights, and cold water dispensers based on their individual requirements. The company successfully manufactures these tailor-made goods at a relatively low unit cost and provides it to the customers at a price almost equal to that of the standard refrigerators sold by other companies. What does this scenario best illustrate? A. Mass customization B. Cannibalization C. Product standardization D. Direct imitation

answer

A. Mass customization

question

BodyBlush Inc. is a brand reputed for its wide variants of body wash that introduced its range of shampoos and skin moisturizers a few years ago. Since most of its products could be produced using the same resources and technology, the company's cost structure lowered, while its product portfolio widened. In this scenario, which of the following value and cost drivers is BodyBlush applying? A. Mass customization B. Economies of scope C. Learning-curve effect D. Network effect

answer

B. Economies of scope

question

DFS Electronics Inc. ensures that all its products are highly durable and reliable by using techniques like zero-defect and lean manufacturing systems. These efforts not only add to the products' differential appeal, but also help the company save costs during production and avoid expenses due to after-sales services. Thus, the common value and cost driver responsible for DFS Electronics' strategic position as an integrator is the _____. A. network effect B. availability of complements C. quality D. diseconomies of scale

answer

C. quality

question

Which of the following drivers simultaneously increases value while lowering cost? A. Economies of scale B. Superior customer service C. Availability of complements D. Innovation

answer

D. Innovation

question

When a firm is successful at pursuing an integration strategy, _____. A. investments in differentiation are complements B. value and cost exhibit a positive correlation C. low cost acts as a substitute D. investments in process and product technologies are substitutes

answer

A. investments in differentiation are complements

question

When a firm applies its current knowledge to enhance its performance in the short term, it is referred to as _____. A. exploitation B. exploration C. pattern recognition D. lateral thinking

answer

A. exploitation

question

_____ is when a firm is searching for new knowledge that could enhance its future performance. A. Pattern recognition B. Reverse mentoring C. Exploitation D. Exploration

answer

D. Exploration

question

An integration strategy differs from a low-cost strategy in that: A. the intent of an integration strategy is not to be the absolute lowest-cost provider because an integrator must also increase perceived value. B. the focus of an integrator is on lowering the economic value created, whereas a cost leader focuses on increasing the economic value created. C. economies of scale are more important to an integrator, while economies of scope are more important to a cost leader. D. an integrator's research and development focus is on process technologies, and a cost-leader's focus is on product technologies.

answer

A. the intent of an integration strategy is not to be the absolute lowest-cost provider because an integrator must also increase perceived value.

question

The productivity frontier represents a(n): A. convex structure (bulging inward) to capture the trade-off between value creation and production cost. B. set of best-in-class strategic positions the firm can take relating to value creation and low cost at a given point in time. C. output level a firm must operate at to achieve the break-even point. D. combination of two commodities that can be purchased with a fixed amount of budget.

answer

B. set of best-in-class strategic positions the firm can take relating to value creation and low cost at a given point in time.

question

The productivity frontier function is concave, and it captures the: A. negative correlation between economies of scale and economies of scope. B. complementary relationship between differentiation and cost-leadership strategies. C. trade-off between value creation and production cost. D. inverse relationship between experience effects and learning effects.

answer

C. trade-off between value creation and production cost.

question

A firm is said to have a competitive advantage over its rivals when it: A. experiences diseconomies of scale. B. reaches the productivity frontier. C. moves up a given learning curve. D. lowers the value gap created.

answer

B. reaches the productivity frontier.

question

The productivity frontier provides a theoretical reflection of the possible best practices at any given time. Why is this an important tool for managers? A. It suggests ways to lower the value gap created. B. Strategic positions are not fixed, and firms have to refine their positions over time. C. Firms strive to stay below the productivity frontier. D. It allows managers to maintain a less steeper learning curve as compared to their competitors.

answer

B. Strategic positions are not fixed, and firms have to refine their positions over time.

question

Which of the following statements is true of a strategic position? A. Choosing a strategic position requires making important trade-offs between value and cost positions. B. Strategic positions are fixed; they do not change like the environment. C. Differentiation and cost leadership require similar strategic positions. D. A firm is said to have a competitive advantage when it ends up with strategic positions below the productivity frontier.

answer

A. Choosing a strategic position requires making important trade-offs between value and cost positions.

question

answer

B. move down a given learning curve.

STUDY

Blue Ocean Strategy Business Management Customer Perceived Value Focused Differentiation Strategy Four Step Process Long Term Contracts Low Cost Strategy Non Price Competition

CH 6: BUSINESS STRATEGY: Differentiation, Cost Leadership & Integration – Flashcards 42 terms

Steven Colyer

42 terms

Preview

CH 6: BUSINESS STRATEGY: Differentiation, Cost Leadership & Integration – Flashcards

question

Details the actions manager take in their quest for competitive advantage when competing in a single product market

answer

Business level Strategy

question

Who- which customer segments- will we satisfy? What- customers needs, wish's & desires will we satisfy? Why- do we want to satisfy them? How- will we satisfy you customers' needs?

answer

Business level strategy questions

question

determined jointly by industry characteristics and firms characteristics more attractive, more profitable it is Better advantage if, perform similar activities different or same activities at lower costs

answer

What determines Competitive Advantages?

question

determined by value and cost positions relative to competitors. (whole foods strong value but weak cost position bc of cost structure)

answer

What determines Performance ?

question

Difference between Perceived Value, consumer V by how much consumers are willing to pay, Total Cost C Economic value created: V- C.

answer

Competitive advantage formula

question

its strategic profile based on Value creation & Cost (Determined by Business-level Strategy )

answer

Strategic Position

question

Situation that required choosing between a Cost or Value position (Higher value creation, higher cost and keep cost in check no to erode)

answer

Strategic Trade-off

question

*Differentiation Strategy *Cost Leadership *Scope of Competition: -Focused Cost-Leadership -Focused differentiation *Integration Strategy

answer

Generic Business Strategy

question

Seeks to create a higher value for customers than the value that competitors create. Unique features and control Cost to same or original levels Value Driver -Consumers willing to pay premium price. -Focus unique features to respond to customer services, customer preferences, marketing features to target market.

answer

Differentiation Strategy

question

Seeks to create same or similar value for customers by focusing attention and resources on reducing cost, enabling the firm to offer lower prices to its consumers. Value chain activities achieves low-cost proposition Cost Drivers Economic Value created= V-C, is greater than competitors

answer

Cost Leadership Strategy

question

How?

answer

Business-level Strategy addresses ____ we will compete

question

Broad- WHAT? Middle- HOW ? Focus- WHY ?*** Successful and effective companies communicate from the inside out by starting with belief of why they are in the business, how they provide it and finally what are they selling

answer

Company Communication approach

question

Product Features Customer Services Customization Complements ...... -Related to firms expertise in & Organization of different internal value chain activities - Increase in value creation exceeds the increase in costs -Conditions V > C must be fulfilled if strengths strategic position and this enhance C.A

answer

Value Drivers

question

most obvious but most important levers that managers can adjust are the product features & attributes, thereby increasing the perceived value of the product offering

answer

Product Features

question

Increase the perceived value of their firm's product/service offering by focusing on customer service and responsiveness

answer

Customers Service

question

Allows firms to go beyond merely adding differentiating features to tailoring products/services for specific customers (Mass Customization)

answer

Customization

question

the manufacture of a large variety of customized products done at relatively low unit cost. [Attainable because of technology]

answer

Mass customization

question

Identified the availability of complements as an important force determining the profit potential of an industry (Add value when consumed in tandem, quest to enhance value offerings)

answer

Complements

question

Cost of input factors Economies of scale Learning curve effect Experience curve effect.

answer

Cost Drivers

question

IT IS NOT THE SAME AS COST LEADER, may be cost leader but not price leader

answer

Price Leadership

question

one of the most basic advantages a firm can have over its rivals is access to lower-cost input factors such as raw material, capital, labor and IT services.

answer

Cost of Input factors

question

ONLY 1 COST LEADER in industry everyone else has a Cost Strategy

answer

Cost, leader vs strategy

question

decreases in cost per unit as output increase -Larger firms. -Bigger is better -Left hand side of per unit vs output graph Allows firms to: *Spread Fixed cost over larger output *Employ specialized systems & Equipment *Take advantage of certain physical properties (Cube Square Rule)

answer

Economies of Scale

question

the volume of a body such as a pipe or tank increases disproportionately more than its surface (Walmart, Costco, large QTY, boxes)

answer

Cube Square Rule

question

To be Cost-competitive. Range between Q1-Q2 bc it's the lowest point in the graph [email protected] returns of scale

answer

Minimum Efficient Scale (MES)

question

-Increase costs as output increases -"the bigger the worse effect" -Complexity of managing & coordinating raises that cost, negating scale benefit. -overly bureaucratic (large firms)

answer

Diseconomies of Scale

question

Learning by doing can also drive down cost. individuals/teams engage repeatedly in an activity, they learn from their cumulative experience (writing, computer code, developing meds, building) -As you learn, you move down the learning curve. -Steeper learning curve, more learning takes place, Learning effects can be substantial while economies are minimal.

answer

Leaning Curve

question

attempts to capture both economies of scale and learning effects. -Economy of scale allows movement down a given learning curve, based on tech production -Lower in the curve, stronger C.A.

answer

Experience Curve

question

-Trouble when comp tries to be everything to everyone. -Firms end up stuck in the middle bc didn't succeed in cost or value. -Most difficult bc value chain activities that are different from one another. *ex. cost leader: R&D tech process to improve efficiency Differentiation: R&D focus tech to add uniqueness -Is not highest value and lowest cost. As long as its below average of industry -It can lead to competitive advantage, depends on the Economic value created (V -C)

answer

Integration Strategy

question

1st- firms can charge a higher price than the cost leader, reflects higher value, generating a greater profit margin. 2nd- firm can lower price below the differentiator. To gain market share & makeup loss w/ more sales

answer

Integration allows firms to

question

-Reconciliation of fundamentally different strategic positions- diff & low cost. -Require diff internal value chain activities to balance V & C -Cost and Value are Complements NOT substitutes, provides important spill-over effects -Requires trade-offs between differentiation and low cost are reconciled.

answer

Integration Strategy Requires

question

Quality Economies of Scope Innovation Structure, Culture, and Routines

answer

Integration Drivers

question

One equipment that can produce more services/ products from the same equipment. -savings from producing two or more outputs at less cost than producing each output individually, even though using the same resources and technology

answer

Economies of Scope

question

describes any new product and process or any modification of existing ones. -Require to resolve existing trade-offs when comp pursue integration strategy.

answer

innovation

question

-Denotes its durability and reliability. -Increases products perceived value & lower its cost -simultaneously raises economic value creating, V up and lowering C

answer

Quality

question

Critical when pursuing integration strategy -Structure org that has control cost and allows for creativity. -Low-cost positioning requires an organization structure that relies on strict budget controls. -Differentiation requires creativity and customer responsiveness to thrive. (Ambidextrus organization)

answer

Structure, Culture and Routines

question

Enables managers to balance and hardness different activities in trade-off situations -Man practices ( flex & lean Manufacturing systems) -Decentralize decision-making -Others *Encourages managers to balance: -Explotation- apply current knowledge to enhance firm performance in ST. -Exploration -searching for new knowledge may enhance a firms future performance

answer

Ambidextrous Organization

question

Corporate- Concerns WHERE to compete Business- HOW to compete Functional- How to implement

answer

Formulation Strategy Levels

question

Corporate level strategy concerns that overall competitiveness of a multi-business company.

answer

Conglomerate

question

Conglomerate and other companies may decide to coordinate integrated strategy into corporate level instead of business level. Concern decisions about which industries a company should compete in and which type of business level each unit should pursue to max shareholder value.

answer

Integration at Corp-Level

question

Adapt to external environment changes. (not 180 degrees but twitches) -The only constant is change -Productivity frontier, graph Differentiation vs Cost Leadership. (movement within graph) -Value-cost relationship that captures best practice at any given time - strategic positioning within the graph is determined by strategy

answer

Dynamics of Competitive Positions

question

Goal is to not fall behind the productivity frontier. Theoretically possible best practice at any give time Strategic positioning is critical to gain C.A. Strategies enhance obtaining superior performance Rely on innovation to succeed at integration

answer

Dynamics goal

STUDY

Blue Ocean Strategy Business Management Cost Leadership Strategy Industry Principles Of Marketing Television

MGMT 434 Chapter 6 – Flashcards 20 terms

Sarah Taylor

20 terms

Preview

MGMT 434 Chapter 6 – Flashcards

question

positively correlated

answer

There exist important trade-offs between value creation and low cost because value creation and cost tend to be A. negatively correlated. B. positively correlated. C. independent of each other. D. Inversely related.

question

deliver products or services at a lower cost than competitors

answer

Firms pursuing a cost-leadership strategy seek to A. create higher value for customers and offer premium pricing. B. keep their cost structures at the same or similar levels as that of the competitors. C. deliver products or services at a lower cost than competitors. D. gain competitive advantage by reducing the value gap.

question

cost-leadership strategy

answer

Rite Shoes competes against the global leaders in the athletic shoes industry by developing and selling acceptable quality shoes at a lower price. This has been possible due to the company's large-scale production that reduces its manufacturing expenses. Which of the following generic business strategies is Rite Shoes applying in this scenario? A. differentiation strategy B. product diversification strategy C. cost-leadership strategy D. liquidation strategy

question

deliver products or services with unique features to a specific, narrow part of the market

answer

In a focused differentiation strategy, a firm seeks to A. offer low-priced products and services with a narrow focus on a niche market. B. create higher customer value than the competitors in different segments of a mass market. C. deliver products or services with unique features to a specific, narrow part of the market. D. focus on reducing the value gap to differentiate itself from the competitors.

