STM quiz 3 fall24

Which of the following is a key benefit of a broad low-cost strategy?

• It works best in markets with high brand loyalty.

• It enables low-cost leadership by being the industry's lowest-cost producer.

• It focuses on unique product features to stand out.

• It reduces the importance of market share.

What is a potential risk of underpricing competitors to attract price-sensitive buyers?

• Customers may perceive the product as premium.

• It can trigger a price war, reducing profits for all companies.

• It guarantees high market share but lower profits.

• It limits the use of cost-saving strategies.

How can a firm perform value chain activities more cost-effectively than its rivals?

• Focus on branding and marketing.

• Use technology to automate processes and improve efficiency.

• Increase product variety to meet diverse customer needs.

• Avoid partnering with suppliers to reduce reliance.

Which of the following describes a way to revamp the value chain to reduce costs?

• Adding additional middlemen to simplify distribution.

• Removing unnecessary steps and activities in operations.

• Focusing solely on product differentiation strategies.

• Encouraging competitors to adopt similar cost-saving measures.

When does a low-cost strategy work best?

• When customers value premium features and customization.

• When products are identical and widely available.

• When switching costs for customers are high.

• When companies compete on innovation rather than price.

What is an example of a pitfall to avoid in a low-cost strategy?

• Partnering with suppliers to improve efficiency.

• Reducing costs by outsourcing non-essential activities.

• Focusing on cost reduction at the expense of product quality.

• Automating repetitive tasks to save labor costs.

Which option reflects a risk of relying too much on cost-reduction techniques?

• Competitors may fail to keep up.

• New technologies may render current methods less competitive.

• Cost reduction guarantees superior profit margins.

• Buyers may demand higher-quality products.

What does a company achieve by maintaining current prices while lowering costs?

• A reduction in market share.

• A higher profit margin.

• Increased price competition.

• A focus on unique product features.

How does selling directly to customers help reduce costs in a broad low-cost strategy?

• It increases reliance on middlemen and distributors.

• It simplifies customer decision-making processes.

• It eliminates the cost of intermediaries like distributors and dealers.

• It focuses on product differentiation strategies.

Which of the following is NOT a recommended avenue for achieving cost advantages?

• Motivating employees to find cost-saving ideas.

• Partnering with suppliers for efficiency.

• Sacrificing quality and essential product features.

• Using technology to streamline production processes.