Competitive Strategies Quiz

Which of the following is not one of the five generic types of competitive strategy?

• Focused low-cost provider strategy

• Broad differentiation strategy

• Overall low-cost provider strategy

• Focused differentiation strategy

• Market share dominator strategy

The generic types of competitive strategies include

• build market share, maintain market share, and slowly surrender market share.

• offensive strategies and defensive strategies.

• low-cost provider, broad differentiation, focused low-cost, focused differentiation, and best-cost provider strategies.

• low-cost/low-price strategies, high-quality/high-price strategies, medium-quality/medium-price strategies, low-cost/high-price strategies.

• price leader strategies, price follower strategies, technology leader strategies, first-mover strategies, offensive strategies, and defensive strategies.

A company’s competitive strategy deals with

• management’s game plan for securing a competitive advantage relative to rivals.

• what its strategy will be in such functional areas as R&D, production, sales and marketing, distribution, finance and accounting, and so on.

• its efforts to change its position on the industry’s strategic group map.

• its plans for entering into strategic alliances, utilizing mergers or acquisitions to strengthen its market position, outsourcing some in-house activities to outside specialists, and integrating forward or backward.

• All of these

A low-cost leader’s basis for competitive advantage is

• lower prices than rival firms.

• using a low-cost/low-price approach to gain the biggest market share.

• high buyer switching costs.

• lower overall costs than competitors.

• higher unit sales than rivals.

A competitive strategy of striving to be the low-cost provider is particularly attractive when

• buyers are not price sensitive.

• the industry is made up of a large number or equal-sized rivals.

• there are many ways to achieve product differentiation that have value to buyers.

• price competition is especially vigorous, buyers have low switching costs, and the majority of industry sales are made to a few, large volume buyers.

• switching costs are high, price competition is strong, and buyers tend to use the industry’s products in many different ways.

Succeed with a low-cost provider strategy, company managers have to

• pursue backward or forward integration to detour suppliers or buyers with considerable bargaining power and leverage.

• move the performance of most all value chain activities to low-wage countries.

• sell direct to users of their product or service and eliminate use of wholesale and retail intermediaries.

• do two things: (1) perform value chain activities more cost-effectively than rivals and (2) be proactive in revamping the firm’s overall value chain to eliminate or bypass 'nonessential' cost-producing activities.

• outsource the majority of value chain activities.

Successful differentiation allows a firm to

• command the largest market share in the industry.

• set the industry ceiling on price.

• avoid being overly concerned about whether entry barriers into the industry are high or low.

• command a premium price for its product and/or increase unit sales and/or gain buyer loyalty to its brand.

• take sales and market share away from rivals by undercutting them on price.

Perceived value and signaling value are often an important part of a successful differentiation strategy when

• the nature of differentiation is hard to quantify.

• buyers are making a first-time purchase.

• repurchase of the product or service is infrequent.

• buyers are unsophisticated and unfamiliar with the capabilities of competing brands.

• All of these

Broad differentiation strategies generally work best in market circumstances where

• buyer needs and preferences are too diverse to be fully satisfied by a standardized product.

• most buyers have similar needs and use the product in the same ways.

• the products of rivals are weakly differentiated and most competitors are resorting to clever advertising to try to set their product offerings apart.

• buyers are price sensitive and buying switching costs are quite low.

• the five competitive forces are strong.

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

• the extra attention paid to top-notch product performance and product quality.

• their concentrated attention on a narrow piece of the overall market.

• greater opportunity for competitive advantage.

• their suitability for market situations where most industry rivals have weakly differentiated products.

• their objective of delivering more value for the money.