question

can charge a premium price for its products and services

answer

Costs being equal, when a firm has a higher value gap than its competitor, it can be inferred that the firm A. can charge a premium price for its products and services. B. has achieved a competitive parity in its chosen industry. C. has lost its competitive advantage to its competitor. D. can adopt a cost-leadership strategy.

question

ElectroScape has been able to offer more perceived value than BestDigital

answer

ElectroScape Inc. and BestDigital Inc are two competitors in the consumer electronics market. The cost incurred by each company to manufacture laptops is $400 per unit. Although both the companies sell their laptops at the same price, ElectroScape has a larger market share in the laptop industry. What does this imply? A. ElectroScape has a cost advantage over BestDigital. B. BestDigital has a competitive advantage over ElectroScape. C. ElectroScape has been able to offer more perceived value than BestDigital. D. BestDigital has created a higher value gap than ElectroScape.

question

process innovation

answer

Dr. Shetty is able to drive down the cost of complex medical procedures from $100,000 to $2,000 not by doing one big thing, but rather on doing a thousand small things. This approach focuses on driving down the cost of healthcare through A. value of input factors. B. cost of input factors. C. process innovation. D. product innovation.

question

superior customer service

answer

ItsHere.com has successfully created a higher perceived value in the e-commerce industry though it offers the same products at slightly higher prices than the competitors. This has been mainly attributed to the company's easy-to-navigate website, simple return procedures, fast delivery, and cash on delivery option. Thus, the value driver for ItsHere.com is its A. lower value gap. B. superior customer service. C. economies of scale. D. availability of complements.

question

offering products at a premium price

answer

All of the following are tools primarily used to achieve cost-leadership except A. controlling the cost of inputs. B. leveraging economies of scale. C. offering products at a premium price. D. learning by doing.

question

Virtue Electronics and Cadzia Electronics share a differentiation parity

answer

While Cadzia Electronics Inc. incurs $450 to manufacture a laptop, its competitor, Virtue Electronics Inc., incurs $400. However, laptops of both the companies have been able to create the same value among customers. From the given scenario, it can be inferred that A. Cadzia Electronics has a competitive advantage over Virtue Electronics. B. Cadzia Electronics is a cost leader when compared to Virtue Electronics. C. Virtue Electronics and Cadzia Electronics share a differentiation parity. D. Virtue Electronics can charge a higher price for its laptops.

question

combining experience-based learning and process innovation to move onto a steeper learning curve

answer

There are several cost drivers that can be managed in order to establish a low-cost leadership advantage. One of the primary cost drivers is A. adding unique features that turn standard commodities into differentiated products. B. combining experience-based learning and process innovation to move onto a steeper learning curve. C. creating personalized customer service in order to minimize price sensitivity among customers. D. shifting to small-scale production processes in order to create highly customized products.

question

Learning effects occur over time, whereas economies of scale are captured at one point in time when output is increased

answer

Which of the following statements accurately brings out the difference between economies of scale and learning effects? A. While there are no diseconomies to scale, there are diseconomies to learning. B. Learning effects occur over time, whereas economies of scale are captured at one point in time when output is increased. C. Firms experience economies of scale when output increases, and they experience learning effects when output decreases. D. Economies of scale reduce cost per unit, whereas learning effects increase cost per unit.

question

learning effects and process improvements

answer

An experience curve attempts to capture both A. network effects and diseconomies of scale. B. time compression diseconomies and mass customizations. C. learning effects and process improvements. D. economies of scope and network effects.

question

reputation for quality

answer

A firm that follows the differentiation strategy is protected from the threat of new entrants primarily due to its A. diseconomies of scale. B. reputation for quality. C. low pricing. D. low cost per unit.

question

differentiated products become commoditized throughout the industry

answer

The viability of a differentiation strategy is severely undermined when the A. difference between perceived value and costs is significant. B. focus of competition shifts to value-creating features rather than price. C. differential appeal is based more on intangible resources than tangible resources. D. differentiated products become commoditized throughout the industry.

question

offer a differentiated product or service at low cost

answer

A Blue Ocean strategy typically allows a firm to A. provide unique product or service features at a premium price. B. add product features that raise costs without raising the perceived value. C. reduce the value gap created by their products. D. offer a differentiated product or service at low cost.

question

Blue Ocean strategy

answer

Good Earth Coffee Inc. is a premium cafe that is reputed for its superior customer service. The coffee shop also serves gourmet food to its customers, which allows it to charge a premium price. Coffee Basics Inc., in contrast, is a chain of coffee shops that charges the lowest price in the industry due to its self-service policy. However, Coffee Crazy Inc. has found a balance between these two strategic groups by offering acceptable levels of customer service at a price slightly above that of Coffee Basics. In this scenario, Coffee Crazy is following a A. liquidation strategy. B. product diversification strategy. C. market penetration strategy. D. Blue Ocean strategy.

question

substitutes but complements

answer

When a Blue Ocean strategy is successfully formulated and implemented, investments in differentiation and low costs are not A. value drivers but cost drivers. B. cost drivers but value drivers. C. complements but substitutes. D. substitutes but complements.

question

quite difficult to translate a Blue Ocean strategy into reality

answer

As differentiation and cost leadership are distinct strategic positions that require important trade-offs, it is A. easy to build an ambidextrous organization. B. best for firms to avoid pursuing a generic business-level strategy. C. quite difficult to translate a Blue Ocean strategy into reality. D. easy to increase value and lower cost at the same time.

question

experience curve

answer

In the _____, firms change the underlying technology while holding cumulative output constant. A. learning curve B. experience curve C. minimum efficient scale D. maximum efficient scale

STUDY

Blue Ocean Strategy Cost Per Unit Human Resource Management Minimum Efficient Scale Per Unit Cost Principles Of Marketing Strategic Management

4700 Chapter 6 – Flashcards 110 terms

Carol Rushing

110 terms

Preview

4700 Chapter 6 – Flashcards

question

A _____ primarily details the goal-directed actions managers take in their quest for competitive advantage when competing in a single product market.

answer

A. business-level strategy

question

Which of the following is a firm effect that has an impact on the competitive advantage of a firm?

answer

D. the value and the cost position of the firm relative to its competitors

question

A firm's business strategy will lead to a competitive advantage if it allows the firm to

answer

C. perform different activities than its rivals.

question

When a firm makes choices between a cost or value position to achieve competitive advantage, it is primarily involved in

answer

B. strategic trade-offs.

question

Firms pursuing a differentiation strategy primarily seek to

answer

D. create higher customer perceived value than the value that competitors create.

question

answer

B. differentiation

question

Bargain Styles Inc. is an apparel company that caters to the highly price-conscious customers. Through its simple apparel designs, acceptable quality levels, and minimal customer service, the company has been able to sell its merchandise at the lowest prices in the industry. Which of the following generic business strategies is Bargain Styles applying?

answer

A. cost-leadership

question

Why are differentiation and cost-leadership strategies referred to as generic business strategies?

answer

B. They can be used by any organization independent of industry context.

question

answer

B. automobile company that sells high-end, premium cars.

question

Wear Crush Inc. is an apparel company known for its affordable clothes that follows a cost-leadership strategy. In this scenario, Wear Crush should ideally compare its strategic position with

answer

C. an apparel company popular among price-conscious customers.

question

In a focused cost-leadership strategy, a firm

answer

C. delivers low-cost products and services to a specific, narrow part of the market.

question

Organic Eats is a restaurant that caters to the needs of a small percentage of highly health-conscious consumers. It has an all-organic, vegan menu. Since there are very few restaurants that offer the same unique services, customers are willing to pay a premium price for its products and services. In this scenario, Organic Eats is following a

answer

D. focused differentiation strategy.

question

A company that uses a differentiation strategy can achieve a competitive advantage as long as its

answer

A. economic value created is greater than that of its competitors.

question

Both Viten Electronics Inc. and JL Electronics Inc. incur a cost of $400 to manufacture a LED television. However, the economic value created by JL Electronics is more than that created by Viten Electronics. What does this indicate?

answer

C. JL Electronics can charge a premium price on its televisions.

question

A firm pursuing a differentiation strategy as opposed to a low-cost strategy will

answer

A. focus its research and development on product technologies to add uniqueness.

question

When a differentiator charges a similar price as its competitors in the same strategic group but offers more perceived value, it

answer

B. gains market share from other firms.

question

Both Blue Horizons Electronics Inc. and CLR Inc. have achieved cost parity in the television

answer

C. create greater perceived economic value than CLR.

question

Which of the following will hamper a differentiator's ability to achieve a competitive advantage?

answer

C. lower value gap

question

Whole Foods differentiates itself from competitors by offering top-quality foods obtained through sustainable agriculture. This business strategy implies that Whole Foods focuses on

answer

C. increasing the perceived value created for customers, which allows it to charge a premium price.

question

Which of the following is more of a value driver than a cost driver?

answer

A. superior customer service

question

answer

C. product features

question

Lush Roses is a chain of premium hotels around the globe that charges higher prices for its rooms and suites when compared to the average industry standards. Yet, the hotel enjoys the largest market share in the industry. This is mainly due its highly responsive staff that has a strong commitment toward achieving a 100 percent guest satisfaction. In this scenario, which of the following is the key value driver?

answer

A. superior customer service

question

When Internet service providers offer free routers for subscriptions to their wireless Internet packs, the perceived value of the service offering increases. In this case, the value driver would be

answer

D. availability of complements.

question

Body Sync Inc. is a chain of gyms. It offers a fitness package that allows its members to use the gym facilities for 12 months by paying only for 10 months. Included in the package are two health checkups and a gym kit. These add-ons by themselves are not very valuable, but as a package they can enhance the perceived value of the service offerings. In this case, Body Sync's primary value driver is

answer

C. availability of complements.

question

Value drivers contribute to a firm's competitive advantage only if

answer

A. the increase in value creation exceeds the increase in costs.

question

A firm achieves differentiation parity ideally when

answer

A. it creates the same customer value as its competitors.

question

answer

D. Shoes Cult has a competitive advantage over Aros.

question

AccuroDisk Inc. manufactures external hard disks for $32 per unit, and the maximum price customers are willing to pay is $47 per unit. TD Storage Inc. is a competitor of AccuroDisk Inc. that produces external hard disks for $37 per unit, and customers are willing to pay a maximum price of $50 per unit. What does this imply?

answer

C. AccuroDisk creates a greater economic value than TD Storage.

question

answer

C. Archer Cycles has created a greater economic value than Evia Cycles.

question

Even without differentiation parity, a firm pursuing a cost-leadership strategy can still gain a competitive advantage as long as its

answer

C. economic value creation exceeds that of its competitors.

question

Which of the following contributed the most to JCPenny's failed blue ocean strategy?

answer

D. failure to combine a cost-leadership position with a differentiation position

question

In contrast to a differentiator, a cost-leader will

answer

C. focus its research and development on process technologies to improve efficiency.

question

Juanita Apparels Inc. outsources its production to contract manufacturers located in underdeveloped nations where unskilled labor is available in plenty for very low wages. This has helped the apparel brand become a price leader in the industry. Which of the following is the key driver behind Juanita Apparel's strategic position?

answer

D. low-cost input factors

question

answer

A. low-cost input factors.

question

_____ is best described as decreases in cost per unit as output increases.

answer

A. Economies of scale

question

Economies of scale do not allow firms to

answer

C. spread their variable costs over a larger output.

question

answer

A. Minimum efficient scale

question

answer

B. 3,000-4,000 units

question

When a firm operates at the minimum efficient scale, the

answer

A. returns to scale are constant.

question

To be cost-competitive, a firm should

answer

B. operate at the minimum efficient scale.

question

answer

B. 11,000 units

question

answer

B. economies of scale.

question

DiscountHaven Inc. is a large chain of hypermarkets. It has cost benefits due to its extensive operation. The company's marketing and sales, logistics, administrative, and other such related costs get divided between a large number of product units stocked in its stores. This makes it difficult for smaller retail stores and supermarkets to compete against DiscountHaven's low prices. Thus, DiscountHaven has a competitive advantage due to its

answer

C. economies of scale.

question

A firm experiences _____ when there are increases in cost per unit as output increases.

answer

A. diseconomies of scale

question

answer

B. diseconomies of scale

question

A firm experiences diseconomies of scale when it

answer

C. produces at an output level beyond the minimum efficient scale.

question

Diseconomies of scale refer to

answer

B. increases in cost as output increases.

question

Bass Watches Inc. initially spent eight man-hours to assemble a wristwatch. But as the production doubled, the number of hours spent on assembling a watch reduced by 20 percent. This increase in productivity reduced the company's cost per unit. What is this phenomenon referred to as?

answer

A. learning-curve effect

question

Which of the following statements accurately brings out the difference between economies of scale and learning effects?

answer

A. While there are no diseconomies to learning, there are diseconomies to scale.

question

answer

A. learning effects

question

Which of the following statements is true of learning curves?

answer

B. Learning curves can be observed in manufacturing processes and professional services.

question

What does it mean for a firm to have an 80 percent learning curve?

answer

D. Every time the cumulative output is doubled, the cost per unit will decline by 20 percent.

question

A firm's learning curve is steeper than that of its competitor. What does this imply?

answer

A. The firm is at an advantage when compared to its competitor.

question

answer

A. $4

question

answer

B. 90 percent learning curve.

question

Which of the following situations will have greater effects from economies of scale than from learning effects?

