Business Policy Exam 2
A firm owns several businesses, including a personal loan office and a furniture store. Another standalone personal loan office is suffering financially because of the allocation of its assets. The furniture business decides to buy the standalone personal loan business, restructure its assets, and then sell it as operations resume more successfully. This is an example of: a. unrelated diversification. b. value-neutral diversification. c. value-creating related diversification. d. vertical integration.
a
Awareness, motivation, and ability are drivers of: a. competitive behavior. b. a competitor analysis. c. competitive rivalry. d. competitive dynamics.
a
DOS, a leader in the computer industry, implemented a new strategic action to offer a video streaming service to consumers. The move has proven to be successful. How are competitors likely to respond? a. They are likely to imitate the action quickly. b. They are likely to imitate the action, but only after a significant amount of time. c. They are likely to imitate the action only if other competitors take the same action. d. They are not likely to imitate the action at all.
a
FreeForAll is an online retailer for graphic T-shirts and hats. Previously, it was the only mass retailer for such goods. Hatz, an in-store retailer that sells predominantly baseball hats, has just launched an e-commerce site that also features T-shirts for sale. FreeForAll has decided to respond quickly to Hatz's competitive action. This decision is based on FreeForAll's: a. market dependence. b. competitive dynamics. c. reputation. d. market independence.
a
Many companies pursue an integrated cost leadership/differentiation strategy, working to lower cost structures while also enhancing their products and services. To successfully pursue this strategy, companies could: a. invest in developing total quality management (TQM) systems and improving marketing effectiveness. b. concentrate all efforts on cost-saving projects within their production processes. c. increase exposure and brand awareness through digital and print marketing campaigns. d. develop new products every year to continue attracting customers and meet their upgrade expectations.a
a
Sports Inc. has developed a shoe to compete with Air Jordans. In order to keep up with competitors and minimize competitor market power, the firm decides to sell branded sports equipment as well. By introducing another new business so soon outside of its shoe products, the firm stands to lose value. Sports Inc.'s reason for diversifying itself is to _____ by acquiring a _____. a. neutralize another firm's advantage; similar distribution outlet b. decrease another firm's advantage; similar distribution outlet c. increase its value; similar distribution outlet as a competitor d. decrease another firm's value; different distribution outlet
a
Typically, a diversification strategy is used to _____ the firm's value by _____ its overall performance. a. increase; improving b. maintain; improving c. decrease; improving d. increase; decreasing
a
What type of financial economy is undertaken to reduce risk among a firm's businesses? a. Internal capital market allocation b. Restructuring of assets c. Vertical integration d. Economies of scope
a
Which of the following characteristics best describes tactical actions? a. Relatively easy to implement and reverse b. Involve significant resources c. Difficult to implement and reverse d. Fully counter the effects of a competitor's actions
a
Which of the following relates to a firm's resources and the flexibility they provide? a. Ability b. Awareness c. Incentive d. Motivation
a
Which of the following represents a risk for companies pursuing a differentiation strategy? a. Competitors' imitation of a product at a lower price causing customers to purchase their product b. Failing to meet customers' minimal level of acceptable service c. Competitors' imitation of the value chain activities that make up the company's strategy d. Competitors' innovations resulting in their ability to drive costs lower
a
low-cycle markets are markets in which the firm's: a. competitive advantages are shielded from imitation, commonly for long periods of time, and where imitation is costly. b. capabilities that contribute to competitive advantages aren't shielded from imitation and where imitation is often rapid and inexpensive. c. competitive advantages are partially shielded from imitation and where imitation is moderately costly. d. competitive advantages are shielded from imitation, commonly for short periods of time, and where imitation is cheap.
a
How is a business model different from a business level strategy?
a business model describes what a firm does while a business-level strategy describes how it does it
A cost leadership strategy is one in which:
a company uses process innovations, such as advanced production or distribution methods, to operate efficiently
By introducing Google Pay in response to Apple Pay, Google hopes to build and defend its competitive advantages and improve its market position through
competitive behavior
Which of the following scenarios represents a company that has selected a differentiation strategy? a. A grocery store chain is converting its local neighborhood stores to warehouses. The chain eliminates shopping in the aisles and instead has customers select items online or through an app. The customers can then pick up their items in a drive-through without having to leave their vehicles. b. A company is developing a tablet device that sells features, such as speed and memory, as add-ons to produce a base model of its device that is below the typical market cost. c. A tool manufacturer is investing in research and development (R&D) to develop modifications to existing tools so that they can be used more effectively and safely in the oil and gas industry. d. A restaurant entrepreneur announces a new fast-food chain where every item on the menu is just $1.
a.
Which of the following is an example of a subscription business model? a. We Craft Box, which delivers monthly craft supplies and instructions for children for about $25 per month b. Mint finance tracking software, which is offered at no cost as an introduction to QuickBooks' other subscription services c. KFC, which licenses individuals to use its trademark and processes when selling its branded fried chicken and other fast-food products d. The Facebook social media platform, which is available to users at no cost and earns its income from paid advertising aimed at those users
a. We Craft Box, which delivers monthly craft supplies and instructions for children for about $25 per month.
A business level strategy is:
an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in a specific product market
A pharmaceutical company has a patented antidepressant that has few side effects and dominates the market. The company has been conducting research and development (R&D) to improve this drug for several years. The pharmaceutical company would be categorized as part of a _____ market. a. fast-cycle b. slow-cycle c. standard-cycle d. no-cycle
b
Apple has been known to sell its products at higher rates than competitors, such as Microsoft, as it has been successful at convincing consumers that Apple products are special and more luxurious in comparison. By accomplishing this, Apple has gained: a. multipoint competition. b. market power. c. corporate-level core competencies. d. brand awareness.
b
Car maker BAAS is known for its risky competitive behavior, including drastically changing its prices over short time spans. Based on this information, which of the following is the most likely competitor response? a. Competitors will be more likely to respond because of BAAS' risky behavior. b. Competitors will be less likely to respond because of BAAS' risky behavior. c. Competitors will be more likely to respond because of BAAS' stability in the market. d. Competitors will be less likely to respond because of BAAS' stability in the market.
b
Corporate-level strategy is best described as: a. strategies a firm implements to gain a competitive advantage by selecting and managing a single business competing in several product markets. b. actions a firm takes to gain a competitive advantage by selecting and managing a group of different businesses competing in different product markets. c. actions a firm takes to gain a competitive advantage by selecting and managing one business competing in a single product market. d. strategies a firm implements to gain competitive advantage by selecting and managing a group of businesses competing in a single product market.
b
Fast-cycle markets are markets in which the firms' capabilities that contribute to competitive advantages aren't shielded from imitation and where imitation is often _____ and _____. a. slow; inexpensive b. rapid; inexpensive c. rapid; expensive d. slow; expensive
b
Firms use corporate-level strategies for several reasons, including to: a. decrease revenues and profits. b. pursue development of a market. c. sell a supplier or customer. d. segment themselves into limited markets.
b
Ishanti owns the only yoga studio in town. However, a national gym is opening in a few months. Historically, businesses like hers have closed after the national chain opened nearby. Which of the following options should Ishanti implement? a. A competitive response b. A strategic action c. A strategic response d. A tactical action
b
Steeler Manufacturing uses an unrelated diversification strategy throughout its operations. For instance, Steeler has five core businesses, all of which are unrelated. Each of its businesses is large and indicates Steeler's success in implementing an unrelated diversification as a _____ firm. a. low diversified b. very highly diversified c. moderately to highly diversified d. nondiversified
b
Turtlecreek owns a high-end grocery chain, a high-end outdoor gear chain, and a sporting goods chain. Its retail businesses are unrelated; however, the firm hopes to gain an advantage over its competitors by associating its perceived luxury brand with each business. By selecting and managing these various businesses, Turtlecreek is implementing a _____ strategy. a. business-level b. corporate-level c. firm-level d. small-business
b
What are economies of scope? a. Complex sets of resources and capabilities that link different businesses, primarily through managerial and technological knowledge, experience, and expertise b. Cost savings a firm creates by successfully sharing resources and capabilities or transferring one or more corporate-level core competencies that were developed in one of its businesses to another of its businesses. c. The abilities of a firm to sell its products above the existing competitive level or to reduce the costs below the competitive level of its primary and support activities d. The advantages achieved when a company produces its own inputs or owns its own source of output distribution.
b
What are the two ways an unrelated diversification strategy can create value through financial economies? a. Efficient external capital allocations and the restructuring of acquired allocations b. Efficient internal capital allocations and the restructuring of acquired assets c. Efficient external capital allocations and the restructuring of acquired assets d. Inefficient internal capital allocations and the restructuring of acquired assets
b
Which of the following is an advantage of being part of a slow-cycle market as opposed to a fast-cycle market? a. In slow-cycle markets, firms must innovate rapidly in order to stay competitive. b. In slow-cycle markets, firms can shield themselves from imitation. c. In slow-cycle markets, firms can innovate at a slower pace, although it's often expensive. d. In slow-cycle markets, firms can innovate at a faster pace, and it's often inexpensive.
b
A construction company is pursuing a focused differentiation strategy, and after reviewing its core competencies, the leaders have decided to specialize in hospital construction. Which of the following is an example of how that strategy is addressing the bargaining power of buyers (customers)? a. The company accepts a lower profit margin rather than raise prices after its supplier of medical regulators raises prices. b. The company participates in competitive bidding processes, and despite often submitting a higher bid than competitors, it is awarded the job based on its expertise. c. In a year where only a few hospitals are being built, the company's leaders decide to offer discounted pricing to customers to ensure that they have a steady stream of work. d. Seeing the success of the hospital construction company, other construction firms decide to narrow their focus and create business units dedicated to this customer segment.
b.
A software firm has chosen to implement a differentiation strategy, offering its product in a Software as a Service (SaaS) platform with a monthly subscription. Most of the firm's competitors are selling their products as a one-time purchase. Which of the following represents the greatest risk to the strategy? a. There's a shortage of technical workers to maintain the software platform, causing human resources to increase wages to attract quality employees. b. An established competitor has announced it will begin offering its programs in a SaaS model next quarter. c. As the number of users increases, the company will need to invest resources to scale the SaaS platform. d. The biggest competitor in this software market is slashing its prices to below the company's annual rate.
b.
FedEx and United Parcel Service (UPS) compete in many of the same markets and have similar types of truck and airplane fleets, similar levels of financial capital, and other similarities. These tangible and intangible resources between the two firms describe the: a. resource differentiation. b. resource similarity. c. market similarity. d. market differentiation.
b.
Often a company's business-level strategy can be easily identified by reviewing its marketing materials. Consider the marketing slogans of the following companies and identify which one is pursuing a business-level strategy of differentiation. a. Walmart - Save Money. Live Better. b. Whole Foods - America's Healthiest Grocery Store c. Days Inn - The Best Value Under the Sun d. Ross Stores - Dress for Less
b.
Dan Jones, the owner of Harbor Home Remodeling, has been researching demographic information on homeowners in his area. He has learned that younger people are moving out of the region—a trend that's expected to continue—while middle-aged and older people are remaining in their homes. In order to differentiate his firm and better compete against rival, general remodeling firms in this environment, which strategy would best enable Dan to fulfill his purpose? a. Dan should "perform activities differently" and pursue a cost leadership strategy. By using less expensive materials and cheaper labor, he could reduce the cost of his remodeling services. b. Dan should "perform activities differently" and pursue a focused differentiation strategy. He could specialize in remodeling homes to meet the unique needs of aging people, such as installing wheelchair ramps and low-threshold showers. c. Dan should "perform different activities" and transition into building new, custom homes for the segment of the market that interests him—retirees and the elderly. d. Dan should "perform activities differently" and pursue a differentiation strategy. In addition to his remodeling services, he could offer other home repair services, such as plumbing and electrical repair.
b. Dan should "perform services differently" and pursue a focused differentiation strategy. He could specialize in remodeling homes to meet the unique needs of aging people, such as installing wheelchair ramps and low-threshold showers.
Which of the following might be an alternative definition of business-level strategy? a. a picture of what the firm wants to be in broad terms and what it hopes to achieve b. a plan for how the company will compete in its industry against its rivals to achieve a competitive advantage c. the inputs into a firm's production process, including physical, human, and organizational capital d. the source of competitive advantage for a firm to deliver above-average returns
b. a plan for how the company will compete in its industry against its rivals to achieve a competitive advantage
A differentiation strategy is one in which a firm: a. concentrates on ways to reduce cost as its primary focus. b. creates products that have features that customers value and are willing to pay a higher price for. c. has core competencies in production and distribution efficiencies to reduce required inputs. d. divides its customers into clusters of people with similar needs.
b. creates products that have features that customers value and are willing to pay a higher price for
The effectiveness of a business-level strategy is contingent on: a. selection of the best business-level strategy—an integrated cost leadership/differentiation strategy. b. the opportunities and threats in a firm's external environment and the strengths and weaknesses of a firm's resources. c. a firm's decision to pursue a focus strategy developed through market segmentation. d. the external communication of the strategy to a company's customers.
b. the opportunities and threats in a firm's external environment and the strengths and weaknesses of a firm's resources
A company is looking to diversify as a way to reduce risk and protect against uncertain future cash flow from its core business. These efforts would most likely have which of the following impacts on the firm's value? a. It would create new value. b. It would increase the firm's value. c. It would be value-neutral. d. It would decrease the firm's value
c
A new family-owned organic grocery store has been successful since its grand opening nearly a year ago. With little competition in the area, the organic grocery store has been particularly successful in selling organic food to consumers. The grocer has just found out that Whole Foods will be starting construction on a new store nearby. The grocery store feels that its family ownership and locally grown food offerings give it a position in which to take action against the developing Whole Foods. However, as a small business, the organic grocery store does not have the financial means to launch a rivalry against Whole Foods. In this instance, the organic grocery store is missing which driver of competitive behavior? a. Awareness b. Motivation c. Ability d. The grocery is not missing any driver of competitive behavior.
c
A single-business diversification strategy and a dominant-business diversification strategy are both examples of what level of diversification? a. Moderate to high level b. Very high level c. Low level d. Very low level
c
About six months ago, a mid-sized manufacturer of athletic shoes decided to pursue an integrated cost leadership/differentiation strategy. The company reduced its internal costs by consolidating the number of colors and variations it offers to customers, savings that the company passed on to consumers. At the same time, the research and development (R&D) team added a patented sole to all of its shoes. Which of the following represents the best argument for the company to continue pursuing its current business-level strategy? a. "We're getting some complaints from long-standing customers about the fact that they can only get shoes in hot pink or lime green." b. "Our women's shoes are selling at higher volumes and at greater margins than our children's and men's shoes. However, women represent 50 percent of the population but only 25 percent of our business." c. "It's true we've seen our net sales decline, but our gross profit has increased and our volumes are up year-over-year. Our patent for the sole has been approved, and the legal department says we're good to go on our advertising claims about the new sole." d. "We're getting a lot of pressure from our suppliers. They're telling us that they're going to increase the raw materials cost for our soles. Even comparing against other suppliers, we simply can't get a better price at the volumes that we're purchasing."
c
Corporate-level strategy is concerned with which of the following key issues? a. What product markets the firm can compete in as a standalone business b. What businesses the firm should plan to acquire to increase its competitive advantage c. What product markets and businesses the firm should compete in and how corporate headquarters should manage those businesses d. What product markets and businesses the firm should compete in and how the firm should manage itself
c
Glow Makeup is a moderately-diversified firm, as it has three main related businesses, including a skin care business, nail polish business, and facial cosmetic business. Its divisions are composed of different products, but they are all related to cosmetics. As a result, the firm maintains many of the same resources and certain activities within each of its operations. Based on this information, Glow Makeup uses a(n) _____ diversification strategy. a. unrelated b. related linked c. related constrained d. dominant-business
c
Sandra is developing a competitor analysis for two florists. Which of the following information in the analysis will be the basis for predicting the competitors' behavior in the form of their competitive actions and responses? a. Threats b. Capabilities c. Market commonality d. Weaknesses
c
Which of the following firms is more likely to take competitive action? a. A large firm b. A medium-sized firm c. A small firm d. Size is not a good predictor of the likelihood a firm will take competitive action.
c
Which of the following is NOT a reason for a firm to respond to a competitor's action? a. The action leads to better use of the competitor's capabilities to develop a stronger competitive advantage or an improvement in its market position. b. The action damages the firm's ability to use its core competencies to create or maintain an advantage. c. The firms have resource dissimilarity. d. The firm's market position becomes harder to defend.
c
Which of the following is an example of multimarket competition? a. Company A makes only sedans and SUVs. Company B makes semi-trailer trucks that transport products to retailers. b. Company A prints coloring books. Company B makes crayons and markers. c. Company A makes tomato sauce sold to consumers in grocery stores and to restaurants. Company B sells tomato sauce to consumers in grocery stores. d. Company A sells property insurance in Ohio. Company B sells property insurance in California.
c
Which of the following may result if Bella's Eatery does not conduct a competitor analysis? a. Creation of a competitive advantage b. Discovery of market commonality c. Formation of competitive blind spots d. Discovery of resource similarity
c
Which of the following statements about standard-cycle markets is true? a. Firms often obtain patents to protect, maintain, and extend a competitive advantage. b. There is a high velocity of change. c. Firms' competitive advantages are partially sustainable. d. Customer loyalty is less important.
c
Which of the following types of diversification strategies is characterized by less than 70 percent of revenue coming from the dominant business and limited links between businesses? a. Dominant-business b. Related constrained c. Related linked d. Unrelated
c
With a focus strategy, a company: a. focuses on a broad, integrated group of customers. b. produces products with features that are acceptable to customers at the lowest cost. c. selects a more narrow group, or niche, of customers on which to concentrate its efforts. d. produces products that customers perceive as being different in ways that are important to them.
c
Among firms utilizing a differentiation strategy, which of the following best exemplifies the typical relationship between consumers' brand loyalty and price sensitivity, and the effect it has on a brand's rivalry with competitors? a. Granny Smith's Frozen Dinners are recognized as superior products, and the brand has a dedicated, loyal following. However, the firm's customers are also extremely price sensitive, so Granny Smith must keep product prices low to compete against its rivals. b. Consumers are so devoted to Nike footwear that they are willing to pay any price for these products. Nike has so thoroughly differentiated its footwear products that it is completely insulated from competition against rivals. c. Apple's customers tend to be extremely brand loyal and are thus more tolerant of price increases. However, as Samsung creates increasingly similar products, Apple will have to respond by improving the perceived value of its products. d. All-Star Tires has an excellent reputation for quality, and car owners have demonstrated their loyalty to the brand by making it the top tire manufacturer in the nation. A recent price increase sent sales plummeting, however, so All-Star has no choice but to pursue a new integrated cost leadership/differentiation strategy.
c.
Which of the following statements regarding firms following a differentiation strategy is NOT true? a. Although a firm that has successfully differentiated its products typically develops a loyal following that is less price sensitive, it must always be aware of rival products and respond by continuing to improve the value of its own products. b. A firm that has successfully differentiated its products may have to pay higher costs for high-quality components, but these costs are offset by the firm's higher margins. c. When a firm succeeds at differentiating its products, it acts as a magnet attracting potential new entrants into the market. d. When a firm has successfully differentiated its products from other competing products, it decreases the likelihood that consumers will opt for product substitutes.
c.
Cost leadership strategies can be attractive to companies looking to address the competitive force of rivalry with existing competitors because: a. it is easier to cut costs than it is to generate greater differentiation among products or services. b. brand loyalty is a byproduct of this strategy, leading customers to choose the company's product over its rivals' products. c. rivals are hesitant to slash their own prices to compete with a low-cost leader. d. rivals are forced to compete using substitute products rather than with their core offering.
c. rivals are hesitant to slash their own prices to compete with a low-cost leader
Companies must effectively manage their relationships with customers because
companies must satisfy customers' needs to achieve a competitive advantage
One constant improvement among smartphones of all brands is camera quality. As soon as Samsung, Google, or Apple introduces an updated phone, the others respond with equal or better quality in their next update. These competitive moves can be encompassed as the _____ of that market.
competitive dynamics
The ongoing set of competitive actions and competitive responses that occurs among firms as they maneuver for and advantageous market position is
competitive rivalry
Firms operating in the same market, offering similar products, and targeting similar customers are:
competitors
Which of the following represents a risk for companies pursuing a cost leadership strategy? a. Failure to provide crisp and identifiable differentiation to customers in the form of a firm's product b. Counterfeit versions of a company's products c. Pricing that is higher than customers' perceived value of a quality product d. Competitors' innovations resulting in their ability to drive costs lower
competitors' innovations resulting in their ability to drive costs lower
An oil company develops an innovative refining process that reduces the time required to produce gasoline by 25 percent. The company has identified its unique process as a core competency. Which of the following strategies would be most beneficial for the company to pursue?
cost leadership
A fast-food chain, Bob's Bigger Burgers, has just launched a campaign to market its new pound-and-a-half burger against its competitor, Lou's Burgers, who previously sold the biggest burger at a pound and a quarter. Bob's Bigger Burgers' strategic move against Lou's Burgers is a: a. competitive response. b. strategic response. c. tactical response. d. competitive action.
d
A popular TV network, QTV, wishes to gain a competitive advantage by managing several businesses from its corporate headquarters. Among its goals, QTV hopes to acquire its competitor, RTV, in the process. In this instance, QTV is using which type of strategy? a. Business-level strategy b. Network-level strategy c. Global-level strategy d. Corporate-level strategy
d
Apple quickly launches its next wave of innovative iPhones in order to keep up with competitors, such as Samsung and Microsoft. Imitation is rapid and inexpensive in the smartphone industry. Apple is a part of a _____ market. a. standard-cycle b. slow-cycle c. medium-cycle d. fast-cycle
d
As soon as United Parcel Service (UPS) moved into overnight delivery, FedEx's strong point, FedEx bought trucking and ground shipping assets to gain advantage over UPS's strong point. These activities between UPS and FedEx are referred to as: a. market power. b. economies of scope. c. vertical integration. d. multipoint competition.
d
Awareness affects the extent to which the firm understands the consequences of its: a. product quality. b. competitive rivalry and dynamics. c. competitive motivation and ability. d. competitive actions and responses.
d
Michelle opens a residential heating company dedicated to geothermal heating systems. She is pursuing a focused differentiation strategy, serving the needs of customers who are looking for environmentally friendly solutions to heat and cool their homes. Which of the following represents a risk to the company because Michelle is using a focus strategy rather than a broad strategy? a. Competitor residential heating and cooling companies offer mainstream options at lower prices. b. The cost of geothermal technology comes down and becomes more aligned with mainstream options, increasing the number of customers who consider geothermal options. c. New technology in the solar energy business is developed that makes efficient heating and cooling solutions based on power available to customers. d. As renewable energy continues to gain popularity, mainstream residential heating and cooling companies that are larger and have more resources decide to offer more geothermal options.
