Wk 3 - Practice: Ch. 6, Business Strategy [due Day 5]
In addition to having the lowest cost, a low-cost leader is likely to have ______.
a large market share
Which of the following are components of a cost-leadership strategy?
acceptable value. lowest costs in the industry.
If two firms produce very similar products at the same rate of output, and firm A is able to achieve lower per-unit costs than firm B by taking advantage of a new manufacturing technology, firm A is benefiting from
an experience-curve effect based on process innovation.
A company's goal-directed plans regarding how to compete for advantage is known as the firm's ______.
business-level strategy
Unique features and attributes that differentiate a product from competitors' offerings allow the firm to ______.
charge premium pricing
Value drivers known as ______ add value to a product or service when they are consumed in tandem with the focal product.
complements
A firm that increases its output of a given product and experiences a simultaneous decrease in per unit costs is taking advantage of ______.
economies of scale
An auto manufacturer that has access to cheaper labor and raw materials than its rivals will have a competitive advantage regarding lower cost of ______ factors.
input
Implementing a blue ocean strategy requires making competition irrelevant and creating a new market space, otherwise known as ______.
value innovation
Which of the following are input factors?
raw materials. labor. capital. information technology services.
The most significant challenge JetBlue faced in implementing its business strategy was _____.
reconciling the trade-offs between cutting costs and providing superior service
A firm that manages to avoid competition entirely by offering a product or service that creates an uncontested market space is engaging in ______.
value innovation
A(n) ______ strategy attempts to increase the perceived value of a product while controlling costs.
differentiation
Which of the following are business strategies JetBlue pursued in order to gain a competitive advantage?
differentiation and cost-leadership
Patti's Potato Chips is a national potato-chip manufacturer. Calpurnia's Crisps is a small-batch gourmet potato-chip maker. Based on just this information, which of the following is the greatest advantage Patti's has over Calpurnia's?
economies of scale
Why does the learning curve go down when productivity is considered?
As workers repeatedly engage in an activity, they become more efficient, driving down costs.
What is one of the benefits of pursuing a differentiation strategy when it comes to the power of suppliers?
Differentiation provides protection against an increase in input prices.
True or false: Formulating a business strategy is a relatively easy task because only a few strategic options are available.
False
Business-level strategy addresses which overarching question?
How should we compete?
Which of the following competitive forces can result in the erosion of margins for both differentiation and cost-leadership business strategies?
Power of buyers. Power of suppliers. Threat of entry.
Which capability is required to create superior product features?
R&D
Which type of strategy is being used if a company offers a product at a lower cost than its competitors?
cost-leadership strategy
Which of the following are considered the two generic business-level strategies?
cost-leadership. differentiation.
Which two of the following variables can managers primarily manipulate in order to answer the question, "How should we compete?"
cost. value.
Which value driver would be the focus of a company that sells products that are similar to competing products and that provides a 60-day guarantee with no questions asked?
customer service
A struggling retailer seeking to implement a blue ocean strategy is likely to experience difficulty with ______.
cutting costs and increasing value at the same time
A cost leader can achieve a competitive advantage by ______.
reducing costs below those of competitors while maintaining a similar value
A manufacturer of electronic components can use its manufacturing machines to produce many different components such as semiconductors, sensors, and capacitors. In this case, the firm benefits from an economy of ________, reducing overall production costs by finding multiple uses for its components and facilities.
scope
Economies of ______ are the savings that come from producing two or more different outputs at a lower cost than producing each output individually.
scope
A successful blue ocean strategy requires strategists to reconcile the trade-offs between ______.
differentiation and cost-leadership
Why do many firms fail to successfully implement a blue ocean strategy?
because they end up being "stuck in the middle," unable to increase value and lower costs at the same time
Which of the following best defines economies of scope?
They are the savings that come from producing two or more outputs at less cost than producing each output individually.
What must strategic leaders keep in mind if they are going to achieve successful strategic positioning?
To achieve strategic positioning, firms must make important trade-offs.
Bundling of products and services that are consumed in tandem to create value is an example of ______.
complements
The goal of a _____________ strategy is to achieve expenses below those of competitors while maintaining similar value. A firm with this strategy could or could not achieve differentiation parity.
cost leadership
The concept of a(n) ______ attempts to combine both learning effects and process improvements.
experience curve
Which of the following are examples of ways that a large retailing firm can increase the perceived value of its offerings by focusing on customer service?
maintaining a domestic call center that is open 24 hours per day. offering a "no questions asked" return policy
A producer of consumer headphones that successfully differentiates its products with a patented noise-canceling technology and celebrity endorsements will enjoy which of the following benefits?
the ability to charge a premium price. less intense competition from imitators
The perceived value that a company creates for consumers less the company's costs to create the value equals ______.
the economic value created
In terms of productivity, which of the following is true of learning curves?
they go down.
In terms of business strategy, blue oceans represent which of the following?
untapped market space. increased demand.