answer

C. when mass manufacturing pens

question

Combining economies of learning with the existing production technology allows a firm to

answer

B. move down a given learning curve.

question

The concept of a(n) _____ attempts to capture both learning effects and process improvements at firms.

answer

C. experience curve

question

When a firm combines experience based learning and process innovation, the firm

answer

A. jumps to a steeper learning curve.

question

Allure is a cosmetic brand that pursues a cost-leader strategy. Which of the following statements is true of the cosmetic brand?

answer

A. It appeals to the price-conscious buyers.

question

A cost-leader is protected from the threat of new entrants primarily due to its

answer

C. economies of scale.

question

According to the five forces model, which of the following is viewed as a major risk to a business pursuing a cost-leadership strategy?

answer

B. innovation that allows competitors to emerge with more economical replacements

question

Which of the following sources of differential appeal is least effective in helping a firm sustain its advantage?

answer

D. observable product features

question

A differentiator is least likely to be threatened by increases in input prices due to powerful suppliers when the

answer

A. differentiator is able to create a significant difference between perceived value and current market prices.

question

A differentiation strategy works best when a

answer

D. firm has intangible resources, is able to pass on increases in supplier cost to the customer, and its differentiation appeal creates customer loyalty.

question

In a successful _____ strategy, the trade-offs between differentiation and low cost are reconciled.

answer

A. blue ocean

question

The primary goal of a firm pursuing a blue ocean strategy should be to

answer

C. offer a differentiated product or service at a low cost.

question

A successfully implemented blue ocean strategy allows a firm to

answer

A. charge a higher price than the cost-leader in the industry.

question

answer

D. blue ocean strategy

question

Which of the following statements accurately brings out the difference between economies of scale and economies of scope?

answer

C. Economies of scope are the savings that come from producing two or more outputs from the same resources, whereas economies of scale are decreases in per-unit cost with increases in output.

question

Which of the following best explains why a blue ocean strategy is difficult to implement?

answer

B. It requires the reconciliation of fundamentally different strategic positions—differentiation and low cost.

question

Which of the following provides an example of a firm in a red ocean?

answer

A. Chique Apparel offered clothing at a low price but failed to differentiate its product as being exclusive.

question

PureRinse Inc. is a brand reputed for its wide variants of body wash that introduced its range of shampoos and skin moisturizers a few years ago. Since most of its products could be produced using the same resources and technology, the company's cost structure lowered, while its product portfolio widened. In this scenario, which of the following value and cost drivers is PureRinse applying?

answer

B. economies of scope

question

answer

C. quality.

question

Which of the following drivers simultaneously increases value while lowering cost?

answer

D. innovation

question

When a firm is successful at pursuing a blue ocean strategy,

answer

A. investments in differentiation are complements.

question

When a blue ocean strategy goes bad, a firm has neither a clear differentiation nor a clear cost-leadership profile. This situation is referred to as

answer

A. stuck in the middle.

question

A _____ is a graphical depiction of a company's relative performance vis-à-vis its competitors across the industry's key success factors.

answer

D. strategy canvas

question

A blue ocean strategy differs from a low-cost strategy in that

answer

A. the intent of a blue ocean strategy is not to be the absolute lowest-cost provider because a blue ocean must also increase perceived value.

question

A value curve indicates a lack of effectiveness in a firm's strategic profile when it

answer

B. zigzags.

question

Which of the following describes an airline that is most likely stuck in the middle?

answer

C. Just Right Airline offers high-quality beverages and meals, plush airport lounges, only a few connections via hubs domestically, poor customer service, and low prices.

question

A blue ocean strategy tends to be successful only if a firm is able to rely on a _____ that allows it to reconcile trade-offs.

answer

B. value innovation

question

Although JetBlue used a blue ocean strategy to achieve an initial competitive advantage, it failed to maintain this advantage. Which of the following provides the best reason for this development?

answer

B. It failed to refine its strategic position over time.

question

Which of the following statements is true of a strategic position?

answer

A. Choosing a strategic position requires making important trade-offs between value and cost positions.

question

Which of the following is a key question managers must answer to formulate an appropriate business-level strategy?

answer

B. How will we satisfy our customer needs?

question

Which of the following examples uses a focused differentiation strategy?

answer

D. a cosmetics brand that offers superior-quality skin lotion priced at 100 dollars per bottle

question

Tangles Costume Jewelry offers slightly lowerquality merchandise than competitors at a much lower price. What strategy is Tangles using?

answer

A. cost-leadership

question

Which of the following best describes a strategic trade-off?

answer

C. the tension between value creation and the pressure to keep cost in check

question

Product features, customer service, and complements are all examples of important

answer

D. value drivers.

question

How does availability of complements act as a value driver?

answer

D. Complements add value to a product when they are consumed in tandem with it.

question

What is a value gap?

answer

B. economic value creation

question

Higher value tends to require

answer

A. higher costs.

question

Handy Helper, Inc. produces decent-quality woodworking tools at a mid-range price. Master Tools, Inc. produces high-quality tools also at a mid-range price. Master Tools gained a competitive advantage because it has ______ than Handy Helper.

answer

C. a higher value gap

question

What must a cost-leadership strategy accomplish to be successful?

answer

B. It must reduce the firm's cost below that of its competitors while offering adequate value.

question

How is differentiation parity different from cost parity?

answer

D. Differentiation parity deals with value not pricing.

question

Gotta Get Chocolates, Inc. has recently introduced a new production method that will make the production of their chocolates more cost-effective. Which of the following will most likely be the result of this innovation?

answer

A. jumps to a steeper learning curve

question

Which of the following is an accurate statement about learning effects?

answer

B. Learning effects involve the accumulation of output over time.

question

Cool Cat Inc. has dominated the high-end refrigerator market by producing a reliable refrigerator with many bonus features that appeal to customers. Recently, a competitor has developed a refrigerator that offers many of the same features as Cool Cat's refrigerator. Which of the following will most likely help Cool Cat to keep its competitive advantage?

answer

B. the loyalty of its customers

question

How is a cost-leader protected from threats from powerful buyers?

answer

A. It is more able to absorb price increases through accepting lower profit margins.

question

Which of the following scenarios would threaten a firm that uses a differentiation strategy?

answer

C. The firm's focus shifts to price rather than value-creating features.

question

Help Yourself Inc. publishes many types self-help books. Recently, the consumer demand for winter gardening books has increased significantly. Although Help Yourself has limited production facilities, it has increased the production of these books to meet this demand. It hopes to get books to the market faster than its closest competitor, who is also increasing the production of winter gardening books. Which of the following aspects of business-level strategy has Help Yourself accomplished?

answer

C. It has exploited external opportunities.

question

Which of the following is primarily a cost driver?

answer

D. economies of scale

question

Clean Machine Inc. produces a high-quality dishwashing machine that is reliable and durable. How would this product most likely act as a cost driver?

answer

C. reduce the total cost of ownership

question

Which of the following is primarily a value driver?

answer

D. complements

question

How did Marriott use economies of scope to achieve greater economic value than its competitors?

answer

D. Marriott lowered its cost structure by sharing its production assets over a several types of hotels, which increased its menu and thus its differentiated appeal.

question

As it takes less and less time to produce the same output, learning curves usually

answer

B. go down.

question

To initiate a strategic move that allows a firm to open up new and uncontested market space through value innovation, managers must address four key questions when formulating a blue ocean business strategy. These questions focus on

answer

C. lowering cost and increasing perceived customer benefits.

question

The pursuit of both differentiation and low cost at the same time in a way that creates a leap in value for both the firm and consumers is called

answer

D. value innovation.

question

Trader Joe's successfully used a blue ocean strategy by offering lower cost food than Whole Foods for the same market of patrons. By doing this, Trader Joe's was able to

answer

A. gain a market share and make up the loss in margin through increased sales.

question

What does blue ocean strategy attempt to reconcile?

answer

A. the conflicting requirements of two generic strategies

STUDY

Blue Ocean Strategy Time And Place Utility

MKTG 420: Quiz 2 – Flashcards 15 terms

Kenneth McQuaid

15 terms

Preview

MKTG 420: Quiz 2 – Flashcards

question

most readers of a marketing plan are busy and value condensed information

answer

"In a marketing plan, the executive summary should be a complete but concise overview of the entire marketing plan because

question

What is our operating philosophy?

answer

Which of the following is one of the five basic questions that a good mission statement should answer?

question

Later you can measure to see if the objective was accomplished

answer

All objectives should be SMART because

question

Sharing intellectual property

answer

According to Case 2 in our book, which of the following is NOT a major contributor to Apple's success?

question

What do we want to become?

answer

When creating a corporate vision statement, organizations are attempting to answer which of the following questions

question

competitive advantage

answer

When a firm possesses capabilities that allow it to serve customers needs better than the competition, the firm is said to have a

question

situational analysis

answer

The Strategic planning process always begins with an in-depth

question

corporate strategy

answer

"All organizations need a __________, the central scheme for utilizing and integrating resources in the areas of production, finance, research and development, human resources, and marketing to carry out the organization s mission and achieve desired goals and objectives

question

Because top managers must decide whether the marketing plan is the best use for the organization s scarce resources

answer

in the context of marketing planning, why is it vital that the marketing plan be capable of selling itself to top management?

question

Value Proposition

answer

The statement that articulates the experience that a customer can expect from doing what an organization wants them to do is called a?

question

both a Strength and a Weakness

answer

During our discussion of the Apple case in class we classified Apple s Prestige Pricing as:

question

evaluation and control

answer

In developing a marketing plan, the section on goals and objectives defines the parameters by which the firm will measure actual performance. In this respect, the goals and objectives section is tied closely to the __________ section of the marketing plan.

question

It clearly outlines the organization s marketing activities.

answer

Which of the following statements best describes the nature of a marketing plan?

question

An estimate of the market potential of your product

answer

Which of the following is NOT an element of a Value Proposition?

question

mission statement

answer

Johnson & Johnson s actions were guided by their _________ during the 1978 Tylenol cyanide tragedy.

STUDY

Blue Ocean Strategy Consumer Behavior Customer Lifetime Value Fast Food Restaurant Marketing Need For Power

MKT 302 Final – Flashcards 124 terms

Tyree Bender

124 terms

Preview

MKT 302 Final – Flashcards

question

Individual differences have little effect on the value experienced by consumers and the reactions consumers have to consumption

answer

False

question

The core concept of consumer behavior is value

answer

True

question

Price is the best indicator of value.

answer

False

question

The Just Meaningful Difference represents how much stronger one stimulus has to be relative to another so that someone can notice that the two are not the same

answer

False

question

On his way to work, Hank passes many billboards and many ads play on the radio while he is driving, but he only uses and hears a few of them. This is an example of selective labeling

answer

Flase

question

All things equal, a consumer is more likely to pay attention to stronger stimuli than to weaker stimuli

answer

True

question

A researcher measuring consumers attitudes toward different brands on a scale of 1 to 10 is using qualitative research

answer

False

question

Data generated from quantitative research are considered "researcher-dependent"

answer

False

question

The Ritz-Carlton Hotel has a culture that embodies the importance of creating value for guests among all employees. One way this is implemented is giving the front desk employees the authority to correct a problem presented by a guest without having to have approval from a manager. Which type of orientation does this company embrace?

answer

market orientation

question

value is derived from a product that helps a consumer solve problems and accomplish tasks

answer

Utilitarian

question

When consumers fail to attach meaning to certain stimuli that are not personally relevant, this is known as:

answer

Selective perception

question

Black and Decker is well known for power tools. However, if the company thinks of itself merely as a power tool company instead of a company that delivers the benefits users want, it could be taking a short-sighted focus of its business. If a technologically-advanced device is developed that could replace the need for power tools to deliver those benefits, this company could go out of business. That is, Black & Decker could suffer from:

answer

Marketing Myopia

question

Tom goes to the grocery store to buy snacks for his tailgating party. When in the chips aisle, Tom sees a sign next to the Doritos that says "2 for 1". Tom understands that this marketing message means the Doritos are on sale, and he can buy two bags for the price of one. Tom's understanding demonstrations which step in the perception process?

answer

Comprehension

question

A company embracing differentiated marketing will:

answer

serve multiple market segments each with a unique products offering

question

Every Disney employee is thought of and trained to be a host or hostess with the express goal of making sure all guests fell good when they are there. Which of the following refers to the feelings visitors experience while they are there and long after they've left?

answer

Affect

question

A "slow" fast food restaurant represents which of the following?

answer

Low utilitarian value, low hedonic value

question

Consumer behavior is the set of value-seeking activities that take place as people go about addressing realized needs.

answer

True

question

Community Trust Bank is analyzing its customer data to determine if groups other than simply consumer and business customers can be identified. It is looking at the frequency of branch visits, use of ATMs, online banking activity, loan activity, and account balances for each customer. The bank has identified three groups of customers based on these factors and is considering offering different products to better meet the needs of each group. What marketing concept do these different groups of customers represent?

answer

market segmentation

question

Which of the following is an external influence on consumer value?

answer

social influences

question

Kayla is engaged in research that seeks to explain the inner meanings and motivations associated with purchasing clothing. She records and analyzes the words that consumers use to describe events and observes shoppers in stores. From that, she develops an understanding of what motivates shoppers. What types of research is Kayla performing?

answer

qualitative research

question

Hanna believes that Mac computers are better than Windows-based computers because they are not as vulnerable to computer viruses. This thinking or mental process that Hannah is engaged in represents which psychological element?

answer

cognition

question

Which of the following is an example of a fixed reinforcement schedule?

