Chapter 7

__________ is a strategic action.

Acquiring a competitor

Incremental innovation

An overall strategic approach in which a firm patterns itself on other firms, with the exception of one or two key areas.

The maturity stage of the industry life cycle is the fourth stage,

Which is marked by a stabilization of demand, with firms in the industry moving to stabilize or improve profits through cost strategies.

Innovation is the process of creating new products or services, which result in a previously unseen product or service.

Pure

A characteristic of a market that defines the geographic range covered by the market, from local to global

Scope

One degree less of similarity can be

The business equivalent of cloning.

Examples of mass markets are

College students Long-distance runners Seniors (over 65)

A generic strategy aimed at mass markets in which a firm offers a combination of price benefits that appeals to the customer is called a Blank______ strategy.

Cost

______ are changes in competitors, sales, and profits in an industry over time.

Industry dynamics

Some products confer value because they make the customer part of a larger group, such as a member of a club or an online gaming community. This describes a value benefit called:

Belonging

______ strategy is a strategy based on creating a new product or service which has no competitors.

Blue ocean

A ______ is a type of life cycle growth stage marked by a very rapid increase in sales in a relatively short time.

Boom

The scope is a characteristic of a market that

Defines the geographic range covered by the market, from local to global.

______ is the extent to which a product or service is like another.

Degree of similarity

A ______ strategy is a type of generic strategy aimed at clarifying how one product is unlike another in a mass market.

Differentiation

When applying the ______ strategy, a firm tries to show their value benefits that are different and better for their customers.

Differentiation

An ______ wedge is an opportunity that comes unexpectedly and one that sparks your interest.

Entry

True or false: Net profit is the amount of money left over after deducting the cost of goods sold.

False

True or false: To shine in any industry, a firm must avoid meeting the core competencies of its competitors and thus refrain from offering something distinctive that it may do well.

False

Which answer option is a characteristic of the boom stage in the life cycle of a product?

Firms begin to compete on features and prices.

A ______ strategy is a generic strategy that targets a portion of the market.

Focus

______ strategies are three widely applicable classic strategies for businesses of all types-differentiation, cost, and focus.

Generic

______ is what is left after deducting the cost of goods sold.

Gross profit

The ______ stage of the industry life cycle is where customer purchases increase at a dramatic rate.

Growth

Examples of parallel competing businesses are

Hotels Travel companies Coffee shops

When Dunkin Donuts and Starbucks offered "order online pick-up" that other coffee shops did not offer that was an example of

Incremental innovation

Which of the following statements describe the shake-out stage of the industry life cycle?

It ends when the rapid die-off of firms comes to an end. It comes after the boom stage. It is the industry life cycle that is characterized by a decrease in the number of firms in an industry.

Which of the following statements about a boom are correct?

It is a type of life cycle growth stage marked by a very rapid increase in sales in a relatively short time. This happens when a product or service is extremely popular or "hot". Original firms are unable to keep up with consumer demand.

Which of the following statements about the introduction stage of the industry life cycle are correct?

It is when the product or service is being invented and initially developed. There are typically only a few firms at first. Most customers are unaware of the new product.

Which of the following statements characterize the growth stage of the industry life cycle?

It is where customer purchases increase at a dramatic rate. Sometimes products or services becomes so popular that the firms are unable to keep up with demand and it becomes known as a "hot" product. Sometimes other firms jump in to take advantage of the growth and may be called the boom.

A ______ is the business term for the population of customers for the business' product or service.

Market

______ is the actions of a business related to promoting and selling products or services.

Marketing

A ______ market is a customer group that involves large portions of the population.

Mass

The ______ stage of the industry life cycle is the fourth stage, which is marked by a stabilization of demand, with firms in the industry moving to stabilize or improve profits through cost strategies.

Maturity

Which of the following statements about cost strategies are correct?

Small businesses can pursue cost mass-market cost strategies when they have low cost operations. It is a generic strategy in which a firm offers a combination of cost benefits that appeals to the customer. They are aimed at mass markets.

______ actions are competitive responses requiring a major commitment of resources.

Strategic

Blue Ocean Strategy is a(n)

Strategy based on creating a new product or service which has no competitors.

The ability of an entrepreneur to act quickly on an entry wedge opportunity shows the classic ____ of the entrepreneur.

Strength

______ is a way to think about the line of distribution of a product from its start as raw materials to its placement of finished goods into the hands of customers.

Supply chain

Pure innovation is also called

The blue ocean strategy because it results in a brand new product or service.

The ______ of the industry life cycle is when the product or service is being invented and initially developed.

introduction

An innovative strategy is an

overall strategic approach in which a firms seeks to do something that is very different from what others in the industry are doing.

Which of the following types of value benefits is most likely to be offered by a product if it helps the community, a group, the environment, or the world?

Altruism

An industry that offers good potential for making a profit with minimum risk and competition are described as having high industry:

Attractiveness

The best way to identify desirable benefits is through:

Potential customers

A(n) ______ strategy is an overall strategic approach in which a firms seeks to do something that is very different from what others in the industry are doing.

Innovative

______ is the money left after operating expenses are deducted from a business.

Net profit

Which of the following are slogans that reflect distinctive competencies?

Nike: Just do it. America runs on Dunkin. Disneyland: The happiest place on earth.

A business' supply chain is

One of five different sources of competition for any business identified by a strategy guru named Michael Porter.

______ competition is an imitative business that competes locally with others in the same industry.

Parallel

True or False: These five—rivals, entrants, substitutes, suppliers, and customers—are aspects of your industry that can change your profitability and give an edge to any of the many types of competitors you face.

True

True or false: A focus strategy targets a portion of the market, which is called a segment or niche.

True

Strategy is

The idea and actions that explain how a business makes its profits.

Another set of sources that comes from existing competition, other similar businesses to yours, and other options customers use other than your offering is called

Industry sources

Which types of customers is likely to generate more potential customers than any other type?

Passionate customers

The ______ stage in the industry life cycle is characterized by a decrease in the number of firms in an industry.

Shake-out

Select the description that defines the term market.

The business term for the population of customers for the business' product or service.

Industry dynamics are important because

The changes in competition, sales, and profits will indicate if it is a good time to enter a market.

Which of the following statements about the generic strategies are correct?

They are three applicable classic strategies for businesses of all types--differentiation, cost, and focus. The differentiation and cost strategies are aimed at mass markets. The term "generic" comes from the fact that they are so widely applicable.

True or False: Gross profit will be a higher figure than net profit.

True

True or False: Supply chain sources of competition and Industry sources of competition make up Porter's 5 Forces Model of Industry Competition.

True

The scale is a

Characteristic of a market that describes the market's size.