gbu 480 #2
Which of the following describes an airline that is most likely stuck in the middle?
Just Right Airline offers high-quality beverages and meals, plush airport lounges, only a few connections via hubs domestically, poor customer service, and low prices.
Product features, customer service, and complements are all examples of important:
value drivers.
Firms seek to create value from economies of scope through all of the following EXCEPT
de-integration
AccuroDisk Inc. manufactures external hard disks for $32 per unit, and the maximum price customers are willing to pay is $47 per unit. TD Storage Inc. is a competitor of AccuroDisk Inc. that produces external hard disks for $37 per unit, and customers are willing to pay a maximum price of $50 per unit. What does this imply?
AccuroDisk creates a greater economic value than TD Storage.
Describe the difference between corporate strategy and business strategy.
Corp - where to compete. Boundaries the firm in industry value chain, products and services, and geography. Bus - how to compete.
Blue Ocean Strategy
Creation of new marketsOpen up new demandSidestep competition making them irrelevantWin without fighting
In order to achieve a competitive advantage, the Coastal Haven Hotels, a chain of luxury beach resorts, wants to increase its market share. Which of the following strategies is most likely to do so?
Take advantage of economies of scale and scope by opening a chain of lower-priced economy hotels that leverage the Costal Haven brand image.
Which of the following examples uses a focused differentiation strategy?
a cosmetics brand that offers superior skin lotion for sensitive skin priced at 100 dollars per bottle
Related constrained diversification strategy
builds upon the related diversification strategy except the links between the diversified firms businesses are more direct. a firm shares resources and activities between its businesses (operational relatedness)
Business-level strategies are concerned specifically with:
creating differences between the firm's position and its competitors
Heirloom Furniture is a brand reputed for its wide variants of sofas that introduced a new range of mattresses and bed frames a few years ago. Since most of its products could be produced using the same resources and technology, the company's cost structure lowered, while its product portfolio widened. In this scenario, which of the following value and cost drivers is Heirloom applying?
economies of scope
Amazon.com has decided to enter the college bookstore market. The goal of "Amazon Campus" is to offer co-branded university-specific web sites that offer textbooks and paraphernalia, such as logo sweaters and baseball hats. This development shows Amazon's relentless pursuit of
product diversification
A strategy of ________ will be most beneficial for a firm to enhance its overall corporate performance.
related linked diversification
When a blue ocean strategy goes bad, a firm has neither a clear differentiation nor a clear cost-leadership profile. This situation is referred to as
stuck in the middle
A firm that decides to stop purchasing components from suppliers and start producing them in-house is pursuing backward vertical integration.
true
Both Bison Autos and Sparrow Inc. incur a cost of $9,000 to manufacture a vehicle. However, the economic value created by Sparrow Inc. is more than that created by Bison Autos. What does this indicate?
Sparrow Inc. can charge a premium price on its automobiles.
Firms that pursue extremely high or extremely low levels of diversification perform better than those that pursue moderate levels of diversification.
false
When a firm operates at the minimum efficient scale, there is still opportunity for it to further reduce its cost per unit through economies of scale.
false
When pursuing a Blue Ocean strategy, a firm in a crowded marketplace attempts to out-compete rivals on both cost and product features with the goal of gaining market share at the expense of other competitors in the same industry.
false
Zara has pioneered "cheap chic" in clothing apparel. Zara offers current and desirable fashion goods at relatively low prices. To implement the strategy, Zara uses sophisticated designers and effective means of managing costs. These are all characteristics of which business level strategy?
integrated cost leadership/differentiation
Related linked diversification strategy
is where the firm with a portfolio of businesses have only a few links between them. share fewer resources and core competencies between them then related constrained firms. involves corporate relatedness
Thomas is the owner of a landscaping company that caters to a very wealthy clientele. His company has struggled to differentiate itself from the other high-end landscapers in the area, but because he has hired several expensive but highly-qualified team members, Thomas is unable to shift to a cost leadership strategy. Which strategy is most likely to achieve a competitive advantage?
narrow the scope of competition and focus on unique features such as the use of organic materials
Beagle Autos is known for its affordable and reliable brand of consumer vehicles. Because its shareholders expect to see an improved rate of growth in the coming years, Beagle's executives have decided to diversify the company's range of products so that at least 40 percent of the firm's revenue is generated by new business units. However, the company's resources, capabilities, and competencies are limited to producing other forms of motorized vehicles, such as motorcycles and all-terrain vehicles (ATVs). Which type of corporate diversification strategy should Beagle pursue?
related constrained
GE was diversified and manages businesses that have only a few links between them. This corporate-level strategy is best described as ________ diversification.
related linked
When executives of a firm consider business opportunities only where they can leverage their existing competencies and resources, it can be concluded that the firm is using
related-constrained diversification.