answer

Delta Sky Miles gives a free flight every 35,000 miles earned

question

All of the following are elements of the marketing mix EXCEPT:

answer

planning

question

Which of the following is NOT a discipline in which consumer behavior has roots?

answer

accounting

question

Which of the following represents the value equation?

answer

Value = what you get - what you give

question

Energizer batteries used to feature the Energizer Bunny in television commercials, often in unexpected ways to catch viewers off-gaurd. Commercials seemed to be boring commercials about a fake brand of a mundane product, when all of a sudden the Energizer Bunny would come on the screen banging a drum. After a while though, consumers had been exposed to the commercial so many times that they began to expect the bunny to march into the picture beating his drum so they tended to tun the commercial out. Consumers response to this over-exposure represents the process of:

answer

habituation

question

Which theory proposes that much of consumer behavior can be explained by the match between a consumers self-concept and the image of typical uses of a product?

answer

self-congruency theory

question

Which of the following is a way to enhance consumers attention?

answer

all of these choices

question

Harley Davidson is portrayed as a rugged, exciting brand. These dimensions make up Harley Davidson's:

answer

Brand personality

question

Which of the following is a typology that assesses consumer psychographics?

answer

VALS

question

Emotions are considered ______ because they involve both psychological processing and physical responses

answer

psychobiological

question

Which of the following is a description of the "C" component the OCEAN Personality inventory?

answer

persevering, orderly, and trustworthy

question

Utilitarian motivation is the desire to acquire products that can be used to accomplish things

answer

True

question

"Emotional labor" is performed by service workers who must overly manage their own emotional displays as part of the requirements of their job.

answer

True

question

Human motivations are oriented toward two key groups of behavior: homeostasis and self-improvement

answer

True

question

_____ refers to a change in behavior that occurs simply through associating some stimulus with another stimulus that naturally causes a reaction.

answer

Classical conditioning

question

A network of mental pathways linking knowledge within memory is called a(n):

answer

associative network

question

Coca-Cola is a(n) ________ of the soft drink product category because it is the brand within the soft drink scheme that is the single best representation of that category.

answer

exemplar

question

_____ refers to the personal relevance toward, or interested in, a particular product

answer

Involvement

question

______ is the totality of thoughts, emotions, intentions, and behaviors that a person exhibits consistently

answer

Personality

question

Which topic reflects the ideas that consumers perceive themselves in one way, and that there may be a gap between that perception and how they want to be seen by others?

answer

self-concept

question

Which of the following was NOT a heuristic that we discussed in class and was on your handout?

answer

frequency heuristic

question

Which of the following consists of product alternatives that are top of mind for consideration in decision making?

answer

evoked set

question

When consumers make a decision regarding which laptop computer to purchase, they consider things such as hard disk size, weight, screen size, and so on and the benefits received from each of these features. These attributes, features, and benefits form the consumer's ______ when comparing alternatives.

answer

evaluative criteria

question

Lance is trying to be the top salesperson in his company because he wants the increased income and the recognition he'll receive for achieving that goal. Which type of power is influencing Lance's behavior?

answer

reward power

question

Which psychologist is famous for his experiment involving three lines, which demonstrated the prevalence of conformity in humans?

answer

Asch

question

Social ties in secondary groups are very strong.

answer

False

question

Social power can be classified into three categories: natural, imagined, and earned.

answer

False

question

Shilling is the practice of compensating consumers to talk about, or promote products without disclosing that they are working for the company

answer

True

question

Meaning transference begins with culture

answer

True

question

Attribution theory proposes that consumers enter into a consumption experience with predetermined cognitive expectations of a products performance.

answer

False

question

Hans is considering three criteria when selecting a laptop computer: weight, memory, and speed. The criteria that are related to his actual choice are called:

answer

determinant criteria

question

The De Beers diamond company advises men to spend two months salary for a diamond engagement ring for their beloved because "A Diamond is Forever". Interestingly, diamond engagement rings didn't have much meaning in the US prior to 1930 or so. Therefore, diamond engagement rings derive their value from culture, which is a process called:

answer

meaning transference

question

Which type of decision rule allows consumers to select products that may perform poorly on one attribute by compensating for the poor performance by good performance on another attribute?

answer

compensatory rule

question

What is difference between consumer misbehavior and consumer problem behavior?

answer

Consumer misbehavior describes behavior deliberately harmful to another party in an exchange process, whereas consumer problem behavior refers to behaviors that are seemingly outside of a consumers control

question

The Consumer Bill of Rights includes all of the following EXCEPT:

answer

the right to fair prices

question

Meg went to a local nail salon for a pedicure, and got a nail infection on her left foot the next day. She didn't go back to the shop to complain, but she told all of her friends about it and said never to go there. One of her friends suggested she should go back there and complain and demand compensation for her medical expenses and at least get her money back for the pedicure. Meg was just disgusted and didn't even want to go back there to complain. If she ever decides to get another pedicure, she certainly won't go back to that shop. Why might the nail shop want Meg to complain about her problem as a result of their service?

answer

Meg's complaint will be a vulnerable source of information if the shop does not know customers are getting infections after their services

question

Perceptual attributes are not easily recognized

answer

False

question

Superordinate categories represent the highest level of catergorization

answer

True

question

Penny bought a dress to wear to a wedding. She did't cut the price tag out, and the day after the wedding, she took the dress back to the store where she purchased it and returned it for her money back. Penny's behavior is called:

answer

retail borrowing/deshopping

question

Tess is comparing dishwashers and has decided to select the brand that she believes is the quietest, which is the most important attributes for her. Which decision rule is Tess using?

answer

lexicographic

question

Complete the following quote form Russell (2011) that was discussed in class: "A _____ is what you are selling; a _____ is what the customer is looking for."

answer

features; benefits

question

Gwen was not satisfied with her last visit to Starbucks and she attributed the cause to the other customers that were present while she was there. Which element of attribution theory does this represent?

answer

locus

question

For the FTC to consider an ad to be deceptive, which of the following must occur?

answer

both b and c

question

In class, which discussed example of the marketing misbehavior of planned obsolescence?

answer

e-waste in Hong Kong and how planned obsolescence contributes to the problem

question

David is selling a set of knives that is very expensive for the entire set. One tactic he uses is to ask people to try the paring knife and then ask them to purchase it for $5.00. Then he asks them to try other knives until he eventually works up to asking consumers to purchase the entire set of knives. Which selling technique is David using?

answer

foot-in-door technique

question

In which of the following conditions is a consumer more likely to experience cognitive dissonance?

answer

The decision is difficult to reverse

question

Which of the following is an underlying attribute of an automobile?

answer

new car smell

question

Rocco's Seafood restaurant claims to have the "best shrimp in town". This is an example of:

answer

puffery

question

Many consumer researchers propose that consumer cognitively compares their own level of inputs and outcomes to those of another party in an exchange. Which theory are these researchers advocating?

answer

equity theory

question

Less than half of customers experiencing some dissatisfaction complain to management

answer

True

question

Switching is a possible post consumption behavior

answer

True

question

A negotiable product is one that has little of no potential to create value of any type

answer

False

question

The Consumer Bill of Rights stand as a foundation of the consumerism movemnt

answer

True

question

Disney tries to create a magical experience for guests visiting its parks and resorts. The company knows that positive emotions can become stored as part of the meaning visitors have for Disney, and the company wants consumers to come back again and again. Positive emotion that becomes stored as part of the meaning of Disney for consumers is called:

answer

schema-based affect

question

Kayli was going to have a baby and was upset when the nurse attending to her had purple hair, tattoos, and a pierced nose. She didn't seem to fit the type of person Kayli expected in this environment, which means the nurse did not match Kayli's _____ for a nurse

answer

social schema

question

Most consumers in the United States have a schema representing a wedding that has the bride coming down the aisle with her father, who gives her to the waiting groom. After the ceremony, the groom then kisses the bride. A scheme representing an event such as a wedding is called a:

answer

script

question

The looking-glass self is another term for a consumer's ideal self

answer

False

question

Lifestyles are completely determined by personality

answer

False

question

Personality is made up of all the emotions consumers experience

answer

False

question

The best way to really learn something is to repeat it over and over.

answer

False

question

The process of comprehension is influenced very little by internal factors within the consumer.

answer

False

question

A schema represents a consumer's entire associative network.

answer

False

question

Humor appeal is a ______, and endorser attractiveness is a _____.

answer

message effect; source effect

question

The speculation that teenagers around the world are more similar to each other than to people from other generations in the same culture is called:

answer

world teen culture

question

The phenomenon in which consumers choose membership in micro-cultures in an effort to stand out of define themselves from the crowd is called:

answer

divergence

question

Which of the following describes the hierarchy of effects that is most common for impulse purchases?

answer

affect-behavior belief

question

Jill is an active member of her very conservative church. However, on the weekends, she likes to ride Harley Davidson motorcycles with her friends. One day, while out on a motorcycle ride, she sees some people from church that act surprised to see her riding a motorcycle. Jill feels uncomfortable, because she is experiencing:

answer

role conflict

question

Mitch is a sales representative for Caterpillar, the world's largest manufacturer of heavy equipment. He is moving to China because of the rapid expansion in that country and the opportunity it offers Caterpillar. He is undergoing extensive training, however, because the business is conducted differently in China compared to the U.S. For Example, Mitch is learning that business relationships are backed by reciprocity, or doing each other favors. This cultural norm is known as:

answer

guanxi

question

Which term refers to specific attempts to change attitudes?

answer

persuassion

question

According to the ABC approach to attitudes, attitudes are made up of three important components. When an individual thinks, " This car gets good gas mileage." which ABC component has taken place?

answer

cognition

question

According to Gilbert's social stratification classifications, _______ are considered to be the highest social class (most education/income) and ________ are the lowest (least education/income)

answer

Capitalist class; under class

question

Which of the following is NOT one of the "Nine Nations of North America"?

answer

all of the above are included in the Nine Nations of North America

question

According to the Elaboration Likelihood Model of persuasion the term "elaboration" refers to what?

answer

the degree to which the message recipient thinks about product-related arguments and information within the ad

question

On the first day of a new semester of classes, you notice a student very nosily eating potato chips during class. The students is disrupting the lecture, and you notice many fellow students nearby giving him annoyed looks. The professor asks the student to save the chips for after class. The reaction to the fellow students and professor is an example of a(n):

answer

cultural sanction

question

The elaboration likelihood model proposes two routes to to persuasion. The _______ route is used with high message involvement and the _______ route is used with low message involvement.

answer

central route and peripheral route

question

The video clip in class about Appalachia focused mostly on the influence that this micro-culture has on:

answer

language

question

Ken is purchasing a new computer for his family. To make this purchase, he learns as much as he can about companies, and then decides which one he likes based on that information. Only then will he actually purchase a computer. According to the hierarchy of effects approach the attitudes, which hierarchy best describes Ken's actions?

answer

high involvement

question

Brand X is inexpensive, but is not very durable. Assumer that research has shown that consumers care more about low price than durability. According to the Fishbein Model, which of the following would be the best strategy for Brand X to help consumers from positive attitudes about their products?

answer

Emphasize their low price through advertising

question

According to the ABC model of attitudes, attitudes posses three important components: affect, beliefs, and cognition.

answer

False

question

According to the PBS video "People like Us" America is made up of different tribes.

answer

True

question

Jill, an American, recently moved to Germany. She is slowly learning German culture, a process which is called ethnocentrism.

answer

False

question

Reflection is a process of imitating others' behavior.

answer

False

question

Generally, Western societies (e.g. USA) tend to be more collectivist, whereas Eastern nations (e.g. Asia) tend to be more individualist.

answer

False

question

Income and age are the two most recognizable determinants of social class.

answer

False

question

The "Big 3" micro-cultures in the U.S. are Asians, African-American, and Italians.

answer

False

question

Most teens worldwide have similar political and religious ideals

answer

False

question

Conner is preparing to take the Certified Public Accounts (CPA) exam. He has spent five years in college and now wants to be accepted into this group of professional accountants. For Connor, CPA's represent which type of group?

answer

associative group

question

A dissociative group is a group:

answer

to which a consumer does not want to belong

question

Vince is really into cars and seeks out information on cars simply because he is interest in them. Which type of search does this represent?

answer

ongoing search

question

Using online technologies to facilitate WOM by having consumers spread marketing messages by forwarding emails to their friends is known as:

answer

viral marketing

question

On her weekly grocery shopping trips, Anna buys orange juice for her family. She does a medium amount of search fro information regarding prices and also looks at packaging while evaluating orange juice brands. She usually chooses Tropicana, but is open to other alternatives. Which type of decision making is Anna using for this product?

answer

limited decision making

question

All of the following are a type of risk EXCEPT:

answer

functional risk

question

Which of the following is NOT a situational influence?

answer

enduring involvement

question

Epistemic shopping activities are oriented toward a specific, intended purchase or purchases.

answer

False

question

Heuristics are used to make better, more optimal purchase decisions.

answer

False

question

Situational influences can be classified into on of two categories: utilitarian and hedonic.

answer

False

question

Physical risks is the type of risk associated with how other consumers will view the purchases.

answer

False

question

The rational decision-making perspective fits very well with the concept of utilitarian value.

answer

True

question

With limited decision making, no comparison between brands is done.

answer

False

question

______ occurs when an individual yields to the attributers and behaviors of other consumers.

answer

Conformity

question

Many consumers shop at Wal-Mart every week even though they don't really like shopping there. They don't have any real attachment to the store, it's just that they don't want to pay higher prices elsewhere. Which of the following best describes this phenomenon of repeatedly shopping at a store without a commitment or attachment to the store?

