MAN4720 Chapter 4

Which of the following must a company remember when pursuing a cost leadership strategy? Buyers will be reluctant to pay for a product unless the quality is acceptable. Buyers will be reluctant to pay for a product unless the quality is superior. Buyers will be reluctant to pay for the product unless it is customized. Product quality is more important in a broad market than in a narrow one.

Buyers will be reluctant to pay for a product unless the quality is acceptable.

Which of the following is NOT a competitive risk of a cost leadership strategy? Competitors sometimes learn how to successfully imitate a cost leaders strategy Competition becomes more advanced as additional firms adopt a cost leadership strategy Too much focus on cost reductions may occur The process used by a cost leader to produce its goods can become obsolete

Competition becomes more advanced as additional firms adopt a cost leadership strategy

Which of the following is not a business level strategy? Cost leadership Differentiation Competitive dynamics Focused differentiation Integrated cost leadership/differentiation

Competitive dynamics

From a strategic perspective, a basic need of all customers is to buy products that do what? Fulfill a need that is often times indescribable Create a euphoric condition Fulfill their own strategic desires Create value for them

Create value for them

Cost leadership strategy has numerous activities associated with it. Which of the following are the support functions that go along with the cost leadership strategy? Supply chain management, bargaining power of buyers, and potential entrants Finance, human resources, and management information systems Operations, supply chain management, and distribution Marketing (including sales), follow-up service, and product evaluation

Finance, human resources, and management information systems

Which of the following involves engaging in primary value chain activities and support functions that allow the firm to simultaneously pursue low-cost and differentiation? Focused cost leadership strategy Focused differentiation strategy Integrated cost leadership/differentiation strategy There is no strategy outlined in the textbook that fulfills this definition

Integrated cost leadership/differentiation strategy

When selecting a business level strategy, firms evaluate two types of potential competitive advantage which of the following do they utilize? Production cost and a cost leadership strategy Bargaining power of buyers and competitive risks of cost leadership strategy Lower cost than rivals or the ability to differentiate and command a premium price that exceeds the extra cost of doing so Competitive risk of the differentiation strategy and the rivalry that exists among their existing competitors

Lower cost than rivals or the ability to differentiate and command a premium price that exceeds the extra cost of doing so

Which of the following is a process used to cluster people with similar needs into individual and identifiable groups? Market segmentation Differentiation strategy Focus group segmentation TQM

Market segmentation

When faced possible substitutes the cost leader has which of the following? More flexibility than its competitors Less flexibility than its competitors Because they are using a cost leadership strategy there are few substitute products A challenge to increase, only slightly, prices the substitute product has affected

More flexibility than its competitors

Research suggest that having a competitive advantage in logistics creates which of the following when used with a cost leadership strategy rather than a differentiation strategy? Logistics is not a consideration when examining cost leadership versus differentiation Having a competitive advantage does not affect one strategy more than the other Less value More value

More value

Social networking sites such as MySpace and Facebook utilize which of the dimensions of relationships? Richness Reach Affiliation Richness, reach, and affiliation

Reach

Amazon has built capabilities around Internet technology and e-commerce to facilitate information exchanges with its customers in a cost-effective manner. This represents which of the following service dimension? Reach Richness Affiliation None of the these is correct.

Richness

A cost leadership strategy provides goods or services with features that are: acceptable. unique substandard. mediocre.

acceptable.

The three dimensions of a firm's relationships with customers include all the following EXCEPT: exclusiveness. affiliation. richness. reach.

exclusiveness.

The focused differentiation strategy differs from the differentiation strategy in that: the focused differentiators have a broader competitive scope. the value-creating activities of focused differentiators are more constrained. focused differentiators target a narrower customer market. there are fewer risks with the focused differentiation strategy.

focused differentiators target a narrower customer market.

The __________ dimension of relationships with customers is particularly important for social networking sites such as Facebook and MySpace. reach richness affiliation social

reach

A firm's core strategy is its __________ strategy. corporate-level business-level pricing international

business-level

One of the following dimensions of a firm's relationships is concerned with the depth and detail of a two-way flow of information between the customer and the firm, which is it? Richness Reach Affiliation Both reach and affiliation

Richness

Which of the following are examples of approaches to differentiation? Unusual features, responsive customer service and performance Rapid product innovation, technological leadership, perceived prestige and status Different tastes All of the answers given in this question are examples of approaches to differentiation

All of the answers given in this question are examples of approaches to differentiation

Which of the following business level strategies consider rivalry with existing competitors, the bargaining power of buyers, the bargaining power of suppliers, and potential entrants before creating the final strategy? Cost leadership strategy and differentiation strategy Differentiation strategy Focus strategy Cost leadership strategy

Cost leadership strategy and differentiation strategy

Firms must be able to produce products at competitive costs to reduce upward pressure on the price that customers pay in products produced at noncompetitive cost the price for the product may exceed what the firm's target customers are willing to pay. Which strategy does this statement pertain to? Differentiation Cost leadership Focus All of the strategies are dependent upon this strategic stance

Differentiation

What does FMS stand for as used in this chapter? Functional movement system Financial management system Flexible manufacturing system Foreign multinational system

Flexible manufacturing system

Which of the following is an integrated set of actions taken to produce goods or services that serve the needs of a particular competitive segment? Focus Differentiation Cost leadership Both differentiation and focus

Focus

The five strategies examined in chapter 4 are referred to as what since they can be used in any organization, competing in any industry? Focused Differentiated Generic Strategic diffused

Generic

Hills Pet Company sells food products for pets. Their mission is to help enrich and lengthen the special relationship but between people and their pets. This company targets the needs of different segments of human customers with the food products it sells for animals. They are following which the following tactics? Market segmentation Market diversification Demographic segmentation Consumption patterns

Market segmentation

By linking companies with their suppliers, distributors, and customers, __________ provide a company with flexibility. flexible manufacturing systems information networks total quality management systems capabilities

information networks

The products or services that are differentiated from others have qualities that are: perceived by the customer to add value that they will pay a premium to purchase. valued by the typical industry customer. perceived as standardized by the customer. seen as classic attributes rather than passing fads.

perceived by the customer to add value that they will pay a premium to purchase.

All of the following are considered generic business-level strategies EXCEPT: product diversification. cost leadership. focused differentiation. integrated cost leadership/differentiation.

product diversification.

When implementing a focus strategy, the firm seeks to: offer products that are both differentiated and low cost. move into the global market. target the typical customer in an industry. serve the specialized needs of a market segment.

serve the specialized needs of a market segment.

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: the selection of industries in which the firm will compete. specific product markets. primary value-chain activities. particular geographic locations.

specific product markets.