Quiz 11 Blue ocean strategy

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.

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

blue ocean

A successfully implemented blue ocean strategy allows a firm to

charge a higher price than the cost-leader in the industry.

What does blue ocean strategy attempt to reconcile?

the conflicting requirements of two generic strategies

A value curve indicates a lack of effectiveness in a firm's strategic profile when it

zigzags.

Although JetBlue used a blue ocean strategy to achieve an initial competitive advantage, it failed to maintain this advantage. Which of the following provides the best reason for this development?

It failed to refine its strategic position over time.

PureRinse Inc. is a brand reputed for its wide variants of body wash that introduced its range of shampoos and skin moisturizers a few years ago. Since most of its products could be produced using the same resources and technology, the company's cost structure decreased, while its product portfolio widened. In this scenario, which of the following value and cost drivers is PureRinse applying?

economies of scope

Trader Joe's successfully uses a blue ocean strategy by offering lower cost food than Whole Foods for the same market of patrons. By doing this, Trader Joe's is able to

gain market share and make up the loss in margin through increased sales.

To initiate a strategic move that allows a firm to open up new and uncontested market space through value innovation, managers must address four key questions when formulating a blue ocean business strategy. These questions focus on

lowering cost and increasing perceived customer benefits.

DFS Electronics Inc. ensures that all its products are highly durable and reliable by using techniques like zero-defect and lean manufacturing systems. These efforts not only add to the products' differential appeal, but also help the company save costs during production and avoid expenses due to after-sales services. Thus, the common value and cost driver responsible for DFS Electronics' strategic position as an integrator is (the)

quality

A _____ is a graphical depiction of a company's relative performance vis-à-vis its competitors across the industry's key success factors.

strategy canvas

A key concern for a firm pursuing a blue ocean strategy should be to

offer a differentiated product or service at a low cost.

The pursuit of both differentiation and low cost at the same time in a way that creates a leap in value for both the firm and consumers is called

value innovation.