answer

brand inertia

question

The term ______ is sometimes used to refer to the physical characteristics that make up a retail environment, such as in-store displays, window signs, music, and lighting.

answer

atmospherics

question

According to research, what is the relationship between product knowledge and amount of search?

answer

people with a medium amount of product knowledge search the most

STUDY

Blue Ocean Strategy Marketing Principles Of Marketing

MKTG Policy and Strategy Chapter 4-5 – Flashcards 40 terms

Tommy Mason

40 terms

Preview

MKTG Policy and Strategy Chapter 4-5 – Flashcards

question

Its structured nature ensures that data and information are correctly categorized.

answer

All of the following are benefits of SWOT analysis EXCEPT: a. It is simple to use. b. Its structured nature ensures that data and information are correctly categorized. c. It promotes managerial collaboration. d. It can synthesize and integrate diverse information. e. It can reduce costs.

question

Focus on the resources possessed by the firm and/or its competitors that are the true causes for the firm's strengths, weaknesses, opportunities, and threats.

answer

With respect to the text's advice in conducting a SWOT analysis, which of the following best describes "Look for Causes, Not Characteristics"? a. Break down clichés into meaningful customer-oriented issues. b. Refrain from conducting a single generic analysis for the entire organization. c. Gauge the actual perceptions of customers that give rise to the firm's strengths and weaknesses. d. Focus on the resources possessed by the firm and/or its competitors that are the true causes for the firm's strengths, weaknesses, opportunities, and threats. e. Clearly differentiate internal issues from external issues.

question

list their marketing options or strategies as opportunities.

answer

The failure to understand the difference between internal and external issues is one of the major reasons for a poorly conducted SWOT analysis. This happens because managers:

question

resources and relationships

answer

Strengths are typically based on the existence and nature of the __________ possessed by the firm. Weaknesses stem from a lack of these important factors.

question

when the strength can be tied to satisfying a customer need

answer

In terms of SWOT analysis, when does a strength become a capability of the firm?

question

Opportunities and threats

answer

__________ typically occur within the competitive, customer, economic, political/legal, technological, and/or sociocultural environments of the firm.

question

The manager must find ways to transform key threats into strengths.

answer

To successfully utilize SWOT analysis as a catalyst for strategic planning, the marketing manager must focus on several important issues. Which of the following IS NOT one of these issues? a. The manager must look beyond the firm's current product offerings. b. The manager must find ways to connect the firm's strengths to its opportunities. c. The manager must strive to convert weaknesses into strengths. d. The manager must attempt to minimize the firm's limitations. e. The manager must find ways to transform key threats into strengths.

question

operational excellence.

answer

By focusing on efficiency of operations and processes, lower costs, and delivering good value, Southwest Airlines attempts to build a competitive advantage based on:

question

product leadership.

answer

Microsoft's Windows platform dominates the market for personal computer operating systems. By continuously upgrading and stretching the technology underlying its Windows system, Microsoft is pursuing a strategy of:

question

target markets

answer

Firms possessing certain core competencies are more likely to create competitive advantages based on these competencies. However, before a competitive advantage can be translated into specific customer benefits, the firm's __________ must recognize that its competencies give it an advantage over the competition.

question

strategic focus.

answer

The overall concept or model that guides the firm as it weaves various marketing elements together into a coherent strategy is called its:

question

aggressive

answer

Expansion and growth, with new products and new markets, are the keys to Google's __________ approach to marketing strategy. Google uses this approach because it possesses many different strengths that coincide with key market opportunities.

question

many internal strengths and many external threats.

answer

May firms, like the Altria Group, focus on diversification in their marketing strategies because they possess:

question

value curve

answer

As a tool of Blue Ocean Strategy, the strategy canvas provides a way to visualize the firm's strategy relative to other firms in the industry. The central portion of the strategy canvas is the __________, or the graphic representation of the firm's relative performance across its industry's factors.

question

Which factors used throughout the industry should be copied?

answer

With regard to Blue Ocean Strategy, the Four-Actions Framework is designed to challenge traditional assumptions about marketing strategy by asking four key questions. Which of the following IS NOT one of these questions? a. Which factors should be reduced well below the industry's standard? b. Which factors should be raised well above the industry's standard? c. Which factors should be created that the industry has never offered? d. Which factors that the industry takes for granted should be eliminated? e. Which factors used throughout the industry should be copied?

question

broad, qualitative statements of desired accomplishments.

answer

Marketing goals can be defined as:

question

It makes the goal more motivational and promotes continuous improvement

answer

Why is it important that marketing goals involve some degree of intangibility?

question

Progress is impossible to track without measurable performance targets.

answer

Your supervisor repeatedly informs you that "Goals without objectives are essentially meaningless." What is the rationale for such a philosophy?

question

continuous objective.

answer

In the marketing strategy for Amazon, the following statement appears: Our strategy is designed to increase the percentage of repeat customers from 80 percent to 85 percent in the next 12 months. This statement is an example of a:

question

It promotes the development of discontinuous objectives.

answer

In terms of setting goals and objectives, what is considered to be one of the major benefits gained from applying for the Malcolm Baldrige National Quality Award?

question

consumers recognize that they have unsatisfied needs.

answer

The consumer buying process begins when:

question

Needs are based on discrepancies between actual and desired satisfaction, whereas wants occur relative to specific products that can fulfill a need.

answer

From the viewpoint of the consumer buying process, what is the difference between a need and a want?

question

the degree of risk

answer

With respect to the consumer buying process, __________ is perhaps the most important factor that affects the time, effort, and expense dedicated to the search for information.

question

evoked set

answer

If a researcher were to ask consumers to quickly name the top 3 brands of computers they might consider purchasing, the most common brands in the __________ would most likely be Dell, Apple, and HP.

question

cognitive dissonance.

answer

After enrolling in the MBA program at Minor State University, Sheri began having second thoughts. Although MSU seemed to be a good choice based on location, reputation, and price, Sheri was not convinced she had made the right choice. Sheri is suffering from:

question

The complexity of the purchase

answer

__________ is/are the primary reason why the consumer buying process varies across customers, products, and situations.

question

Business buyers are less likely to be dependent upon each other.

answer

Each of the following statements describes a unique characteristic of the business buying process EXCEPT: a. Business buyers have an easier time identifying their needs as compared to consumers. b. Business buyers must be keenly aware of both hard and soft costs. c. Groups of people, rather than individuals, often make purchase decisions. d. Business buyers are less likely to be dependent upon each other. e. Business buying is sometimes based on reciprocity where each firm buys products from the other.

question

mass marketing

answer

The basic assumption of __________ is that all customers in the market have similar needs and wants that can be reasonably satisfied with a single marketing program.

question

market concentration

answer

The main advantage of __________ is specialization, as it allows the firm to focus its resources toward understanding and serving a single segment.

question

one-to-one marketing

answer

Firms that sell luxury products, custom-made products, and services often take the time to significantly modify their products in an effort to precisely match the needs of individual customers. These firms are pursuing what type of approach to market segmentation?

question

mass customization.

answer

Advances in supply chain management now allow companies to customize products to meet the needs of individual customers on a mass scale. This individualized approach to market segmentation is called:

question

A college creates a custom degree program to match your unique needs.

answer

Which of the following IS NOT an example of mass customization? a. A college creates a custom degree program to match your unique needs. b. A customer orders a custom teddy bear from Build-A-BearWorkshop.com. c. Dell offers fully customized computers based on your needed configuration. d. A bank employee logs into the e-procurement system to browse a fully customized catalog of office supplies. e. You order a customized vase of flowers from 1-800-Flowers.com.

question

The segment has no synergy with the firm's mission.

answer

Although a market segment can meet all criteria for viability, a firm may choose to not pursue the segment. Which of the following is a reason why this might occur? A. competitor has already targeted the segment. B. Targeting the segment could lead to antitrust concerns. C. The segment has no synergy with the firm's mission. D. The segment is difficult to reach via communication and/or distribution. E. The segment's members are not easily identifiable.

question

Behavioral

answer

__________ segmentation is the most powerful form of segmentation in consumer markets because it uses actual product usage to make distinctions among market segments.

question

The firm must clearly understand the basic needs and benefits sought by different consumer groups.

answer

What is the key to using behavioral segmentation successfully in consumer markets?

question

demographic segmentation

answer

What type of segmentation divides consumer markets into segments using individual factors such as gender, age, income, and education?

question

psychographic

answer

One of the most successful and well-known tools of __________ segmentation is VALS™ developed by Strategic Business Insights.

question

organizational culture

answer

Which of the following IS NOT a typical basis used to segment business markets? a. type of organization b. organizational characteristics c. benefits sought d. organizational culture e. relationship intensity

question

market specialization

answer

Firms engage in __________ when their intimate knowledge and expertise in one market allows them to offer customized marketing programs that not only deliver needed products but also provide needed solutions to customers' problems.

question

mass market targeting

answer

Only the largest firms can execute __________, which involves the development of multiple marketing programs to serve all customer segments simultaneously.

STUDY

Blue Ocean Strategy Industrial Organization Marketing Markets

MARKETING-CH 15-KOTLER&TRIAS LATERAL MARKETING STRATEGY – Flashcards 19 terms

Ann Ricker

19 terms

Preview

MARKETING-CH 15-KOTLER&TRIAS LATERAL MARKETING STRATEGY – Flashcards

question

Target marketing includes the three interrelated activities of:

answer

market segmentation, targeting, and product positioning

question

The process of dividing a market into groups (segments) of individuals who share common characteristics.

answer

market segmentation

question

______typically effected by drilling down into markets, bypassing layers that are deemed undesirable until desirable layers of associated markets have been identified; appealing segmets are then targeted.

answer

market segmentation

question

The drill-down orientation of market segmentation.

answer

vertical segmentation

question

A viable method for segmenting markets; the practice of drilling down into markets helps reduce missed opportunities.

answer

vertical segmentation

question

To assist marketers in segmentation results by identifying missed opportunities. This segmentation termed by Philip Kotler and Fernando Trias de Bes

answer

Lateral Marketing Strategy

question

Developed by Philip Kotler and Fernando Trias de Bes to encourage marketers to look broadly at their markets in an attempt to identify opportunities to serve customer groups that have previously been overlooked, courtesy of the drill-down orientation of vertical marketing.

answer

Lateral Marketing Strategy

question

Requires healthcare marketers carefully examine their served market segments and the products that are used to address those segments.

answer

Lateral Marketing Strategy

question

Healthcare marketers must endeavor to determine what market segment opportunities have been overlooked or bypassed over the course of serving current customer populations.

answer

Lateral Marketing Strategy

question

Lateral Marketing Strategy is not a substitute for vertical segmentation, but a complementary technique that increases the potential for the identification of productive market segments.

answer

True

question

Developed by Kotler and Trias in an attempt to identify opportunities to serve customer groups that have previously been overlooked, courtesy of the drill-down orientation of vertical marketing.

answer

lateral segmentation

question

Technique benefits marketers through the identification of valuable segments to pursue; benefits customers whose wants and needs might go unnoticed.

answer

Lateral Marketing Strategy

question

Seeks to identify new markets for given product offerings; termed as a reference to open, clear blue water in the ocean.

answer

Blue Ocean Strategy

question

Red Ocean Strategy seeks to battle competition within known markets, _______ seeks to pursue uncontested markets; avoiding direct competition.

answer

Blue Ocean Strategy

question

Exploits existing demand by engaging in the market share battles within known markets

answer

Red Ocean Strategy

question

Involves the pursuit and capture of new demand by opening up new, previously untapped markets.

answer

Blue Ocean Strategy

question

Accomplished by embedding enhanced customer-desired features into product offerings, while simultaneously reducing or eliminating elements that are not important to customers.

answer

value innovation

question

Essentially provides customer with more for less.

answer

Value innovation

question

Seeks to simultaneously pursue differentiation and low cost; an approach for identifying and pursuing pathways to growth and prosperity

answer

Blue Ocean Strategy

STUDY

Blue Ocean Strategy First Mover Advantage Industry

GRBU 511 Ch 10 E-Trade Quiz – Flashcards 5 terms

Patsy Brent

5 terms

Preview

GRBU 511 Ch 10 E-Trade Quiz – Flashcards

question

Which factors should we reduce well below industry standard?

answer

Kim and Mauborgne propose four crucial questions for marketers to ask themselves in guiding blue-ocean thinking and creating value innovation. Which of the following questions did E-Trade ask when it offered low cost stock trading?

question

Which factors should we create that the industry has never offered?

answer

Which of the following did E-Trade ask when it offered online trading?

question

Competitive and leveragable advantage

answer

Which advantage did E-Trade's Super Bowl commercial give the company?

question

It created point-of-parity

answer

E-Trade's first Super Bowl commercial was effective. It accomplished all of the following except for one. Which of the following is the exception that benefits associations that are not necessarily unique to the brand but might be shared with other brands?

question

It offered online and inexpensive trading.

answer

How did E-Trade differentiate itself from other stock traders?

