Question 1

Success with a best-cost provider strategy designed to outcompete high-end differentiators requires:

Accepted Answer

A)   achieving significantly lower costs in providing the upscale features
B)   providing significantly better product attributes in order to justify a price above what low-cost leaders are charging.
C)   matching the company's resources and capabilities to a low-cost provider status.
D)   motivating buyers to purchase upscale features that match rivals.
E)   All of these.F) B) and D)
G) A) and E)

Question 2

What sets focused (or market niche) strategies apart from low-cost leadership and broad differentiation strategies is:

Accepted Answer

A)   the extra attention paid to top-notch product performance and product quality.
B)   their concentrated attention on serving the needs of buyers in a narrow piece of the overall market.
C)   greater opportunity for competitive advantage.
D)   their suitability for market situations where most industry rivals have weakly differentiated products.
E)   their objective of delivering more value for the money.F) A) and C)
G) B) and E)

Question 3

Which of the following is NOT one of the four basic routes to achieving a differentiation-based competitive advantage?

Accepted Answer

A)   Delivering value to customers via the company's resources,competencies,and value chain activities that rivals don't have or can't afford to match and are well-matched to the requirements of the strategy
B)   Incorporating tangible features that raise product performance and increase customer satisfaction with the product
C)   Incorporating product attributes and user features that lower the buyer's overall costs of using the company's product
D)   Appealing to buyers who are sophisticated and shop hard for the best,stand-out differentiating attributes
E)   Incorporating features that enhance buyer satisfaction in intangible or non-economic waysF) C) and D)
G) B) and C)

Question 4

Easy-to-copy differentiating features:

Accepted Answer

A)   cannot produce sustainable competitive advantage.
B)   seldom are perceived by buyers as having much value.
C)   tend to give buyers a high degree of power in bargaining for a lower price.
D)   should never be incorporated in a company's product offering if its differentiation strategy is to succeed.
E)   lead to vigorous price competition.F) A) and B)
G) C) and D)

Question 5

Brands create customer loyalty,which in turn:

Accepted Answer

A)   increases the perceived cost of switching to another product.
B)   strengthens the product's quality.
C)   validates the motivation for alternate products.
D)   provides monetary incentive for using the product.
E)   All of these.F) A) and E)
G) D) and E)

Question 6

While low-cost providers are champions of frugality,they:

Accepted Answer

A)   seldom hesitate to spend aggressively on resources and capabilities that promise to drive costs out of the business.
B)   are never hesitant to eliminate costs so as to remain the low-cost provider.
C)   are not blinded by cost reduction,preferring product differentiation strategies that reflect cost-reductions rather than buyer needs and wants.
D)   are also champions of profitability by having prices lower than costs to gain volume gains.
E)   always anticipate negative feedback from stakeholders because of their spending habits.F) None of the above
G) A) and D)

Question 7

In what market and competitive circumstances are focused low-cost and focused differentiation strategies attractive?

Accepted Answer

The answer of In what market and competitive circumstances are...

Question 8

Describe the strategy of striving to be the industry's overall low cost provider.What does a company have to do to achieve low-cost provider status?

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The answer of Describe the strategy of striving to be...

Question 9

The essence of a broad differentiation strategy is to:

Accepted Answer

A)   appeal to the high end part of the market and concentrate on providing a top-of-the-line product to consumers.
B)   incorporate a greater number of differentiating features into its product/service than rivals.
C)   lower buyer switching costs.
D)   outspend rivals on advertising and promotion in order to inform and convince buyers of the value of its differentiating attributes.
E)   offer unique product attributes in ways that are valuable and appealing and that buyers consider worth paying for.F) A) and B)
G) A) and C)

Question 10

Describe the two basic cost-reducing approaches a company can take to become a low-cost provider in its industry.

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The answer of Describe the two basic cost-reducing approaches a...

Question 11

What are the pros and cons of a broad differentiation strategy?

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A broad differentiation strategy has sev...

Question 12

Broad differentiation strategies generally work best in market circumstances where:

Accepted Answer

A)   buyer needs and uses of the product are diverse and they are not fully satisfied by a standardized product.
B)   most buyers have similar needs and use the product in the same ways.
C)   the products of rivals are weakly differentiated and most competitors are resorting to clever advertising to try to set their product offerings apart.
D)   buyers are price sensitive and buying switching costs are quite low.
E)   the five competitive forces are strong.F) A) and E)
G) All of the above

Question 13

Cost-efficient management of a company's overall value chain activities requires that management:

Accepted Answer

A)   ferret out cost-saving opportunities in every part of the value chain.
B)   undertake an operations functionality redesign.
C)   establish sales productivity and operating practices guidelines.
D)   re-create rivals' assembly plant structuration savings.
E)   All of these.F) C) and D)
G) D) and E)

Question 14

A company's biggest vulnerability in employing a best-cost provider strategy is:

Accepted Answer

A)   relying too heavily on outsourcing.
B)   getting squeezed between the strategies of firms employing low-cost provider strategies and high-end differentiation strategies.
C)   getting trapped in a price war with low-cost leaders.
D)   being timid in cutting its prices far enough below high-end differentiators to win away many of their customers.
E)   not having a sustainable distinctive competence in cost reduction.F) C) and E)
G) B) and E)

Question 15

Which of the following is NOT one of the ways that a company can achieve cost-efficient management of its value chain activities?

