HSP 480 Chapter 6

In a successful ________ strategy, the trade-offs between differentiation and low cost are reconciled.

blue ocean

A ________ primarily details the goal-directed actions managers take in their quest for competitive advantage when competing in a single product market.

Business-level strategy

The primary goal of a firm pursuing a blue ocean strategy should be to

Combine successfully difff and low cost - new product, increased economic value

Firms pursuing a differentiation strategy primarily seek to

Create higher value for customers than the value that competitors create, delivering products/services with unique features while keeping costs at the same or similar levels, allowing the firm to charge higher prices to its customers

A company that uses a differentiation strategy can achieve a competitive advantage as long as its

Created value doesn't cost most than product

Home Smart Inc. is a chain of supermarkets that sells its products at higher prices than its competitors. Yet, the supermarket chain has a large customer base due to its wide product portfolio and superior customer service. Which of the following generic business strategies has Home Smart adopted in this scenario?

Differentiated

Organic Eats is a restaurant that caters to the needs of a small percentage of highly health-conscious consumers. It has an all-organic, vegan menu. Since there are very few restaurants that offer the same unique services, customers are willing to pay a premium price for its products and services. In this scenario, Organic Eats is following a

Focused differentiation strategy

Diseconomies of scale refer to

Increases in cost per unit when output increases

Which of the following is a firm effect that has an impact on the competitive advantage of a firm?

Value position relative to competitors; cost position relative to competitors

Which of the following best explains why a blue ocean strategy is difficult to implement?

combining two different things - differ and low cost

Bargain Styles Inc. is an apparel company that caters to the highly price-conscious customers. Through its simple apparel designs, acceptable quality levels, and minimal customer service, the company has been able to sell its merchandise at the lowest prices in the industry. Which of the following generic business strategies is Bargain Styles applying?

cost leadership

A firm experiences ________ when there are increases in cost per unit as output increases.

diseconomies of scale

________ is best described as decreases in cost per unit as output increases.

economies of scale

A blue ocean strategy differs from a low-cost strategy in that

goal not to be lowest cost but increase perceived value

When a blue ocean strategy goes bad, a firm has neither a clear differentiation nor a clear cost-leadership profile. This situation is refer red to as

stuck in the middle