STUDY

Blue Ocean Strategy Business Management International Marketing

497 Test 2 – Flashcards 65 terms

Blake Terry

65 terms

Preview

497 Test 2 – Flashcards

question

-Expanding a company's geographic coverage, creating a more cost-efficient operation out of the combined companies, and/or extending the company's business into new product categories.

answer

1) Mergers and Acquisitions typically aim at achieving such objectives as:

question

-Involves abandoning efforts to beat out competitors in existing markets and, instead, inventing a new industry or distinctive market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand.

answer

2) A blue ocean type of offensive strategy:

question

-Becoming dependent on other companies for essential expertise and capabilities.

answer

3) The Achilles heel (or biggest disadvantage/danger/pitfall) of relying heavily on strategic alliances and partnerships is:

question

-Is a formal agreement between two or more companies in which there is strategically relevant collaboration of some sort, joint contribution of resources, shared risk, shared control and mutual dependence.

answer

4) A Strategic Alliance

question

-Cooperative arrangements with other companies are very helpful in racing against rivals for global market leadership and/or racing to stakeout a strong position in an industry of the future.

answer

5) Many companies find strategic alliances particularly valuable when:

question

-When there are no barriers to adopting a blue ocean strategy in the near future

answer

6) Which of the following conditions do NOT constitute a late-mover advantage (or first-mover disadvantage)?

question

-Deliberately attacking those market segments where a key rival makes big profits

answer

7) Which one of the following is NOT a defensive option for protecting a company's market share and competitive position?

question

-Whether to improve the quality of the company's product

answer

8) Which one of the following is NOT a strategic decision that needs to be made in choosing how best to complement a company's choice of one of the 5 basic competitive strategy options and thereby maximize the power of its overall strategy?

question

-Gain better access to end users and build stronger brand awareness.

answer

9) The Strategic impetus for forward vertical integration is to

question

-To carefully weigh the first-mover advantages against the first-mover disadvantages and act accordingly.

answer

10) Because when to make a strategic move can be just as important as what move to make, a company's best option with respect to timing is

question

-Creating as much channel conflict as possible so as to quickly learn whether all customer-related transactions should be conducted at the company's Web site or whether the company needs to continue selling through traditional wholesalers, distributers and retailers.

answer

11) Which of the following is NOT one of the strategic options that companies have for using their Web sites?

question

-Reducing its risk exposure to changing technology or shifting buyer preferences and enabling a company to concentrate on its core business, leverage its key resources, and do even better what it already does best.

answer

12) Outsourcing strategies can offer such advantages as

question

-Strengthen the company's competitive position and/or boost its profitability

answer

13) The 2 best reasons for investing company resources in vertical integration (either forward or backward) are to:

question

-A company that refines crude oil into gasoline purchasing a firm engaged in drilling and exploring for oil.

answer

14) A good example of vertical integration is:

question

-Pursuing continuous product innovation to draw sales and market share away from less innovative rivals

answer

15) which of the following is an examle of an offensive strategy?

question

-Can be an excellent initial strategy to test the international waters and limit the amount of capital required to enter the international arena and begin selling in the markets of foreign countries.

answer

1) Using Domestic Plants as a production base for exporting goods to selected foreign country markets

question

- A multiple cross-country strategy involving strategic alliances, joint ventures, and other cooperative agreements with foreign companies

answer

2) Which of the following is NOT one of the primary strategy options for competing in the markets of foreign countries

question

-Whether to vary the company's competitive approach to fit specific market conditions and buyer preferences in each host country or whether to employ essentially the same strategy in all countries.

answer

3) When a company operates in the markets of two or more different countries, its foremost strategic issue is:

question

-Greater ability to employ a global strategy (as opposed to a multicounty strategy).

answer

4) Which of the following is not a potential benefit of collaborative strategies involving alliances and/or joint ventures with foreign partners?

question

-Companies operating in a global marketplace must wrestle with whether and how much to customize their offerings in each different country market to match the tastes and preferences of local buyers or whether to pursue a strategy of offering a mostly standardized product worldwide.

answer

5) Because buyer tastes for a particular product or service sometimes differ substantially from country to country,

question

-Which foreign country markets will prove to be the best and most well protected profit sanctuary.

answer

6) Which of the following is NOT among the important strategic issues associated with competing across national boundaries?

question

-To build the profit sanctuaries necessary to wage guerilla offensives against global challengers endeavoring to invade its home market.

answer

7) Which one of the following is not a reason why a company decides to enter foreign markets?

question

-A global strategy involves striving to be the global low-cost provider by economically producing and marketing a mostly standardized product worldwide whereas multicounty strategy entails pursuing broad different ion and striving to strongly differentiate its products in one country from the products it sells in other countries.

answer

8) According to figure 7.2, which of the following does NOT accurately characterize the differences between a localized multicounty strategy and a global strategy?

question

-Attacking the profit sanctuaries of rival companies

answer

9) Which of the following qualifies as an offensive strategy for companies competing internationally or globally?

question

-Derives substantial profits because of its strong or protected market position

answer

10) A profit sanctuary refers to a country market (or geographic region) where a company,

question

-Pursues a competitive strategy that is essentially the same in all country markets where it operates but it may nonetheless give local managers room to make minor variations where necessary to better satisfy local buyers and to better match local market conditions

answer

11) A firm pursuing a "think global, act local" approach to strategy making,

question

-Becomes more cost competitive in selling its exported goods in foreign markets when the U.S. dollar declines in value against the currencies of the countries to which it is exporting.

answer

12) A U.S. manufacturer that exports goods made at its US plants for shipment to foreign markets.

question

-Efficiently and effectively transferring competitively valuable competencies and capabilities from one country to another

answer

13) A firm can endeavor to gain competitive advantage or counteract disadvantages in foreign country markets by

question

-A market situation where competitive conditions across national markets are linked strongly enough to form a true international or world market and where leading competitors compete head to head in many different countries

answer

14) The defining characteristic of global competition is

question

- The risks of adverse shifts in currency exchange rates and the presence of important cross-country differences in buyer tastes, market sizes, and growth potential.

answer

15) Competing in one or more countries or regions of the world makes strategy-making because of

question

-Actions over the past few years to substitute global strategies for multi-country strategies in one or more business units

answer

1) Based on the information presented in figure 8.1, which of the following would NOT be something to look for in identifying a diversified company's strategy?

question

-For cross-business use of potent brand name and/or cross-business collaboration to build new or stronger competitive capabilities.

answer

2) Strategic fit between two or more businesses exists whenever one or more activities comprising the value chains of different businesses are sufficiently similar to present opportunities

question

-Demanding managerial requirements and no potential for competitive advantage beyond what each individual business can generate on its own.

answer

3) The two biggest drawbacks of pursuing unrelated diversification strategies are

question

-Deciding which of the 5 basic competitive strategies that each of the company's different businesses should employ

answer

4) The top-level executive task of crafting a diversified company's overall or corporate strategy does not include which one of the following?

question

-Being able to eliminate or reduce costs by combining related value-chain activities of different businesses into a single operation

answer

5) Which of the following best illustrates economy of scope?

question

-Determining whether some business units have value chain match-ups that offer opportunities to transfer skills or technology or intellectual capital from one business to another.

answer

6) Which of the following is NOT part of the task of checking a diversified company's business line-up for adequate financial and nonfinancial resource fit?

question

-A digital camera manufacturer acquiring a maker of athletic footwear.

answer

7) Which of the following is the best example of unrelated diversification?

question

-Any company that can be acquired on good financial terms and that has satisfactory growth and earnings potential represents a good acquisition and a good business opportunity.

answer

8) The basic premise of unrelated diversification is that

question

-Diversifying into closely related businesses opens new avenues for reducing costs

answer

9) Diversification ought to be considered when

question

-Divesting cash hog businesses and using the proceeds to fund capital investments in promising cash cow businesses.

answer

10) According to figure 8.6, which one of the following is not a reasonable option for deploying a diversified company's financial resources?

question

-When the company lacks a strong global brand name and lacks the managerial know-how and technological expertise needed to achieve economies of scope.

answer

11) Which one of the following is not among the conditions that make restructuring a diversified company's business lineup an appealing strategic option?

question

-The attractiveness test, the cost-of-entry test, and the better-off test.

answer

12) The three tests for judging whether a particular diversification move can create added long-term value shareholders are

question

-Generates positive cash flows over and above its internal requirements, thus providing a corporate parent with funds that can be used for financing new acquisitions, investing in cash hog businesses and/or paying dividends.

answer

13) A "cash cow" type of business

question

-Is what fuels 1+1=3 gains in shareholder value—the necessary outcome for satisfying the better-off test and proving the business merit of a company's diversification effort.

answer

14) Diversifying into related businesses where competitively valuable strategic fit benefits can be captured and turned into a competitive advantage over undiversified competitors and competitors whose own diversification efforts don't offer equivalent strategic-fit benefits.

question

-Checking for conflicts/incompatibility among the competitive strategies of the company's different businesses

answer

15) Which of the following is NOT part of the procedure for evaluating the pluses and minuses of a diversified company's strategy and deciding what actions to take to improve the company's performance?

question

-Ranking the company's business units from competitively strongest to competitively weakest and thereby learns which business units are strong, average, or weak market contenders in their respective industries.

answer

16) The basic purpose of calculating competitive strength scores for each of a diversified company's business units is to use the competitive strength scores as a means of

question

-Provides valuable guidance in deploying corporate resources to the various business units—in general, a diversifying company's prospects for good overall performance are enhanced by concentrating corporate resources and strategic attention on those business units positions in the three cells in the upper left portion of the attractiveness-strength matrix.

answer

17) Using quantitative measures of industry attractiveness and competitive strength to plot each business's location on the 9-cell industry attractiveness-competitive strength matrix

question

-A manufacturer of dining room furniture acquiring a maker of patio furniture.

answer

18) Which of the following is the best example of related diversification?

question

-Be shrewd in identifying opportunities to achieve greater economies of scope.

answer

19) Which of the following is not something that corporate executives must do to succeed in using a strategy of unrelated diversification to produce companywide financial results above and beyond what the businesses could generate operating as stand-alone entities?

question

-Selecting a set of industry attractiveness measures, weighting the importance of each measure, rating each industry on each attractiveness measure, multiplying the industry ratings by the assigned weight to obtain a weighted rating, adding the weighted ratings for each industry to obtain an overall industry attractiveness score, and using the overall industry attractiveness scores to evaluate the attractiveness of all the industries, both individually and as a group.

answer

20) Calculating quantitative attractiveness ratings for the industries a company has diversified into involves

question

-The application of general ethical principles and standards to the actions and decisions of businesses and the conduct of their personnel.

answer

1) Business ethics concerns

question

-That forbid the payments of bribes and kickbacks in their codes of ethical conduct that are serious about enforcing this prohibition are acting in accordance with the ethical universalism school of thought.

answer

2) Multinational companies

question

-A company's duty to operate in an honorable manner, provide good working conditions for employees, be a good steward of the environment and actively work to better the quality of life in the local communities where it operates and in society at large.

answer

3) The concept of social responsibility and good corporate citizenship concerns

question

-Overzealous pursuit of wealth and other selfish interested, heavy pressures on company managers to meet or beat performance targets, and company culture that puts profitability and good business performance over ethical behavior.

answer

4) Which of the following are major drivers of unethical managerial behavior?

question

-It is very clear that the payment of bribes and kickbacks is ethically impermissible even in those countries and situations where it is the local custom to engage in such payments.

answer

5) According to the school of ethical universalism,

question

- See themselves as stewards of ethical behavior and believe its important too exercise ethics leadership; they are ethically principled and pursue success in business within the confines of both the letter and spirit of what is ethical and legal.

answer

6) Moral managers

question

-It is very clear that the use of underage labor is ethically impermissible even inn those countries and situations where it is the local custom to utilize child labor.

answer

7) According to the school of ethical universalism,

question

-Moral mangers, amoral managers, and immoral managers

answer

8) The three categories of managers that standout with regard to ethical and moral principles in business affairs are:

question

-A business is obligated to act as a responsible citizen and do its fair share to promote the general welfare' otherwise it is in violation of its implied contract with society and subject to both heavy fines and excess profits tax.

answer

9) Which one of the following is Not among the good business reasons why companies should be public-spirited and devote time and resources to social responsibility initiatives, environmental sustainability, and being good corporate citizens.

question

- Companies that engage in shady behavior usually suffer big drops in profitability and are unlikely to earn attractive profits for as many as 5 to 10 years after their unethical conduct is exposed in the media

answer

10) Which of the following is not a particularly sound or valid reason why deliberate pursuit of unethical strategies and tolerance of unethical conduct is a risky practice?

question

-The collective views of multiple cultures and societies combine to form a "social contract" that all individuals, groups, organizations and businesses in all situations have a duty to observe; however, within the boundaries of this social contract, local cultures or groups have the discretion to go beyond these universal norms and specify other behaviors that are out of bounds and place further limitations on what is considered ethical.

answer

11) According to integrative social contracts theory,

question

-The corruption perception index (CPI) scores in countries as Finland, Denmark, Sweden, the Netherlands, and Switzerland is higher (indicating lower perceived levels of corruption) than in such countries as China, India, Russia, and Brazil.

answer

12) According to the data in Table 9.1,

question

-Because there are meaningful variations in what societies generally agree to be ethically right and wrong in the conduct of business activities, it is appropriate for there to be differing standards of what constitutes ethical business behavior and what constitutes unethical business behavior and, further, for local ethical standards to take precedence over the ethical standards that exist elsewhere.

answer

13) The school of ethical relativism holds that

question

-Actions to keep the prices the company charges for its products/services low enough that the general public, as obscenely high or exorbitant will not view the company's profits

answer

14) Which of the following is not an aspect of socially responsible behavior and good corporate citizenship?

question

-Some concepts of what is right and what is wrong resonate with peoples of most societies regardless of local traditions and cultural norms—hence common ethical standards can be used to judge the conduct of personnel at companies operating in a variety of country markets and cultural circumstances.

answer

15) The school of universalism holds that

STUDY

Backward Vertical Integration Blue Ocean Strategy First Mover Advantages Forward Vertical Integration Mergers And Acquisitions Value Chain Activities

