Bus. Strat. (Chapter 5)

A narrow market focus is to a differentiation-based strategy as a

broadly-defined target market is to a cost leadership strategy

A market that mainly competes on the basis of price and has stagnant growth is characteristic of what life cycle stage?

maturity

The size of pricing and differentiation advantages between competitors decreases in which stage of the market life cycle?

maturity

A firm following a focus strategy

must focus on a market segment or group of segments

Which statement regarding competitive advantages is true?

If several competitors pursue similar differentiation tactics, they may all be perceived as equals in the mind of the consumer

Which of these statements regarding the industry life cycle is correct?

It has important implications for a firm's generic strategies, functional areas, value-creating activities, and overall objectives

Which of the following phrases best completes this sentence: Because of the Internet, firms that use a focus strategy have new opportunities to

access niche markets in a highly specialized

The primary aim of strategic management at the business level is

achieving competitive advantage

Which of the following is most often true of mature markets

advantages that cannot be duplicated by other competitors are difficult to achieve

All of the following are potential pitfalls of a differentiation strategy EXCEPT:

all rivals share a common input or raw material

All of the following are potential pitfalls of a focus strategy EXCEPT:

all rivals share a common input or raw material

Supplier power

also decreased because there is a certain amount of prestige associated with being the supplier to a producer of highly differentiated products and services

differentiation strategy

consists of creating differences in the firm's product or services offering by creating something that is perceived industry wide as unique and valued customers.

Which of the following is a risk (or potential pitfall) of cost leadership?

cost cutting may lead to the loss of desirable features

The most likely time to pursue a harvest strategy is in a situation of

decline in the market life cycle

High product differentiation is generally accompanied by

decreased emphasis on competition based on price

The text discusses three approaches to combining overall cost leadership and differentiation competitive advantages. These are the following EXCEPT

deriving benefits from highly focused and high technology markets

Which of the following is NOT one of the ways the Internet is lowering transaction costs?

evaluating employee performance

Piecemeal productivity improvements during a turnaround typically does NOT involve

expansion of a firm's product market scope

Research shows that the following are all strategies used by firms engaged in successful turnarounds EXCEPT

global expansion

In the ______________ stage of the industry life cycle, the emphasis on product design is very high, the intensity of competition is low, and the market growth rate is low

introduction

During the decline stage of the industry life cycle, _______________ refers to obtaining as much profit as possible and requires that costs to decreased quickly

harvesting

Research has consistently shown that firms that achieve both cost leadership and differentiation advantages tend to perform

higher than firms that achieve either a cost or a differentiation advantage

The experience curve suggests that cutting prices is a good strategy

if it can induce greater demand and thereby help a firm travel down the experience curve faster

Potential pitfalls of a differentiation strategy

include uniqueness that is not valuable, too much differentiation, too high a price premium, differentiation that is easily imitated, dilution of brand identification through product-line extensions, or perceptions of differentiation may vary between buyers and sellers

Harvesting

involves obtaining as much profit as possible and requires that costs be reduced quickly

A differentiation strategy enables a business to address the five competitive forces by

lessening competitive rivalry by distinguishing itself

Dell Computer has an online ordering system that allows consumers to configure their own computers before Dell builds them. This capability is an example of

mass customization

Which of the following methods of implementing a differentiation strategy has been greatly enhanced because of Internet technologies?

mass customization

One of the reasons the Internet is eroding sustainable competitive advantage is

nearly all competitors will have greater access to tools for managing costs making it hard for any one to achieve an advantage

A firm can achieve differentiation through all of the following means EXCEPT

offering lower prices to frequent customers

Convincing rivals not to enter a price war, protection from customer pressure to lower prices, and the ability to better withstand cost increases from supplies characterize which type of competitive advantage?

overall cost leadership

Primary value chain activities that involve the effective layout of receiving dock operations (inbound logistics) and support value chain activities that include expertise in process engineering (technology development) characterize what generic strategy?

overall cost leadership

Which of the following statements about the introduction stage of the market life cycle is TRUE?

products or services offered by pioneers may be perceived as differentiated simply because they are new

A ____________ can be defined as the total profits in an industry at all points along the industry's value chain.

profit pool

Differentiation

provides protection against rivalry since brand loyalty lowers customers sensitivity to price and raises customer switching costs

A manufacturing business pursuing cost leadership will likely

rely in experience effects to raise efficiency

One aspect of using a cost leadership strategy is that experience effects may lead to lower costs. Experience effects are achieved by

repeating a process until a task becomes easier

Decline stage of the industry life cycle

there are few segments, the emphasis on process design is low, and the major functional areas of concern are general management and finance

In the maturity stage of the industry life cycle

there are many segments, competition is very intense, and the emphasis on process design is high

As markets mature,

there is increasing emphasis on efficiency

The growth stage of the industry life cycle is characterized by

"in-kind" competition (from the same type of product)

Support value chain activities that involve excellent applications engineering support (technology development) and facilities that promote a positive firm image (firm infrastructure) characterize what generic strategy?

Differentiation

Three approaches to combining low cost and differentiation include

automated and flexible manufacturing systems, exploiting the profit pool concept for competitive advantage, and coordinating the "extended" value chain by way of information technology

In a given market, key technology no longer has patent protection, experience is not an advantage, and there is growing need to compete on price. What stage of its life cycle is the market in?

maturity