rhm 576 ch 6 & 7

Which of the following best explains why a blue ocean strategy is difficult to implement?

It requires the reconciliation of fundamentally different strategic positions-differentiation and low cost.

Which of the following describes an airline that is most likely stuck in the middle?

Just Right Airline offers high-quality beverages and meals, plush airport lounges, only a few connections via hubs domestically, poor customer service, and low prices.

Why are differentiation and cost-leadership strategies referred to as generic business strategies?

They can be used by any organization independent of industry context.

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 appeal creates customer loyalty.

Which of the following provides an example of a firm in a red ocean?

Chique Apparel offered clothing at a low price but failed to differentiate its product as being exclusive.

Which of the following statements is not true about innovation?

Innovation has to be high-tech in order to be a potent competitive weapon.

How did Marriott use economies of scope to achieve greater economic value than its competitors?

Marriott lowered its cost structure by sharing its production assets over a several types of hotels, which increased its menu and thus its differentiated appeal.

Which of the following statements accurately describes social entrepreneurs?

Social entrepreneurs are those who consider financial, ecological, and social metrics to evaluate their firm's performance.

They can be used by any organization independent of industry context.

Strategic trade offs

Which of the following is a drawback of using the industry life cycle as a framework to guide strategic choice?

The framework does not explain everything about changes in industries.

Which of the following is an example of social entrepreneurship?

The committee approved the new formula for an all-purpose cleaner because it cleaned as well as other cleaners and used organic ingredients.

A firm's ability to understand external technology developments, evaluate them, and integrate them into current products or create new ones is called

absorptive capacity.

A(n) _____ leverages new technologies to attack existing markets.

disruptive innovation.

Digital photography replacing film photography would be an example of a(n)

disruptive innovation.

Organic Eats is a restaurant that caters to the needs of a small percentage of highly health-conscious consumers. It has an all-organic, vegan menu. Since there are very few restaurants that offer the same unique services, customers are willing to pay a premium price for its products and services. In this scenario, Organic Eats is following a

focused differentiation strategy.

Whole Foods differentiates itself from competitors by offering top-quality foods obtained through sustainable agriculture. This business strategy implies that Whole Foods focuses on

increasing the perceived value created for customers, which allows it to charge a premium price. lowering its costs compared to its competitors,' while offering adequate value for its products and services.

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

innovation that allows competitors to emerge with more economical replacements

Which of the following lists the stages of the industry life cycle in the correct order?

introduction, growth, shakeout, maturity, and decline

A _____ is best described as a form of intellectual property that gives the inventor exclusive rights to benefit from commercializing a technology for a specified time period in exchange for public disclosure of the underlying idea.

patent

What is strategic entrepreneurship?

the pursuit of an innovation that uses concepts from strategic management

Which of the following statements is true of a strategic position?

Choosing a strategic position requires making important trade-offs between value and cost positions.

Which of the following is a feature of the growth stage of the industry life cycle?

The consumer demand increases.

When a firm operates at the minimum efficient scale, the

returns to scale are constant.

R Lush Roses is a chain of premium hotels around the globe that charges higher prices for its rooms and suites when compared to the average industry standards. Yet, the hotel enjoys the largest market share in the industry. This is mainly due its highly responsive staff that has a strong commitment toward achieving a 100 percent guest satisfaction. In this scenario, which of the following is the key value driver?

superior customer service

The strategic objective of businesses during the shakeout phase of the industry life cycle will primarily be to

survive by drawing on "deep pockets."