Capstone Chapter 6 – Flashcards 77 terms

Cara Robinson

77 terms

Preview

Capstone Chapter 6 – Flashcards

question

Sometimes it makes sense for a company to go on the offensive to improve its market position and business performance. The best offensives tend to incorporate the following EXCEPT:

answer

focusing relentlessly on building a competitive advantage.

question

Once a company has decided to employ a particular generic competitive strategy, then it must make such additional strategic choices, such as:

answer

All of these.

question

Which one of the following is NOT a strategic choice that a company must make to complement and supplement its choice of one of the five generic competitive strategies?

answer

Whether to employ a market share leadership strategy.

question

Strategic offensives should, as a general rule, be based on:

answer

exploiting a company's strongest competitive assets—its most valuable resources and capabilities.

question

The principal offensive strategy options include all of the following EXCEPT:

answer

initiating a market threat and counterattack simultaneously to effect a distraction.

question

Which of the following is NOT a principal offensive strategy option?

answer

Being the final competitor to market a next-generation product so as to guarantee the product is operationally sound.

question

An offensive to yield good results can be short if:

answer

buyers respond immediately (to a dramatic cost-based price cut or imaginative ad campaign).

question

Which of the following rivals make the best targets for an offensive attack?

answer

Firms with weaknesses in areas where the challenger is strong.

question

When challenging a struggling rival, it can:

answer

All of these.

question

A blue-ocean strategy:

answer

involves abandoning efforts to beat out competitors in existing markets and instead invent a new industry or new market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand.

question

Which of the following is NOT a prime example of a blue-ocean market strategy?

answer

Walmart's logistics and distribution.

question

All firms are subject to offensive challenges from rivals. The intent of the best defensive move is to:

answer

All of these.

question

Which of the following is NOT a purpose of a defensive strategy?

answer

To increase the risk of having to defend an attack.

question

Which of the following ways are employed by defending companies to fend off a competitive attack?

answer

Gain product line exclusivity to force competitors to use other distributors.

question

What is the goal of signaling a challenger that strong retaliation is likely in the event of an attack?

answer

To dissuade challengers from attacking or diverting them into using less threatening options.

question

Which of the following signals would NOT warn challengers that strong retaliation is likely?

answer

Announcing strong quarterly earnings potential to financial analysts.

question

Being first to initiate a particular strategic move can have a high payoff in all of the following EXCEPT when:

answer

market uncertainties make it difficult to ascertain what will eventually succeed.

question

In which of the following instances is being a first-mover NOT particularly advantageous?

answer

When markets are slow to accept the innovative product offering of a first-mover, and fast followers possess sufficient resources and marketing muscle to overtake a first mover.

question

First-mover disadvantages (or late-mover advantages) rarely ever arise when:

answer

the market response is strong and the pioneer gains a monopoly position that enables it to recover its investment.

question

In which of the following cases are late-mover advantages (or first-mover disadvantages) NOT likely to arise?

answer

When opportunities exist for a blue-ocean strategy to invent a new industry or distinctive market segment that creates altogether new demand.

question

Because when to make a strategic move can be just as important as what move to make, a company's best option with respect to timing is:

answer

to carefully weigh the first-mover advantages against the first-mover disadvantages and act accordingly.

question

The race among rivals for industry leadership is more likely to be a marathon rather than a sprint when:

answer

the market depends on the development of complementary products or services that are currently not available, buyers have high switching costs, and influential rivals are in position to derail the efforts of a first-mover.

question

For every emerging opportunity there exists:

answer

a market penetration curve, and this typically has an inflection point where the business model falls into place.

question

Any company that seeks competitive advantage by being a first-mover must ask several hard questions prior to executing its strategy. Which question would it NOT ask?

answer

Did the company pour too many resources into getting ahead of the market opportunity?

question

What does the scope of the firm refer to?

answer

The range of activities the firm performs internally and the breadth of its product offerings, the extent of its geographic market, and its mix of businesses

question

The range of product and service segments that the firm serves within its market is known as the firm's:

answer

horizontal scope.

question

The extent to which a firm's internal activities encompass one, some, many, or all of the activities that make up an industry's entire value chain system is known as:

answer

vertical scope.

question

The difference between a merger and an acquisition is that:

answer

a merger is the combining of two or more companies into a single corporate entity, whereas an acquisition involves one company (the acquirer) purchasing and absorbing the operations of another company (the acquired).

question

The difference between a merger and an acquisition relates to:

answer

the details of ownership, management control, and the financial arrangements.

question

Which of the following is NOT a typical strategic objective or benefit that drives mergers and acquisitions?

answer

To facilitate a company's shift from a broad differentiation strategy to a focused differentiation strategy.

question

Mergers and acquisitions are often driven by such strategic objectives as:

answer

expanding a company's geographic coverage or extending its business into new product categories.

question

Merger and acquisition strategies:

answer

may offer considerable cost-saving opportunities and can also be beneficial in helping a company try to invent a new industry.

question

What outcomes do horizontal merger and acquisition strategies intend?

answer

All of these.

question

Mergers and acquisitions:

answer

frequently do not produce the hoped-for outcomes.

question

A primary reason for why mergers and acquisitions sometimes fail is due to the:

answer

misinterpretation of the cultural differences, like employee disenchantment and low morale, differences in management styles and operating procedures, and operations integration decision mistakes.

question

Vertical integration strategies:

answer

extend a company's competitive scope within the same industry by expanding its operations across multiple segments or stages of the industry value chain.

question

The two best reasons for investing company resources in vertical integration (either forward or backward) are to:

answer

add materially to a company's technological capabilities, strengthen the company's competitive position, and/or boost its profitability.

question

A good example of vertical integration is:

answer

a crude oil refiner purchasing a firm engaged in drilling and exploring for oil.

question

A vertical integration strategy can expand the firm's range of activities:

answer

backward into sources of supply and/or forward toward end users.

question

When firms are involved in a mix of in-house and outsourced activity in any given stage of the vertical chain, it is called:

answer

tapered integration.

question

For backward vertical integration into the business of suppliers to be a viable and profitable strategy, a company:

answer

must be able to achieve the same scale economies as outside suppliers and match or beat suppliers' production efficiency with no drop-off in quality.

question

Vertical integration can lower costs by:

answer

facilitating the coordination of production flows and avoiding bottlenecks.

question

Which of the following is NOT a potential advantage of backward vertical integration?

answer

Reduced business risk because of controlling a bigger portion of the overall industry value chain.

question

Backward vertical integration can produce:

answer

a differentiation-based competitive advantage when activities enhance the performance of the final product.

question

The strategic impetus for forward vertical integration is to:

answer

gain better access to end users and better market visibility.

question

Which of the following is typically the strategic impetus for forward vertical integration?

answer

Gaining better access to end users and better market visibility.

question

Which of the following is NOT a strategic disadvantage of vertical integration?

answer

Vertical integration reduces the opportunity for achieving greater product differentiation.

question

Bypassing regular wholesale/retail channels in favor of direct sales and Internet retailing can have appeal if:

answer

it reinforces the brand, enhances consumer satisfaction, and results in lower prices to end users.

question

A strategy of vertical integration can have substantial drawbacks, including:

answer

the environmental costs of coordinating operations across vertical chain activities.

question

A strategy of vertical integration can have both important strengths and weaknesses and depends on:

answer

All of these.

question

An outsourcing strategy:

answer

involves farming out certain value chain activities presently performed in-house to outside vendors.

question

The two big drivers of outsourcing are:

answer

that outsiders can often perform certain activities better or more cheaply, and outsourcing allows a firm to focus its entire energies on those activities that are at the center of its expertise (its core competencies).

question

Outsourcing the performance of value chain activities presently performed in-house to outside vendors and suppliers makes strategic sense EXCEPT when:

answer

it restricts a company's ability to assemble diverse kinds of expertise speedily and efficiently.

question

Which of the following is NOT one of the benefits of outsourcing value chain activities presently performed in-house?

answer

Enables a company to gain better access to end users and better market visibility.

question

Relying on outsiders to perform certain value chain activities offers such strategic advantages as:

answer

reducing the company's risk exposure to changing technology and/or changing buyer preferences.

question

Outsourcing strategies can offer such advantages as:

answer

obtaining higher quality and/or cheaper components or services, improving a company's ability to innovate, and reducing its risk exposure.

question

The big risk of employing an outsourcing strategy is:

answer

hollowing out a firm's own capabilities and losing touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success.

question

Strategic alliances:

answer

are collaborative formal arrangements where two or more companies join forces and agree to work cooperatively toward some strategically relevant objective.

question

A strategic alliance:

answer

is a formal agreement between two or more companies in which there is strategically relevant collaboration of some sort, the joint contribution of resources, shared risk, shared control, and mutual dependence.

question

Which of the following is NOT a factor that makes an alliance "strategic" as opposed to just a convenient business arrangement?

answer

The alliance helps the company obtain additional financing on better credit terms.

question

The formation of a new corporation, jointly owned by two or more companies agreeing to share in the revenues, expenses, and control, is known as:

answer

a joint venture.

question

Entering into strategic alliances and collaborative partnerships can be competitively valuable because:

answer

cooperative arrangements with other companies are very helpful in racing against rivals to build a strong global presence and/or racing to seize opportunities on the frontiers of advancing technology.

question

An alliance becomes "strategic" as opposed to just a convenient business arrangement when it serves strategic purposes such as when designed to help:

answer

All of these.

question

The best strategic alliances:

answer

are highly selective, focusing on particular value chain activities and on obtaining a particular competitive benefit, thereby enabling the firm to build on its strengths and to learn.

question

Which one of the following is NOT a strategically beneficial reason why a company may enter into strategic partnerships or cooperative arrangements with key suppliers, distributors, or makers of complementary products?

answer

To enable greater opportunities for employee advancement.

question

Companies racing against rivals for global market leadership need strategic alliances and collaborative partnerships with companies in foreign countries to:

answer

get into critical country markets quickly, gain inside knowledge about unfamiliar markets and cultures, and access valuable skills and competencies that are concentrated in particular geographic locations.

question

A company racing to seize opportunities on the frontiers of advancing technology often utilizes strategic alliances and collaborative partnerships to:

answer

help master new technologies and build new expertise and competencies, establish a stronger beachhead for participating in the target industry, and open up broader opportunities in the target industry.

question

Which of the following is NOT one of the factors that affects whether a strategic alliance will be successful and realize its intended benefits?

answer

Minimizing the amount of resources that the partners commit to the alliance.

question

Capturing the benefits of strategic alliances is not easy, but success generally is a function of six factors, except when:

answer

ensuring the division of work is directly apportioned to appropriate skill sets.

question

Which of the following is NOT a typical reason that many alliances prove unstable or break apart?

answer

Disagreement over how to divide the profits gained from joint collaboration.

question

Experience indicates that strategic alliances:

answer

can suffer culture clash and integration problems due to different management styles and business practices.

question

The Achilles heel (or biggest disadvantage/pitfall) of relying heavily on alliances and cooperative strategies is:

answer

becoming dependent on other companies for essential expertise and capabilities.

question

The principal advantages of strategic alliances over vertical integration or horizontal mergers/acquisitions is defined best by:

answer

resource pooling and risk sharing, more adaptive response capabilities, and the speed of deployment wherewithal.

question

A company that has greater success in managing their strategic alliance can credit all of the following, EXCEPT:

answer

creating organizational learning barriers across boundaries.

question

A company that fails in managing their strategic alliance probably has not:

answer

All of these.

question

Alliance management is considered an organizational capability and:

answer

develops over time, out of effort and learning.

question

The range of product and service segments that the firm serves within its market is known as the firm's:

answer

STUDY

Blue Ocean Strategy Business Management Cost Leadership Strategy Market Penetration Strategy Strategic Management

Exam 2 595 – Flashcards 40 terms

Julie Noel

40 terms

Preview

Exam 2 595 – Flashcards

question

In a focused cost-leadership strategy, a firm:

answer

delivers low-cost products and services to a specific, narrow part of the market.

question

A company that uses a differentiation strategy can achieve a competitive advantage as long as its:

answer

economic value created is greater than that of its competitors

question

Which of the following is more of a value driver than a cost driver?

answer

Superior customer service

question

answer

Minimum efficient scale

question

Which of the following statements accurately brings out the difference between economies of scale and learning effects?

answer

While there are no diseconomies to learning, there are diseconomies to scale.

question

A cost-leader is protected from the threat of new entrants primarily due to its:

answer

economies of scale.

question

A differentiator is least likely to be threatened by increases in input prices due to powerful suppliers when the:

answer

differentiator is able to create a significant difference between perceived value and current market prices.

question

In a successful _____, the trade-offs between differentiation and low cost are reconciled.

answer

integration strategy

question

_____ is best described as the process of manufacturing a large variety of tailor-made products or services at a relatively low unit cost.

answer

Mass customization

question

The productivity frontier function is concave, and it captures the:

answer

trade-off between value creation and production cost

question

In which of the following stages of the industry life cycle is a standard first established?

answer

Growth stage

question

Which of the following statements is true of a disruptive innovation?

answer

It invades the market from the bottom up, by first capturing the low end.

question

Large companies have been shifting their knowledge landscape from closed innovation to open innovation because of the:

answer

increasing supply and mobility of skilled workers.

question

In a radical innovation, a firm targets:

answer

new markets by using new technologies.

question

The typical four-step innovation process begins with:

answer

the presentation of an idea as findings derived from basic research.

question

Why is the phase after the growth stage of the industry life cycle referred to as the shakeout stage?

answer

The weaker firms are forced out of the industry in this stage.

