Mindtap CH6

Companies that use a focus strategy have narrow buyer groups.

True (Companies that use a focus strategy target a specific market or customer base. One of the top 10 iPhone applications for 2009 was RunKeeper—a product designed specifically for runners who wanted to keep track of their workouts.)

When determining whether or not two firms are direct competitors, one can consider the level of ____________ and ____________

market commonality, resource similarity

Managers often consider a ___________ strategy when deciding whether diversification is the right approach for their company.

portfolio

Pretend that you own a small coffee shop. You have decided that this year is a good time to grow your business, and you have chosen to do so by acquiring another coffee shop one town over. This is an example of __________

related diversification

When a company purchases another business that does something similar to what the purchasing company does, the purchasing company is using a strategy of _________________

related diversification

The ____________ is influenced by all of the other competitive forces.

rivalry among competitors

When conducting a SWOT analysis, information about turnover, profit margins, and staff quality can be used to identify:

Company strengths and weaknesses

Employee abilities to create innovative products are critical for companies that adopt a low-cost leadership strategy.

False (Companies that adopt a low-cost leadership strategy typically avoid product innovation in favor of efficiency and cost reduction.)

Businesses that do not adopt a differentiation, low-cost leadership, or focus strategy tend to be more successful than businesses that do adopt these strategies.

False (Differentiation, cost leadership, and focus strategies can all give companies a competitive advantage under the right circumstances, but Porter's research shows that a company without a strategy is not likely to be successful.)

Which of the following would be considered direct competitors?

Walgreens and CVS

Which of the following divisions would you invest in heavily?

HIGH growth rate, HIGH current market share

One of the four components of a sustainable competitive advantage, _____ resource cannot be easily replaced to produce something with a similar value to the consumer.

a nonsubstitutable