MGT 439

In gaining a cost advantage over competitors, a low-cost provider must offer

services and features that buyers think are essential.

How do companies with a focused, low-cost strategy strive to secure a competitive advantage?

serving niche market customers at a lower cost than rivals

What factor is necessary for the success of a generic strategy?

skillful execution of the strategy

What must a best-cost provider do to remain competitive?

Offer consumers a more attractive value proposition.

Companies can increase customer satisfaction by incorporating such tangible features as

improved functions. updated styling. more appealing product specifications.

In a market where buyer preferences are diverse, how can industry rivals differentiate their products?

Offer products that appeal to specific buyers.

Which methods help a company use cost drivers effectively?

capturing all available economies of scale operating facilities at full capacity improving supply chain efficiency

What mistakes do companies often make while implementing a differentiation strategy?

charging too high a price for differentiated products offering too many product features and options

What pitfalls should low-cost providers avoid?

fixating on cost reduction to the exclusion of product features relying on a cost-reduction approach that is easy to copy

Which of the following are types of competitive strategies?

focused low-cost broad differentiation broad low-cost

Companies can create differentiation by investing in human resource management activities that

improve the skills of company employees.

Best-cost providers differ from low-cost providers by

offering attractive features at a lower cost than competitors.

A differentiation strategy might fail in which situations?

when consumers see little value in the unique features of a product when products and services can be quickly imitated

Which of the following are good opportunities for a company to pursue a low-cost provider strategy?

when consumers use a product offered by rival companies in the same way when rivals offer virtually identical products when price competition among competitors is vigorous

A company that develops a strong relationship with its suppliers is more likely to have its supply needs prioritized

when industry supply is insufficient to meet overall demand.

Which news networks have differentiated themselves by their ability to devote extensive airtime to major news events?

CNN Fox News

Differentiation strategies are best created and developed within marketing and advertising departments.

F

Which situations make it more likely that a focused differentiation strategy will be successful?

Few rivals attempt to specialize in the same niche. The industry has many different niches. Industry leaders choose not to compete in the niche.

Coordinating with retailers allows a company to do which of the following?

Fill orders more accurately. Enhance the buying experience. Improve the company's image.

Which companies have a well-defined market niche?

Fox News Channel (cable television journalism) Tesla Motors (electric cars) Blue Nile (online jewelry)

Which company employs the differentiation strategies of wide selection and one-stop shopping?

Home Depot

What can a company do to make its products more economical for customers?

Increase product reliability. Incorporate energy-efficient features.

In terms of a company strategy based on differentiation, what are the risks of offering mostly insignificant improvements in quality or service?

Lower company profits decreased customer loyalty

Which companies employ a focused low-cost strategy?

Motel 6 Sleep-Inn Super 8

Which companies are noted for their successful use of low-cost provider strategies?

Walmart Uber Bic

A factor that has a strong influence on a company's costs is called

a cost driver.

Best-cost provider strategies are intended to provide value-conscious buyers with

a quality product at a relatively low price.

How does Nucor Corporation produce steel at a far lower cost than traditional steel mills?

a smaller workforce lower operating costs a lower capital investment

A company's competitive strategy is an effort to do which of the following?

achieve competitive advantage ward off competitors please customers

A company that employs a best-cost strategy achieves profitability by

adding premium features to its products at a lower cost than rivals.

Companies can create a differentiation-based competitive advantage by incorporating intangible features such as

appealing to buyer desires for prestige.

Companies can provide superior customer value by offering products with features that

are cheaper for a consumer to use.

What can a business use to reduce production costs for a cost-advantage strategy?

automatic robotic technology computer-assisted design (CAD)

How can marketing help create differentiation?

by increasing the perceived value of a product

A company with a value chain system that sells directly consumers is able to

bypass the costs of distributors.

Large companies often employ multibrand strategies to better compete with

companies that employ a focused differentiation strategy.

To create competitive advantage for a company, a differentiation strategy must

match the resources of the company.

What can companies reduce by positioning themselves near their suppliers?

materials handling shipping costs

Improving customer service or adding extra services are ways to manage the value chain to create product

differentiation

Hotels differentiate their services by offering

dining in the hotel. an extensive range of guest amenities. larger rooms.

A low-cost provider strategy is risky if a competitor

discovers a lower-cost value approach

Nucor Corporation eliminates many steps in the steel manufacturing process by using what equipment?

electric arc furnaces

Companies can reduce costs associated with a value chain system by

eliminating unnecessary steps.

Developing a strong company culture is one way to

encourage continuous improvement from employees. increase workforce productivity.

One of the most effective ways to manage a value chain efficiently is to

find innovative ways to keep costs down.

In terms of differentiation strategy, fast-paced technological change and quickly evolving product features can

increase buyer interest help companies set themselves apart with different products

Successful differentiation strategies allow companies to

increase unit sales. cultivate buyer loyalty.

Differentiation strategies can increase a company's profitability if

increased sales are more than enough to cover the costs of differentiation. product prices can be raised sufficiently.

If a low-cost provider has invested heavily in its current means of operating,

it will be expensive for the provider to shift to a new technology.

Whole Foods Market employs a focused differentiation-based strategy by offering what products?

locally grown foods organic, minimally processed foods high standards for food quality

What are the three approaches that companies can use to gain a competitive advantage?

low-cost best-cost differentiation

A low-cost provider can use low prices to

persuade potential customers to switch brands.

Attempts to use low-cost advantage to attack rival companies with lower product prices can result in which of the following?

reduced profits retaliatory price cuts a price war among several rivals

Online systems and advanced software can help a company achieve operating efficiency by

reducing parts inventories. cutting production times.

Although successful low-cost providers continually look for ways to save money, they also understand the importance of spending money on

resources that further eliminate costs.

Companies that pursue a focused differentiation strategy are at risk from

rivals with more brands or great expertise and capabilities.

What components must be favorable before a generic strategy can succeed?

the company's internal situation the competitive context positioning

A company that employs a focused differentiation strategy may experience intense competition if

the market segment becomes too attractive.

Signaling product value as a differentiation strategy is especially important when

the nature of the differentiation is based on intangible features.

To succeed with a low-cost provider strategy, what must a company have?

the resources to keep costs lower than its rivals

Differentiation strategies fail when which of the following occur?

when buyers don't value a product or brand's uniqueness when competitors match a company's differentiation strategy

What option do companies have for translating a low-cost advantage into profit performance?

underpricing competitors

The potential for the preferences of a niche market to change can present a problem for companies that employ a

focused strategy.

Which strategies are recommended for enhancing differentiation based on value drivers?

Pursue quality improvement. Strive to achieve technological advances. Create product features that appeal to a wide range of buyers.

If a company's efforts to differentiate its products are met with consumer disinterest, the company puts itself at risk for lower profits.

T

Focused low-cost strategies are common for companies that produce what?

generic goods that imitate name-brand products

As part of a differentiation strategy, what signals tell customers that the company's products have superior value?

higher-quality sales materials ads emphasizing a product's notable attributes more appealing packaging than competing products

To enhance customer value and revamp the value chain system, companies can coordinate with partners, such as

dealers distributors

In the management of value chain activities, what would most likely increase worker productivity?

offering incentives

Which of the following is a typical course of action for companies that pursue low-cost leadership?

offering lower prices than their rivals

A particular differentiation strategy has a better chance of succeeding when

there are few rival companies using the same approach.

Companies use differentiation strategies when consumers' preferences are

too diverse for a standardized product offering.

Red Bull and Listerine employ a differentiation strategy centered on

unique taste.

To achieve a cost advantage in a market niche, companies must

use cost drivers to keep production costs low. omit nonessential steps.

The most systematic approach to achieving differentiation is to focus on

value drivers.

Best-cost providers target which consumer groups?

value-conscious buyers

Focusing on a single market niche is an attractive strategy for what type of firm?

small companies that lack the resources to pursue a broader customer base

Revamping the value chain by coordinating with suppliers can be expected to

speed delivery to end customers. speed up new product development cycles.

A company that employs a best-cost provider strategy is vulnerable to which of the following?

companies that employ a high-end differentiation strategy companies that employ a low-cost strategy

Focused strategies differ from low-cost provider and differentiation strategies by

concentrating attention on a market niche.

Which of the following allow a company to sell directly to customers effectively?

conducting sales through a company website maintaining a direct sales staff

Switching to a lower-cost item to save money is an example of

cost-efficient management.

Low-cost providers need to be especially careful not to make the mistake of

cutting prices too aggressively.

To increase the number of flights per day, Southwest Airlines

decreased turnaround time at the gates.

To reduce costs, Southwest Airlines does not offer which amenities?

first-class service baggage transfer between airlines assigned seating

A company that pursues a focused strategy must have the resources to

satisfy the needs of its niche market.

Which company offers premium products and services to upscale buyers?

Rolls-Royce