Accepted Answer

A)   Striving to ensure a corporate diversity policy is introduced with effective controls
B)   Using the company's bargaining power vis-à-vis suppliers or others in the value chain
C)   Being alert to the cost advantages of outsourcing or vertical integration
D)   Striving to capture all available economies of scale
E)   Motivating employees through incentives and company cultureF) B) and C)
G) A) and B)

Question 16

The chief difference between a low-cost provider strategy and a focused low-cost strategy is:

Accepted Answer

A)   whether the product is strongly differentiated or weakly differentiated from rivals.
B)   the degree of bargaining power that buyers have.
C)   the size of the buyer group that a company is trying to appeal to.
D)   the type of value chain being used to achieve a low-cost competitive advantage.
E)   the number of upscale attributes incorporated into the product offering.F) A) and E)
G) B) and C)

Question 17

Successful differentiation allows a firm to:

Accepted Answer

A)   be the industry's best-cost provider.
B)   set the industry ceiling on price.
C)   avoid being dragged into a price war with industry rivals and not be overly concerned about whether entry barriers into the industry are high or low.
D)   command a premium price for its product,and/or increase unit sales,and/or gain buyer loyalty to its brand.
E)   take sales and market share away from rivals by undercutting them on price.F) A) and E)
G) D) and E)

Question 18

Pursuing continuous quality improvement as a uniqueness factor is sound because:

Accepted Answer

A)   it can be perceived to add differentiation features for new buyers.
B)   it can acknowledge the firm's strategic intent to compete aggressively.
C)   it can often reduce product defects,improve economy of use,and result in more end-user convenience.
D)   it always provides a competitive advantage.
E)   it is a sound approach to drive profit enhancement.F) A) and B)
G) A) and C)

Question 19

The target market of a best-cost provider is:

Accepted Answer

A)   value-conscious buyers.
B)   brand-conscious buyers.
C)   price-sensitive buyers.
D)   middle-income buyers.
E)   young adults (in the 18-35 age group) .F) A) and B)
G) B) and C)

Question 20

A low-cost provider's product does NOT have to always:

Accepted Answer

A)   contain enough attributes to be attractive to prospective buyers.
B)   suggest that a low price,by itself,is not always that appealing to buyers.
C)   a signal value to buyers.
D)   provide high margins per unit sold to bring in enough unit sales.
E)   be valuable and appealing to a wide range of buyers.F) A) and E)
G) C) and E)

Exam 5: The Five Generic Competitive Strategies: Which One to Employ

Cost-efficient management of a company's overall value chain activities requires that management:

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Brands create customer loyalty,which in turn:

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Describe the two basic cost-reducing approaches a company can take to become a low-cost provider in its industry.

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While low-cost providers are champions of frugality,they:

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A low-cost provider's product does NOT have to always:

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A company's biggest vulnerability in employing a best-cost provider strategy is:

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The essence of a broad differentiation strategy is to:

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Broad differentiation strategies generally work best in market circumstances where:

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In what market and competitive circumstances are focused low-cost and focused differentiation strategies attractive?

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Easy-to-copy differentiating features:

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What sets focused (or market niche) strategies apart from low-cost leadership and broad differentiation strategies is:

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Which of the following is NOT one of the four basic routes to achieving a differentiation-based competitive advantage?

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What are the pros and cons of a broad differentiation strategy?

Correct AnswerAnswered by ExamLex AIA broad differentiation strategy has sev...View AnswerShow Answer

The target market of a best-cost provider is:

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Describe the strategy of striving to be the industry's overall low cost provider.What does a company have to do to achieve low-cost provider status?

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Successful differentiation allows a firm to:

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Pursuing continuous quality improvement as a uniqueness factor is sound because:

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Success with a best-cost provider strategy designed to outcompete high-end differentiators requires:

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Which of the following is NOT one of the ways that a company can achieve cost-efficient management of its value chain activities?

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The chief difference between a low-cost provider strategy and a focused low-cost strategy is:

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A broad differentiation strategy has sev...
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