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Exam 5: Business-Level Strategy: Creating and Sustaining Competitive Advantages

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Question 41

Multiple Choice

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Underestimating expenses associated with coordinating value-creating activities in the extended value chain can be a result of ______ integration of cost leadership and differentiation.

A) good
B) poor
C) intentional
D) structured

E) None of the above
F) B) and D)

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Question 42

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The supermarket, Aldi, places extreme focus on minimizing costs across its operations which ultimately makes it more vulnerable to substitutes.

A) True
B) False

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Question 43

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An important advantage of first movers in a market is that they may establish brand recognition that may later serve as an important switching cost.

Competitive advantage can be found in just-in-time manufacturing processes.

The overall value proposition of Walmart makes potential substitute products such as Internet competitors a more viable threat.

Firms may fail to accurately assess sources of revenue and profits in their value chain. This might be a result of an unbiased manager.

A successful differentiation strategy lowers entry barriers because of customer loyalty and the ability of the firm to provide uniqueness in its products and services.

When a company finds that its performance is in decline at any stage in the life cycle, it can look toward a turnaround strategy that is designed to help it to grow but not necessarily to be profitable.

Competitive advantage is not affected by actions by rivals from within and outside of the industry.

The factors that lead to a low-cost position also provide a substantial ____ barriers position with respect to _______ products introduced by new and existing competitors.

Businesses that compete in markets that are in decline should simply be harvested or divested since they are no longer profitable.

Atlas Door created competitive advantage by reducing the time to receive and process an order and through installing a just-in-time logistics operation. Which of the following is not a reason for their favorable position relative to the five forces of industry competition?

Company competitive advantages can be eroded by all of the following except

Swatch defined its watches as playful fashion accessories which were showily promoted. This is an example of reverse positioning.

Many companies have a tight integration among their value-creating activities and have implemented just-in-time manufacturing. The textbook example of Atlas Door suggests that this is a competitive advantage, but it is easily imitated and therefore may not be sustainable in the long run.

As markets mature, competition on the basis of differentiation is preferable to price competition.

To generate above average returns, a firm following an overall cost leadership position should not be concerned with attaining parity or proximity on the basis of differentiation relative to its peers.

In the __________ stage of the industry life cycle, the emphasis on product design is very high, the intensity of competition is low, and the market growth rate is low.

The increasing use of technology in low tech industries has made competitive advantages more sustainable.

A low-cost position provides _______ flexibility to cope with demands from powerful suppliers for input cost increases.