MGT 491 Ch. 6 LS

A struggling retailer seeking to implement a blue ocean strategy is likely to experience difficulty with ______. cutting costs and increasing value at the same time communicating the plan to lower-level employees maintaining high quality customer service locating products that satisfy customer needs

cutting costs and increasing value at the same time

Why does the learning curve go down when productivity is considered? As workers repeatedly engage in an activity, they become more efficient, driving down costs. A large number of people can learn at the same time, leading to economies of scale. Learning cuts into the amount of time workers have, resulting in decreased productivity. The challenge of learning is an uphill battle, leading to decreases in worker morale.

As workers repeatedly engage in an activity, they become more efficient, driving down costs.

Business-level strategy addresses which overarching question? How should we compete? What should we sell? What should we produce? How should we treat our employees?

How should we compete?

Which capability is required to create superior product features? marketing sales accounting R&D

R&D

In terms of productivity, which of the following is true of learning curves? They go down. They remain level. They go up. They are volatile.

They go down.

True or false: A company that achieves differentiation parity at a lower cost has implemented a successful cost-leadership strategy. True False

True

Why do many firms fail to successfully implement a blue ocean strategy? because too many other companies already try to implement a blue ocean strategy, making it hard to compete that way because they end up being "stuck in the middle," unable to increase value and lower costs at the same time because they become involved in situations involving ethical dilemmas because they merge with international competitors for value creation

because they end up being "stuck in the middle," unable to increase value and lower costs at the same time

A company's goal-directed plans regarding how to compete for advantage is known as the firm's ______. industry effects sustainable competitive advantage blue ocean strategy business-level strategy

business-level strategy

Unique features and attributes that differentiate a product from competitors' offerings allow the firm to ______. hire employees away from competitor reduce the cost of raw materials charge only as much as the competition charges for its product charge premium pricing

charge premium pricing

A tablet manufacturer that includes a free stylus with every purchase is using ______ to enhance users' experiences and increase the perceived value of its tablets. complements customer service product features differentiation

complements

Bundling of products and services that are consumed in tandem to create value is an example of ______. economies of scope premium pricing complements strategic trade-offs

complements

A ______ strategy requires achieving the lowest costs in the industry while maintaining a level of value that is acceptable to customers. proposition minimally efficient differentiation cost-leadership

cost-leadership

Which of the following are considered the two generic business-level strategies? (Check all that apply.) cost-leadership value gap differentiation oligopoly monopolistic competition

cost-leadership differentiation

Economies of scale are ______. decreases in cost per unit as output increases increases in minimum efficiencies of scale increases in cost-leadership business level strategy decreases in economic value due to competitive parity

decreases in cost per unit as output increases

Patti's Potato Chips is a national potato-chip manufacturer. Calpurnia's Crisps is a small-batch gourmet potato-chip maker. Based on just this information, which of the following is the greatest advantage Patti's has over Calpurnia's? customer service product features economies of scale complements

economies of scale

The concept of a(n) ______ attempts to combine both learning effects and process improvements. strategic implementation technological innovation minimum efficient scale experience curve

experience curve

Which of the following are input factors? (Check all that apply.) labor raw materials capital marketing and sales information technology services distribution

labor raw materials capital information technology services distribution

Which of the following are components of a cost-leadership strategy? (Check all that apply.) lowest costs in the industry highest prices in the industry unique product features acceptable value

lowest costs in the industry acceptable value

Products in the affordable "business-casual" clothing market have largely become commoditized, and most retailers have begun to compete mainly on price rather than product features. In this environment, it is impossible for one retailer to gain market share without another losing it. This is an example of a ______ ocean. red black green blue

red

Which type of strategy is being used if a company offers a product at a lower cost than its competitors? cost-leadership strategy focused differentiation strategy blue ocean strategy differentiation strategy

cost-leadership strategy

What is one of the benefits of pursuing a differentiation strategy when it comes to the power of suppliers? Differentiation results in costs that increase above acceptable thresholds. Differentiation provides protection against an increase in input prices. Differentiation provides protection against substitute products by lowering prices. Differentiation results in the erosion of margins.

Differentiation provides protection against an increase in input prices.

Which two of the following variables can managers primarily manipulate in order to answer the question, "How should we compete?" price cost style value size

cost value

What is one of the benefits of pursuing a differentiation strategy when it comes to the power of suppliers? Differentiation results in costs that increase above acceptable thresholds. Differentiation provides protection against substitute products by lowering prices. Differentiation provides protection against an increase in input prices. Differentiation results in the erosion of margins.

Differentiation provides protection against an increase in input prices.

Which of the following best defines economies of scope? They are the savings that come from producing two or more outputs at less cost than producing each output individually. They are the sizes of the markets in which a firm chooses to compete. They are the strategies that seek to create higher value for customers than the value that competitors create. They are the choices between a cost or value position.

They are the savings that come from producing two or more outputs at less cost than producing each output individually.

If two firms produce very similar products at the same rate of output, and firm A is able to achieve lower per-unit costs than firm B by taking advantage of a new manufacturing technology, firm A is benefiting from creative destruction. a learning curve effect based on output differential. an experience-curve effect based on process innovation. value driver advantages based on product features.

an experience-curve effect based on process innovation.

The Ritz-Carlton provides a personalized customer experience based on sophisticated analysis of data gathered about each guest. This focus on ______ allows the hotel to increase its perceived value. product features good value customer service marketing

customer service

A(n) ______ strategy attempts to increase the perceived value of a product while controlling costs. cost-leadership competitive implementation differentiation integrated balanced approach

differentiation

A successful blue ocean strategy requires strategists to reconcile the trade-offs between ______. differentiation and cost-leadership profit margins and sales volume number of employees and high wages private and public investment

differentiation and cost-leadership

An auto manufacturer that has access to cheaper labor and raw materials than its rivals will have a competitive advantage regarding lower cost of ______ factors. learning-curve scaling experience-curve input

input

A producer of consumer headphones that successfully differentiates its products with a patented noise-canceling technology and celebrity endorsements will enjoy which of the following benefits? (Check all that apply.) reduced per unit costs an increased exposure to the threat of price wars less intense competition from imitators the ability to charge a premium price

less intense competition from imitators the ability to charge a premium price

Which of the following are examples of ways that a large retailing firm can increase the perceived value of its offerings by focusing on customer service? (Check all that apply.) offering a "no questions asked" return policy by utilizing set scripts for customer service representatives to use with all customers offering an improved version of a product at the same price maintaining a domestic call center that is open 24 hours per day

offering a "no questions asked" return policy maintaining a domestic call center that is open 24 hours per day

Which competitive forces can result in erosion of margins for both differentiation and cost-leadership business strategies? threat of substitutes power of buyers power of suppliers threat of entry

power of buyers power of suppliers threat of entry

A cost leader can achieve a competitive advantage by ______. allowing people to customize their products choosing a differentiation strategy focusing on reducing cost without considering the effect on value ignoring diseconomies of scale reducing costs below those of competitors while maintaining a similar value

reducing costs below those of competitors while maintaining a similar value

A manufacturer of electronic components can use its manufacturing machines to produce many different components such as semiconductors, sensors, and capacitors. In this case, the firm benefits from an economy of ___________ , reducing overall production costs by finding multiple uses for its components and facilities.

scope

The perceived value that a company creates for consumers less the company's costs to create the value equals ______. a differentiation strategy industry attractiveness a strategic trade-off the economic value created

the economic value created

A firm that manages to avoid competition entirely by offering a product or service that creates an uncontested market space is engaging in ______. a red ocean strategy value innovation cost leadership economies of scale

value innovation

Implementing a blue ocean strategy requires making competition irrelevant and creating a new market space, otherwise known as ______. economies of scope value innovation asset attainment market definition

value innovation