BUS/475: Integrated Business Topics Wk 3 - Practice: Ch. 6, Business Strategy [due Day 5]

Which capability is required to create superior product features?

R&D

In addition to having the lowest cost, a low-cost leader is likely to have ______.

a large market share

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 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

The perceived value that a company creates for consumers less the company's costs to create the value equals ______.

economic value created

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

As JetBlue grew, which of the following occurred during the years following 2007?

It suffered a competitive disadvantage.

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.

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.

Economies of ______ are the savings that come from producing two or more different outputs at a lower cost than producing each output individually.

scope

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

A ______ outlines the steps a manager will take to achieve competitive advantage in a single product market.

business level strategy

A company's goal-directed plans regarding how to compete for advantage is known as the firm's ______.

business level strategy

Which of the following are input factors? (Check all that apply.)

capital information technology services raw materials labor

Unique features and attributes that differentiate a product from competitors' offerings allow the firm to ______.

charge premium pricing

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

Which type of strategy is being used if a company offers a product at a lower cost than its competitors?

cost leadership strategy

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 ______ strategy aims to create higher value for customers by offering products with unique features but a similar level of costs to those of competing products.

differentiation

A(n) ______ strategy attempts to increase the perceived value of a product while controlling costs.

differentiation

A successful blue ocean strategy requires strategists to reconcile the trade-offs between ______.

differentiation and cost leadership

Which of the following are business strategies JetBlue pursued in order to gain a competitive advantage?

differentiation and cost leadership

How to compete on a business level is defined by the variables value and cost. Together they define the ______.

economic value created

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

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

In terms of productivity, which of the following is true of learning curves?

they go down

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

Implementing a blue ocean strategy requires making competition irrelevant and creating a new market space, otherwise known as ______.

value innovation

Which two of the following variables can managers primarily manipulate in order to answer the question, "How should we compete?"

value, cost

Which 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 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.

True or false: A company that achieves differentiation parity at a lower cost has implemented a successful cost-leadership strategy.

True

Which of the following are components of a cost-leadership strategy? (Check all that apply.)

acceptable value lowest costs in the industry

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? (Check all that apply.)

less intense competition from imitators the ability to charge a premium price

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? (Check all that apply.)

offering a "no questions asked" return policy maintaining a domestic call center that is open 24 hours per day

Products in the affordable "business-casual" clothing market have largely become commoditized, and most retailers have begun to compete mainly on price rather than product features. In this environment, it is impossible for one retailer to gain market share without another losing it. This is an example of a ______ ocean.

red

Value drivers known as ______ add value to a product or service when they are consumed in tandem with the focal product.

complements

The concept of a(n) ______ attempts to combine both learning effects and process improvements.

experience curve