All of thefollowing are questions that managers should ask before crafting a business level strategy except

When should we introduce our product/service in themarket?

What customer needs, wishes, and desires will we satisfy?

Why do we want to satisfy them?

Who—which customer segments—will we serve?

In order for a firm to formulate an effective business-level strategy, it is important to remember that competitive advantage is determined by

thecharacteristics of both theindustry and thefirm.

thecharacteristics of thefirm alone.

thecharacteristics of theindustry in which a firm competes.

theamount of market share a firm can gain

The fact that both Whole Foods (a high-end grocery store) and Aldi (an inexpensive grocery store) have a competitive advantage in thegrocery store industry is an indication that

following a different generic business strategy within thesame industry can lead to a competitive advantage for more than one organization.

following thesame generic business strategy can allow for two firms competing in thesame industry to have a competitive advantage at thesame time.

in order to evaluate whether Whole Foods has a sustained competitive advantage it is useful to compare it to Aldi from a cost perspective.

in order to evaluate whether Aldi has a sustained competitive advantage, it is useful to compare it to Whole Foods from a differentiation perspective.

Mohawk is a leader in sustainable and innovative carpeting and floorings, as evidenced by its signature product, theworld’s first organic cotton carpet. Its product is unique and has appealing customer attributes. If Mohawk’s raw material costs increased by 12 percent this year, what would be thelikely outcome?

Mohawk would pass a major portion of this increase along as a price increase to its customers

Mohawk would lower profit margins to absorb this cost increase

thecompany would launch an all-out effort to reduce other costs by 12 percent.

Mohawk would seek to find other materials with lower costs, even if it meant losing thecarbon-neutral label on theproduct

When pursuing a cost-leadership strategy, a business must remember that

buyers will be reluctant to pay for a product unless thequality is acceptable.

buyers will be reluctant to pay for a product unless thequality is superior.

buyers will be reluctant to pay for theproduct unless it is customized.

product quality is more important in a broad market than in a narrow one

One of thereasons that big box retailers like Home Depot are able to achieve economies of scale is that

they are able to take advantage of physical properties and maximize their scale efficiencies by stocking more merchandise and handling inventory more efficiently.

they have both broad and narrow economies of scope

they are able to take advantage of market size and spread investment losses over many locations.

they have been able to protect themselves from thethreat of buyer power by increasing input prices.

When a firm is able to successfully employ a blue ocean strategy, it will create a competitive advantage by

beating rivals on product attributes while offering a better price.

combining high quality and product features to provide service that customers truly value.

using a first-mover advantage to be thelowest price in themarket.

winning market share with a highly differentiated product.

One of therisks of pursuing a blue ocean strategy is that a firm can find itself

losing sight of its mission and vision.

competing with only a differentiation strategy

ineffective when competing on an international scale

Bigger & Better Inc. is a big box retailer who is in direct competition with Walmart and Target. Bigger & Better Inc. initially tried to respond to Walmart by cutting its prices and reducing costs. Walmart has greater buying power and a more efficient supply chain, therefore, Bigger & Better Inc. was not able to compete on costs. thecompany then tried to differentiate itself by signing a celebrity to create an in-house line of clothing. However, Target has a celebrity clothing line that has a more differentiated appeal. theeconomic value created by Bigger & Better Inc. is currently less than Target and Walmart. It can be said that

Bigger & Better Inc. is “stuck in themiddle” and has a competitive disadvantage.

Bigger & Better Inc. is successful in creating an integration strategy positioned between Walmart and Target.

Bigger & Better Inc. is still creating an integration strategy positioned between Walmart and Target and is on theright track. It should continue this business strategy.

Bigger & Better Inc. is “stuck in themiddle” and has a competitive advantage.

The goal of a strategic position is to create thelargest gap possible between the________ that a firm creates through its offerings and the________ required to create these offerings.

market share; defensive strategy

Evaluate thefollowing statement: Strategic leaders should always try to pursue a blue ocean strategy because it is themost complex, coveted, and most desirable strategy that exists

I disagree; firms should only pursue this strategy if they are able to reconcile thetradeoff’s of each generic strategy.

I agree; firms should always pursue a blue ocean strategy because thebenefits outweigh thecost.

I agree; firms should pursue a blue ocean strategy because it’s harder for competitors to replicate.

I disagree; firms should never pursue a blue ocean strategy because it’s much too complex.

When examining all thegeneric strategies, which of thefollowing below is inherently superior in every industry?

There is no single superior business-level strategy.

Which of thefollowing is a firm effect that has an impact on thecompetitive advantage of a firm

thevalue and thecost position of thefirm relative to its competitors

theexit barriers within theindustry in which thefirm operates

Thenumber of companies operating in theindustry in which thefirm operates

Theintensity of rivalry among existing companies in thefirm’s chosen industry

A firm’s business strategy can lead to a competitive advantage if it allows thefirm to

perform different activities than its rivals.

execute thesame activities performed by therivals in a similar manner.

position itself below theproductivity frontier.

Which of thefollowing examples uses a focused differentiation strategy?

a cosmetics brand that offers superior skin lotion for sensitive skin priced at 100 dollars per bottle

a tennis pro shop that sells low-quality racquets priced at 150 dollars per racquet

a coffee shop that offers mediocre lattes at a price of five dollars for a small latte

a hotel chain that offers high-quality furnishings and service with room rates of under 75 dollars per night

Jonathan is theowner of a landscaping company that caters to a very wealthy clientele. His company has struggled to differentiate itself from theother high-end landscapers in thearea, but because he has hired several expensive but highly qualified team members, Jonathan is unable to shift to a cost-leadership strategy. Which strategy is most likely to achieve a competitive advantage?

Narrow thescope of competition and focus on unique features such as theuse of organic materials.

Offer similar services as competitors but raise prices to increase profits.

Lower prices but continue employing high-paid expert gardeners.

Maintain prices but replace all theexpert employees with less-skilled workers to control costs

Which of thefollowing best describes a strategic tradeoff?

thetension between value creation and thepressure to keep costs in check

thetension between innovation and keeping manufacturing costs down

thetension between maintaining both high-quality products and service

thetension between raising prices and keeping a loyal clientele

Ticker Inc. is a wristwatch company known for its luxury watches, and it follows a differentiation strategy. In this scenario, Ticker Inc. should ideally compare its strategic position with a

watch maker that sells high-end, premium watches.

watch retailer that sells pre-owned watches.

watch maker that manufactures low-priced watches.

watch maker that follows a differentiation strategy

Tablette Corp. is a consumer electronics company known for its affordable mobile devices that follows a cost-leadership strategy. In this scenario, Tablette Corp. should ideally compare its strategic position with

a consumer electronics company popular among price-conscious customers.

a company that sells small kitchen appliances at affordable prices.

a consumer electronics company that sells high-end devices.

an online company that sells customized electronics accessories.

In a focused cost-leadership strategy, a firm

delivers low-cost products and services to a specific, narrow part of themarket

caters to thesegment of themarket that is least cost sensitive.

provides high-priced products for many different segments of themass market.

focuses on reducing theeconomic value created to drive down costs.

Bath & Chill is a spa that caters to theneeds of a small percentage of highly health conscious consumers. It offers state-of-the-art treatments in a luxurious setting. Since there are very few spas that offer thesame unique services, customers are willing to pay a premium price for its products and services. In this scenario, Bath & Chill is following a

focused differentiation strategy

product diversification strategy.

broad differentiation strategy.

Both Tom’s Car Repair and Fast Engines. incur a cost of $9,000 to manufacture a vehicle. However, theeconomic value created by Fast Engines. is more than that created by Tom’s Car Repair. What does this indicate?

Fast Enginescan charge a premium price on its automobiles.

Tom’s Car Repair has a competitive advantage over Fast Engines.

Both Tom’s Car Repair and Fast Engines. have achieved competitive parity.

Tom’s Car Repair has created a higher value gap than Fast Engines

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

gains market share from other firms.

loses its competitive advantage

lowers theeconomic value created.

results in diseconomies of scale.

How does availability of complements act as a value driver?

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

Complements add value to a product by offering an inferior substitute to it

Complements add value to a product by competing with it.

Complements add value to a product when they imitate it.

Trader Joe’s differentiates itself from competitors by offering top-quality foods obtained through sustainable agriculture. This business strategy implies that Trader Joe’s focuses on

increasing theperceived value created for customers, which allows it to charge a premium price.

decreasing theexisting value gap by providing luxury goods to customers.

maintaining a less steeper learning curve as compared to its competitors.

lowering its costs compared to its competitors, while offering adequate value for its products and services.

chapter 6 quản trị chiến lược

Authored by Vũ Huyền

Other

University

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Applying thefive forces model to business-level strategy allows managers to assess thebenefits and risks of both cost-leadership and differentiation strategies

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Due to thedynamic nature of business competition, a firm’s strategic position should remain fixed over time

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Differentiation and cost-leadership strategies are only effective in manufacturing industries

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The goal of thedifferentiator is to have a smaller value gap than competitors.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The major value drivers that managers have at their disposal include product features, customer service, and complements.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

When a firm operates at theminimum efficient scale, there is still opportunity for it to further reduce its cost per unit through economies of scale

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A firm operating on a 70 percent learning curve will achieve lower per-unit costs after doubling its output than a firm operating on an 80 percent learning curve will

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chapter 6 quản trị chiến lược

Applying thefive forces model to business-level strategy allows managers to assess thebenefits and risks of both cost-leadership and differentiation strategies

Due to thedynamic nature of business competition, a firm’s strategic position should remain fixed over time

Differentiation and cost-leadership strategies are only effective in manufacturing industries

The goal of thedifferentiator is to have a smaller value gap than competitors.

The major value drivers that managers have at their disposal include product features, customer service, and complements.

When a firm operates at theminimum efficient scale, there is still opportunity for it to further reduce its cost per unit through economies of scale

A firm operating on a 70 percent learning curve will achieve lower per-unit costs after doubling its output than a firm operating on an 80 percent learning curve will

A differentiator will always benefit when products have become commoditized.

A cost-leader is thefirm most likely to survive a price war.

When pursuing a blue ocean strategy, a firm in a crowded marketplace attempts to out compete rivals on both cost and product features with thegoal of gaining market share at theexpense of other competitors in thesame industry

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