d
Rumor has it a new restaurant is coming to town called Italia Noodles. However, the owners are waiting to compare market commonalities and resource similarities to other local Italian restaurants. Italia Noodles is conducting a: a. tactical action plan. b. competitive action. c. strategic action. d. competitor analysis.
d
To be successful, a firm utilizing an integrated cost leadership/differentiation strategy must: a. focus exclusively on improving its competence in all value chain activities. b. focus exclusively on innovative product design. c. reduce the number of customer segments it is trying to serve. d. increase the number of primary value chain activities and support functions in which it becomes competent.
d
What is the distinction between value-neutral reasons and value-creating reasons for a firm to diversify? a. Value-neutral reasons seek to help the firm establish a more competitive position, whereas value-creating reasons seek to serve the managers of the firm. b. Value-neutral reasons seek to serve the managers of the firm, whereas value-creating reasons seek to help the firm establish a more competitive position. c. Value-neutral reasons seek to improve the firm overall, whereas value-creating reasons seek to help the firm establish a more competitive position. d. Value-neutral reasons seek to help the firm establish a more competitive position, whereas value-creating reasons seek to improve the firm overall.
d
Which of the following is a reason why firms with a low level of diversification are often able to earn positive returns? a. They develop capabilities that are useful across many markets. b. They can transfer knowledge across businesses. c. They are able to constantly adjust the mix in their portfolio to increase profits. d. They can provide superior customer service.
d
An industry-leading technology firm utilizing a differentiation strategy has decided to increase prices on its patented product to bolster profit margins and deliver a higher return to investors. Consider the impact of this decision in light of the forces of competition. Which of the following situations should the firm prioritize? a. Potential entrants b. Bargaining power of suppliers c. Bargaining power of buyers d. Rivalry with existing competitors
d.
Differentiation strategies are successful in addressing the competitive force of the bargaining power of suppliers because: a. the company is operating at such high volumes that it can leverage its buying position to receive lower prices. b. they prevent new companies from entering into the industry through economies of scale. c. brand loyalty is a byproduct of this strategy, leading customers to choose the company's product over its rivals' products. d. the higher margins of the firm can reduce the influence of increases in supplier costs.
d.
Which of the following strategies would be implemented to improve a company's richness in its customer relationships? a. a radio and billboard advertising campaign featuring a celebrity endorsing the company's product b. a customer loyalty program with multiple fine-print requirements c. a baby products sale announced through a mailed postcard to the company's entire database of customers d. satisfaction surveys following the arrival of a product
d. satisfaction surveys following the arrival of a product
As part of its selection of a business-level strategy, a firm will decide which customers it will serve, what needs those customers have that it will satisfy, and:
how it will satisfy those customers' needs using its core competencies to implement value-creating strategies
The number of markets with which a firm and a competitor are jointly involved and the degree of importance of the individual to each is referred to as:
market commonality
Southwest Airlines' decision to "perform activities differently" has allowed the organization to differentiate itself from competitors and make it a low-cost leader. Which of the following activities is NOT contributing to the firm's ability to fulfill the purpose of this business strategy? a. having short-haul, point-to-point routes between mid-sized cities and secondary airports b. maintaining low ticket prices c. training lean and productive ground and gate crews d. offering free in-flight meals
offering free in-flight meals
A firm that responds to the first over's competitive action, typically through imitation is called a:
second mover
Research indicates that a competitive advantage in logistics is a primary strategy that creates the most value for a cost leadership strategy. Which of the following value-creating activities should be a focus for a company pursuing a cost leadership strategy?
supply chain management
Which of the following is a market-based move that firms take to fine-tune a strategy?
tactical action