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Which of the following is an example of a subscription business model?

. We Craft Box, which delivers monthly craft supplies and instructions for children for about $25 per month

Which of the following strategies could be implemented to improve a company's richness in its customer relationships?

Satisfaction surveys following the arrival of a product

Southwest Airlines' decision to "perform activities differently" has allowed the organization to differentiate itself from competitors and made it a low-cost leader. Which of the following activities is NOT contributing to the firm's ability to fulfill the purpose of this business strategy?

d. Offering free in-flight meals

As part of its selection of a business-level strategy, a firm will decide which customers it will serve, what needs those customers have that it will satisfy, and:

how it will satisfy those customers' needs using its core competencies to implement value-creating strategies.

To be successful, a firm utilizing an integrated cost leadership/differentiation strategy must:

increase the number of primary value chain activities and support functions in which it becomes competent.

Cost leadership strategies can be attractive to companies looking to address the competitive force of rivalry with existing competitors because:

rivals are hesitant to slash their own prices to compete with a low-cost leader.

With a focus strategy, a company:

selects a more narrow group, or niche, of customers on which to concentrate its efforts.

Differentiation strategies are successful in addressing the competitive force of the bargaining power of suppliers because:

the higher margins of the firm can reduce the influence of increases in supplier costs.

A cost leadership strategy is one in which:

a company uses process innovations, such as advanced production or distribution methods, to operate efficiently.

A business-level strategy is:

an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in a specific product market.

Many companies pursue an integrated cost leadership/differentiation strategy, working to lower cost structures while also enhancing their products and services. To successfully pursue this strategy, companies could:

. invest in developing total quality management (TQM) systems and improving marketing effectiveness.

How is a business model different from a business-level strategy?

A business model describes what a firm does while a business-level strategy describes how it does it.

Which of the following scenarios represents a company that has selected a differentiation strategy?

A grocery store chain is converting its local neighborhood stores to warehouses. The chain eliminates shopping in the aisles and instead has customers select items online or through an app. The customers can then pick up their items in a drive-through without having to leave their vehicles.

Which of the following might be an alternative definition of business-level strategy?

A plan for how the company will compete in its industry against its rivals to achieve a competitive advantage

A software firm has chosen to implement a differentiation strategy, offering its product in a Software as a Service (SaaS) platform with a monthly subscription. Most of the firm's competitors are selling their products as a one-time purchase. Which of the following represents the greatest risk to the strategy?

An established competitor has announced it will begin offering its programs in a SaaS model next quarter.

Among firms utilizing a differentiation strategy, which of the following best exemplifies the typical relationship between consumers' brand loyalty and price sensitivity, and the effect it has on a brand's rivalry with competitors?

Apple's customers tend to be extremely brand loyal and are thus more tolerant of price increases. However, as Samsung creates increasingly similar products, Apple will have to respond by improving the perceived value of its products.

Which of the following represents a risk for companies pursuing a differentiation strategy?

Competitors' imitation of a product at a lower price causing customers to purchase their product

Which of the following represents a risk for companies pursuing a cost leadership strategy?

Competitors' innovations resulting in their ability to drive costs lower

An oil company develops an innovative refining process that reduces the time required to produce gasoline by 25 percent. The company has identified its unique process as a core competency. Which of the following strategies would be most beneficial for the company to pursue?

Cost leadership

Dan Jones, the owner of Harbor Home Remodeling, has been researching demographic information on homeowners in his area. He has learned that younger people are moving out of the region—a trend that's expected to continue—while middle-aged and older people are remaining in their homes. In order to differentiate his firm and better compete against rival, general remodeling firms in this environment, which strategy would best enable Dan to fulfill his purpose?

Dan should "perform activities differently" and pursue a focused differentiation strategy. He could specialize in remodeling homes to meet the unique needs of aging people, such as installing wheelchair ramps and low-threshold showers.

An industry-leading technology firm utilizing a differentiation strategy has decided to increase prices on its patented product to bolster profit margins and deliver a higher return to investors. Consider the impact of this decision in light of the forces of competition. Which of the following situations should the firm prioritize?

Rivalry with existing competitors

Research indicates that a competitive advantage in logistics is a primary strategy that creates the most value for a cost leadership strategy. Which of the following value-creating activities should be a focus for a company pursuing a cost leadership strategy?

Supply-chain management

A construction company is pursuing a focused differentiation strategy, and after reviewing its core competencies, the leaders have decided to specialize in hospital construction. Which of the following is an example of how that strategy is addressing the bargaining power of buyers (customers)?

The company participates in competitive bidding processes, and despite often submitting a higher bid than competitors, it is awarded the job based on its expertise.

Which of the following statements regarding firms following a differentiation strategy is NOT true?

When a firm succeeds at differentiating its products, it acts as a magnet attracting potential new entrants into the market.

Often a company's business-level strategy can be easily identified by reviewing its marketing materials. Consider the marketing slogans of the following companies and identify which one is pursuing a business-level strategy of differentiation.

Whole Foods - America's Healthiest Grocery Store

Companies must effectively manage their relationships with customers because:

companies must satisfy customers' needs to achieve a competitive advantage.

A differentiation strategy is one in which a firm:

creates products that have features that customers value and are willing to pay a higher price for.

The effectiveness of a business-level strategy is contingent on:

he opportunities and threats in a firm's external environment and the strengths and weaknesses of a firm's resources.

About six months ago, a mid-sized manufacturer of athletic shoes decided to pursue an integrated cost leadership/differentiation strategy. The company reduced its internal costs by consolidating the number of colors and variations it offers to customers, savings that the company passed on to consumers. At the same time, the research and development (R&D) team added a patented sole to all of its shoes. Which of the following represents the best argument for the company to continue pursuing its current business-level strategy?

"It's true we've seen our net sales decline, but our gross profit has increased and our volumes are up year-over-year. Our patent for the sole has been approved, and the legal department says we're good to go on our advertising claims about the new sole."

Michelle opens a residential heating company dedicated to geothermal heating systems. She is pursuing a focused differentiation strategy, serving the needs of customers who are looking for environmentally friendly solutions to heat and cool their homes. Which of the following represents a risk to the company because Michelle is using a focus strategy rather than a broad strategy?

As renewable energy continues to gain popularity, mainstream residential heating and cooling companies that are larger and have more resources decide to offer more geothermal options.