Question 1

Achieving economies of scale is an important cost driver for certain low-cost leaders.However,there is a saying that "sometimes bigger is worse" because at some point costs increase as output increases.This is referred to as:

Accepted Answer

A)   External economies
B)   Diseconomies of scale
C)   Economic inefficiencies
D)   Integration diseconomiesE) A) and D)
F) C) and D)

Question 2

When a firm has a higher perceived value and cost parity with competitors,why would it NOT offer products at a price premium?

Accepted Answer

The firm would want to gain market share...

Question 3

Under the five forces model,a differentiation strategy works best when:

Accepted Answer

A)   The firm has intangible resources, supplier cost increases can be passed on to the customer, and equivalent substitutes are readily available.
B)   The firm has tangible resources, supplier cost increases can be passed on to the customer, and equivalent substitutes are readily available.
C)   The firm has tangible resources, supplier cost increases can be passed on to the customer, and the differentiation appeal creates customer loyalty.
D)   The firm has intangible resources, supplier cost increases can be passed on to the customer, and the differentiation appeal creates customer loyalty.E) A) and B)
F) C) and D)

Question 4

Successfully implementing an integration strategy is particularly important in globalized industries.

Accepted Answer

A) True 
 B)False

Question 5

GM and Hyundai offer certain car models that directly compete with each other.Hyundai is able to produce their models at a lower cost while providing similar value at the same time.It can be said that:

Accepted Answer

A)   GM and Hyundai have both achieved differentiation parity and competitive advantages.
B)   GM has achieved differentiation parity and a competitive advantage over Hyundai.
C)   Hyundai has achieved differentiation parity and a competitive advantage over GM.
D)   Neither GM nor Hyundai have achieved differentiation parity since they are not in the same strategic group.E) A) and B)
F) B) and C)

Question 6

Achieving differentiation parity can be difficult for a cost leader firm because:

Accepted Answer

A)   Creating value generally means higher costs.
B)   Achieving parity in the market is always hard.
C)   Cost leaders typically add too much value to their products.
D)   Value chain activities should not be altered.E) None of the above
F) A) and B)

Question 7

When management decides whether to pursue a broad market position or a narrow market position,they are defining the:

Accepted Answer

A)   Economies of scale.
B)   Economies of scope.
C)   Scope of competition.
D)   Scope of core capabilities.E) None of the above
F) All of the above

Question 8

When a firm has been able to perform best practices combined with a positive value-cost relationship,it has reached the:

Accepted Answer

A)   Value-cost frontier.
B)   Productivity frontier.
C)   Economies of scope.
D)   Strategic intent.E) A) and D)
F) A) and B)

Question 9

There are several cost drivers that can be managed in order to establish a low-cost leadership advantage.One of the basic cost drivers is:

Accepted Answer

A)   Access to unique features that turn commodities into differentiated products.
B)   Access to lower-cost input factors including raw materials and labor.
C)   Creating personalized customer service in order to minimize price-sensitivity.
D)   Shifting to small-scale production processes in order to create customized products.E) B) and C)
F) A) and D)

Question 10

When costs per unit fall as output increases,_________________ occur.

Accepted Answer

A)   Economies of scope
B)   Diseconomies of scale
C)   Economies of efficiency
D)   Economies of scaleE) C) and D)
F) B) and C)

Question 11

Essentially,a successful integration strategy:

Accepted Answer

A)   Gives customers more perceived value while exceeding their price expectation.
B)   Allows a firm to make strategic trade-offs effectively.
C)   Enables a firm to increase value creation while keeping costs in check.
D)   All of these.E) None of the above
F) A) and B)

Question 12

In the value gap analysis (V-C),which item do cost leaders focus on with their strategies?

Accepted Answer

These businesses focus on reducing the c...

Question 13

Economies of scale generally weaken a firm's ability to move down a given learning curve.

Accepted Answer

A) True 
 B)False

Question 14

When pursuing a cost-leadership strategy,the focus of competition is on cost parity,while offering acceptable value.

Accepted Answer

A) True 
 B)False

Question 15

It can be said that the Tata Group is pursuing a(n) _____________ strategy at the corporate level when it comes to automobiles.

Accepted Answer

A)   Undiversified
B)   Unrelated
C)   Integration
D)   Linked integrativeE) B) and C)
F) A) and D)

Question 16

Apple,Dell,and HP are used as examples in the text for the dynamics of competitive positioning.What does this analysis tell us about these firms?