question

In the context of the long tail phenomenon, what does the short head represent?

answer

Products that appeal to the largest segment of the market with homogenous tastes

question

_____ is best described as the commercialization of any new product, process, or the modification and recombination of existing ones.

answer

Innovatoin

question

What is the basic tenet of the crossing-the-chasm framework?

answer

Each stage of the industry life cycle is dominated by a different customer group.

question

Generally, as the level of _________ innovation declines, the level of _________ innovation increases.

answer

product; process

question

Which of the following is an example of an internal transaction cost?

answer

The cost of maintaining a production unit

question

A primary advantage of organizing economic activity within firms is the:

answer

ability to coordinate highly complex tasks to allow for specialized division of labor

question

_____ is best described as a situation in which one party is more informed than another, because of the possession of private information.

answer

Information asymmetry

question

_____ are best described as voluntary arrangements between firms that involve the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services to lead to competitive advantage.

answer

Strategic alliances

question

Each stage of the vertical value chain typically represents a distinct _____ in which a number of different firms are competing.

answer

Industry

question

_____ are best described as unique assets with high opportunity costs that have significantly more value in their intended use than in their next-best use.

answer

specialized assets

question

A firm follows a(n) _____ when less than 70 percent of its revenues come from a single business and there are few, if any, linkages among its businesses.

answer

unrelated diversification strategy

question

Companies that pursue related diversification are able to create a diversification premium because they:

answer

are able to increase value due to economies of scope.

question

In the Boston Consulting Group (BCG) growth-share matrix, strategic business units categorized under dogs:

answer

hold a small market share in a low-growth market.

question

An organization that is organized according to strategic business units (SBUs) and also along organizational structures is most likely using a _____ structure.

answer

Matrix

question

A drawback involved in using cross-border strategic alliances to enter new foreign markets is that:

answer

some of the firm's proprietary know-how may be appropriated by the foreign partner

question

When a standalone organization is created and owned by two or more parent companies together, the strategic alliance is referred to as a(n) _____.

answer

Joint Venture

question

When does a merger between companies typically occur?

answer

When two firms of comparable size join to form a combined entity

question

Which of the following is an advantage of equity alliances when compared to non-equity alliances?

answer

They produce stronger ties between partners.

question

The process of alliance management begins with _____.

answer

selecting the best possible partner

question

When a firm does not have the resource required for pursuing a growth strategy, and if the resource in question is not easily tradable, the implication for the strategist is most likely to:

answer

consider an outright acquisition.

question

reasons why firms enter alliances?

answer

To strengthen competitive position To learn new capabilities To enter new markets, either in terms of geography or products and services

question

Supply, distribution, and licensing contractual agreements between firms, which result in vertical strategic alliances, are all examples of _____.

answer

non-equity alliances

question

a result of horizontal integration

answer

There is a reduction of excess capacity in the market.

question

A _____ is best described as a voluntary arrangement between firms that involves the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services.

answer

strategic alliance

STUDY

Blue Ocean Strategy Critical Success Factors Customer Value Proposition

IS 290: chp 9-12 – Flashcards 108 terms

Roman Peck

108 terms

Preview

IS 290: chp 9-12 – Flashcards

question

structural decisions

answer

operations strategy decisions that relate to location, physical capacity, process technology and vertical integration

question

semistructured decisions

answer

occur in situations in which a few established processes help to evaluate potential solutions, but not enough to lead to a definite recommended decision

question

unstructured decisions

answer

Occurs in situations in which no procedures or rules exist to guide decision makers toward the correct choice

question

transactional information

answer

Encompasses all of the information contained within a single business process or unit of work, and its primary purpose is to support the performing of daily operational tasks

question

OLTP

answer

OnLine Transaction Processing: the capture of transaction and event information using technology to process, store, and update information

question

TPS

answer

transaction processing system: the basic business system that serves the operational level and assists in making structured decisions.

question

source documents

answer

the original transaction record

question

analytical information

answer

encompasses all organizational information, and it's primary purpose is to support the performance of managerial analysis or semi structured decisions.

question

OLAP

answer

OnLine analytical processing: the manipulation of information to create business intelligence in support of strategic decision making

question

DSS

answer

(Decision Support System) Information system that helps users analyze data and make decisions.

question

What-if analysis

answer

checks impact of a change in a variable or assumption on the model

question

Sensitivity analysis

answer

the study of the impact on other variables when one variable is changed

question

Goal-seeking analysis

answer

the setting of an outcome and assessing what variable needs to change to achieve that outcome.

question

optimization analysis

answer

an extension of goal seeking analysis, finds the optimum value for a target variable be repeatedly changing other variables

question

EIS

answer

executive information system: specialized DSS that supports senior level executives and unstructured, long-term, nonroutine decisions requiring judgement, evaluation, and insight

question

visualization

answer

produces graphical displays of patterns and complex relationships in large amounts of data

question

digital dashboard

answer

common tool that supports visualization, tracks KPIs and CSFs compiling information from multiple sources and tailoring it to meet user needs.

question

consolidation

answer

the aggregation of data from simple roll-ups to complex groupings of interrelated information

question

drill-down

answer

enables users to view details, and details of details, of information

question

slice-and-dice

answer

the ability to look at information from different perspectives.

question

artificial intelligence

answer

simulates human thinking and behavior, such as the ability to reason and learn

question

Intelligent systems

answer

various commercial applications of artificial intelligence

question

expert systems

answer

computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems

question

neural network

answer

category of AI that attempts to emulate the way the human brain works.

question

fuzzy logic

answer

mathmatical method of handling imprecise or subjective information. ex.washing machines use this in determining how much water to use by measuring how clean the water is after cycles of washing.

question

genetic algorithm

answer

mimics the evolutionary survival-of-the-fittest process to generate increasingly better solutions

question

intelligent agent

answer

is a special-purpose knowledge-based information system that accomplishes specific tasks on behalf of its users

question

shopping bot

answer

software that will search several retailer websites and provide a comparison of each retailers' offerings

question

bullwhip effect

answer

occurs when distorted product information passes from one entity to the next in the supply chain

question

demand planning software

answer

generates demand forecasts using statistical tools and forecasting techniques

question

Supply Chain Planning (SCP) software

answer

uses mathematical algorithms to improve the flow and efficiency of the supply chain while reducing inventiory

question

Supply Chain Execution (SCE) software

answer

automates the different steps and stages of the supply chain

question

CRM reporting tech

answer

helps identify customers across other applications

question

CRM analysis tech

answer

helps segment customers into categories such as best and worst customers

question

Operational CRM

answer

supports traditional transactional processing for day-to-day, front office operations that deal directly with customers

question

Analytical CRM

answer

supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers

question

Enterprise Application Integration (EAI) middleware

answer

new approach to middleware, by packaging together commonly used functionality, which reduces the time necessary to develop solutions that integrate applications from multiple vendors

question

Name the three types of quantitative DSS models?

answer

What-if analysis, sensitivity analysis, Goal-seeking analysis

question

Name the organizational levels of IT systems going from the top down

answer

EIS,DSS,TPS

question

What is a special-purpose, knowledge-based information system that accomplishes specific tasks on behalf of its users?

answer

Intelligent agent

question

What automates the different steps and stages of the supply chain?

answer

Supply Chain Execution software

question

What are the 5 keys to SCM success?

answer

Make the sale to suppliers, Wean employees of traditional business practices, Ensure the SCM system supports the organizational goals, Deploy in incremental phases and measure and communicate success, and Be future oriented

question

What does the average company spend on production needs?

answer

almost 50 cents of every dollar earned

question

What is the ability to view all areas up and down the supply chain?

answer

Supply chain visibility

question

What is it called if a toy store holds extra inventory for the Christmas season?

answer

Safety inventory

question

What helps organizations reduce their investment in inventory, while improving customer satisfaction through product availability?

answer

collaborative demand planning

question

Which of the following would an organization choose if it wanted to focus on information efficiency?

answer

Freely share lots of information

question

What are the three primary components an organization should consider when determining its facilities strategy?

answer

Location, capacity, operational design

question

"Who are our customers" is not one of the CRM reporting questions (T/F)

answer

True

question

What is the term that identifies how frequently a customer purchases items?

answer

frequency

question

What are the CRM business drivers?

answer

Inventory control, increase revenues, Automation, productivity, efficiency

question

What occurs when a website can know enough about a person's likes and dislikes that it can fashion offers that are more likely to appeal to that person?

answer

personalization

question

Where do customer service representatives answer customer inquiries and respond to problems through a number of different customer touch points?

answer

Contact center

question

Whichoperational CRM technologies does the marketing department typically use?

answer

List generator, campaign management, cross-selling and up-selling

question

What helps an organization identify its customers across applications?

answer

CRM reporting technologies

question

Which of the below represents a CRM analyzing technology questions?

answer

Why did sales not meet forecasts

question

All employees are likely to use CRM, SCM, and ERP (T/F)

answer

true

question

What are several different types of software that sit in the middle of and provide connectivity between two or more software applications?

answer

Middleware

question

Which application's primary business benefits include forecasting, planning, purchasing, material management, warehousing, inventory, and distribution?

answer

ERP

question

What are the primary business benefits of an ERP system?

answer

Forecasting, planning, purchasing, material management, warehousing, inventory, and distribution.

question

Which component can help an organization determine such things as the identification of individuals who are likely to leave the company unless additional compensation or benefits are provided?

answer

Human resource components

question

According to Meta Group, what is the average time it takes for the average company to see results from an ERP solution?

answer

8 to 18 months

question

Which of the following is not one of the three biggest vendors in the ERP market?

answer

Microsoft

question

What is the single most important force reshaping the architecture and functionality of ERP systems?

answer

internet

question

What are forecasts

answer

Prediction made on the basis of time-series information

question

What reveals the degree to which variables are related and the nature and frequency of these relationships in the information?

answer

Association detection

question

What types of BI decisions include predicting sales, determining correct inventory levels and distribution schedules among outlets, and loss prevention?

answer

Retail and sales BI decisions

question

Which company uses statistical analysis to automatically detect potential issues, provide quick and easy access to reports, and perform multidimensional analysis on all warranty information?

answer

Whirlpool

question

How does the DARPA Grand Challenge influence AI

answer

Created the initiative and the need for AI sutonomous combat forces and offered prizes for those who competed in the creation of these machines

question

What are RFIDs and how do they affect SCM

answer

Radio frequency Identification tag, tracking people who have bought certain products that have RFIDs leading to info on location of customers and population density

question

How did infoUSA help small businesses?

answer

infoUSA is a database of lists of companies that are in certain businesses (ex. RV manufacturers all in one list). Helped get the name out of small businesses and gave them access to other businesses helping them reach customers

question

How did ERP save Shell Canada time and money

answer

ERP placed a web based system from contractors that repaired service stations to fill out the invoices themselves who could give detailed information instead of the employees handing off information to higher up employees who had to manually enter it in.

question

Pull tech

answer

technology that recieves information

question

Push tech

answer

technology that sends information

question

Supplier Relationship Management

answer

SRM: focuses on keeping suppliers satisfied by evaluating and categorizing suppliers for different projects

question

3 phases of CRM evolution

answer

Reporting, Analyzing, Predicting

question

cross docking

answer

Distribution method where merchandise is unloaded from the shippers truck and within a few hours reloaded onto trucks going to stores

question

"An army can only move as fast as its fastest supply wagon"

answer

Napoleon

question

BudNet

answer

Budweiser knows every time a six-pack leaves a store shelf. Knows what beer lovers are buying

question

Billy Beane

answer

Baseball player, Money Ball, used statistics to obtain under valued players

question

Mike James

answer

no idea

question

Michael Lewis

answer

Wrote "Money Ball"

question

Michael Dell

answer

no idea

question

Mike Trout

answer

no idea

question

Earl Weaver

answer

no idea

question

What are the steps in the supply chain in the video (order not needed)

answer

Marketing, product design, supplies, manufacturing, logistics, customer, reverse logistics

question

Why is SCM important now

answer

ultimate competitive advantage

question

What is the logical starting point in the Supply chain

answer

Marketing

question

What do all manufactures rely on

answer

raw materials

question

What company is a specialist at making computers that go inside other things?

answer

Motorola

question

Motorola is a customer and a _____ in the supply chain

answer

supplier

question

C.H. Robinson deals with what part of the supply chain

answer

logistics

question

retailers like the Limited use _______-_______ logistics providers.

answer

third party

question

adding price tickets and hangers to clothing is an example of what?

answer

value added

question

____________systems is an example of another 3PL provider

answer

Power freight

question

______ logistics uses TalkMan Technology

answer

Barris

question

_______ Logistics are responsible for goods services and information that flow back up the supplychain

answer

Reverse

question

Cycle inventory

answer

the average amount of inventory held to satisfy customer's demand

question

Tennessee Task force one is located where?

answer

Memphis

question

What is the famous appetizer served at Ben Pao?

answer

Shrimp Wontons

question

IBR

answer

no idea

question

Back hauling

answer

SCM tool where trucks pick up from other suppliers after making a drop off.

question

Balanced scorecard

answer

Series of infor sheets to display the the relative perspective or customer, financial, Internation Business processes, and "leanring and gwoth"

question

4 most common categories of AI

answer

Expert system, Neural network, Genetic algorithm, intelligent agent

question

#1 SRM system past and present

answer

no idea

question

Which system depends on cluster analysis? for information and identify behavioral traits

answer

CRM

question

Market Basket analysis

answer

analyzes checkout information to detect buying behavior and predict future behavior

question

Time-series information

answer

time-stamped information collected at a particular frequency

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