INTG BUS POLICY/STRATEGY - Week 6

A differentiation strategy works best when a

firm has intangible resources, is able to pass on increases in supplier cost to the customer, and its differentiation appear; creates customer loyalty

Value drivers contribute to a firm's competitive advantage only if

the increase in value creation excess the increase in costs

How is differentiation partly different from cost parity?

Differentiation parity deals with value not cost

What does it mean for a firm to have an 80 percent learning curve?

Every time the cumulative output is doubled, the cost per unit will decline by 20 percent

Differentiation and cost leadership strategies are only effective in manufacturing industries

FALSE

The goal of the differentiator is to have a smaller value gap than competitors

FALSE

When a blue ocean strategy goes bad, a firm has neither a clear differentiation nor a clear cost-leadership profile. This situation is referred to as

Stuck in the middle

A cost leader is the firm most likely to survive a price war

TRUE

A ______ primarily details the goal-directed actions managers take in their quest for competitive advantage when competing in a single product market

business-level strategy

In a focus cost-leadership strategy, a firm

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

The concept of a(n) ____ attempts to capture both learning effects and process improvements at firms

experience curve

According to the five forces model, which of the following is viewed as a major risk to a business pursing a cost-leadership strategy?

innovation that allows competitors to emerge with more economical replacements

Combining economies of learning with the existing production technology allows a firm to

move down a given learning curve

The primary goal of a firm pursuing blue ocean strategy should be to

offer a differentiated product or service at a low cost

A firm's business strategy can lead to a competitive advantage if it allows the firm to

perform different activities than its rivals

A blue ocean strategy differs from a low-cost strategy in that

the intent of a blue ocean strategy is not to be the absolute lowest-cost provider because a blue ocean must also increase perceived value