Accepted Answer

A)   There has been relatively little change in the positions of these firms from 2005 to 2010.
B)   Apple is the only one of the three to remain on the productivity frontier from 2005 to 2010.
C)   HP's position has declined on the frontier from 2005 to 2010.
D)   Dell has improved its position on the frontier from 2005 to 2010.E) A) and D)
F) None of the above

Question 17

Rolex focuses on a small market segment,affluent consumers who want to present a certain image.What is the appropriate name for Rolex's scope of competition?

Accepted Answer

A)   Broad
B)   Market segmented
C)   Narrow
D)   TargetedE) A) and B)
F) None of the above

Question 18

There are two generic strategic positions that require managers to make trade-offs between,in order to achieve success at an integration strategy.They are:

Accepted Answer

A)   Service-oriented and low cost.
B)   Product-oriented and high cost.
C)   High cost and commodity.
D)   Low cost and differentiation.E) None of the above
F) A) and C)

Question 19

A low-cost firm can still gain a competitive advantage even without differentiation parity as long as:

Accepted Answer

A)   Its differentiation appeal is in parity with the competition.
B)   Its costs are higher than the competition.
C)   Its economic value creation exceeds that of the competition.
D)   Its economic value creation is the same as the competition.E) All of the above
F) A) and C)

Question 20

Under the five forces model,a risk to a firm with a differentiation strategy is:

Accepted Answer

A)   When the focus of competition switches to price rather than features and new acceptable levels of quality have emerged due to innovation.
B)   When the focus of competition switches to price rather than features and the substitute products are considered below acceptable levels of quality.
C)   When the focus of competition switches to features rather than price, the substitute products are considered below acceptable levels of quality.
D)   When the focus of competition switches to features rather than price and new acceptable levels of quality have emerged due to innovation.E) B) and C)
F) A) and C)

Exam 6: Business Strategy: Differentiation, Cost Leadership, and Integration

Essentially,a successful integration strategy:

Correct AnswerverifiedShow Answer

There are several cost drivers that can be managed in order to establish a low-cost leadership advantage.One of the basic cost drivers is:

Correct AnswerverifiedShow Answer

Rolex focuses on a small market segment,affluent consumers who want to present a certain image.What is the appropriate name for Rolex's scope of competition?

Correct AnswerverifiedShow Answer

In the value gap analysis (V-C),which item do cost leaders focus on with their strategies?

Correct AnswerverifiedThese businesses focus on reducing the c...View AnswerShow Answer

GM and Hyundai offer certain car models that directly compete with each other.Hyundai is able to produce their models at a lower cost while providing similar value at the same time.It can be said that:

Correct AnswerverifiedShow Answer

When a firm has a higher perceived value and cost parity with competitors,why would it NOT offer products at a price premium?

Correct AnswerverifiedThe firm would want to gain market share...View AnswerShow Answer

Achieving economies of scale is an important cost driver for certain low-cost leaders.However,there is a saying that "sometimes bigger is worse" because at some point costs increase as output increases.This is referred to as:

Correct AnswerverifiedShow Answer

Economies of scale generally weaken a firm's ability to move down a given learning curve.

Correct AnswerverifiedShow Answer

Achieving differentiation parity can be difficult for a cost leader firm because:

Correct AnswerverifiedShow Answer

It can be said that the Tata Group is pursuing a(n) _____________ strategy at the corporate level when it comes to automobiles.

Correct AnswerverifiedShow Answer

There are two generic strategic positions that require managers to make trade-offs between,in order to achieve success at an integration strategy.They are:

Correct AnswerverifiedShow Answer

When a firm has been able to perform best practices combined with a positive value-cost relationship,it has reached the:

Correct AnswerverifiedShow Answer

Successfully implementing an integration strategy is particularly important in globalized industries.

Correct AnswerverifiedShow Answer

When management decides whether to pursue a broad market position or a narrow market position,they are defining the:

Correct AnswerverifiedShow Answer

A low-cost firm can still gain a competitive advantage even without differentiation parity as long as:

Correct AnswerverifiedShow Answer

Under the five forces model,a risk to a firm with a differentiation strategy is:

Correct AnswerverifiedShow Answer

When pursuing a cost-leadership strategy,the focus of competition is on cost parity,while offering acceptable value.

Correct AnswerverifiedShow Answer

Under the five forces model,a differentiation strategy works best when:

Correct AnswerverifiedShow Answer

When costs per unit fall as output increases,_________________ occur.

Correct AnswerverifiedShow Answer

Apple,Dell,and HP are used as examples in the text for the dynamics of competitive positioning.What does this analysis tell us about these firms?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
These businesses focus on reducing the c...
View Answer

Correct Answer
verified

Correct Answer
verified
The firm would want to gain market share...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified