Question 1

Fleet Foot Shoes has been successful at differentiating itself from competitors by claiming a premium price for its athletic footwear based on superior design and high-quality materials. In this scenario, which of the following is the key value driver?

Accepted Answer

A)   economies of scale
B)   low-cost input factors
C)   product features
D)   premium pricesE) A) and B)
F) B) and C)

Question 2

Body Sync Inc. is a chain of gyms. It offers a fitness package that allows its members to use the gym facilities for 12 months by paying only for 10 months. Included in the package are two health checkups and a gym kit. These add-ons by themselves are not very valuable, but as a package they can enhance the perceived value of the service offerings. In this case, Body Sync's primary value driver is

Accepted Answer

A)   economies of scale.
B)   learning-curve effects.
C)   availability of complements.
D)   experience-curve effects.E) All of the above
F) A) and B)

Question 3

Discuss product features as value drivers.

Accepted Answer

One of the obvious but most important le...

Question 4

Product features, customer service, and complements are all examples of important

Accepted Answer

A)   cost curves.
B)   cost drivers.
C)   value curves.
D)   value drivers.E) A) and D)
F) C) and D)

Question 5

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

Accepted Answer

A)   It combines the benefits of similar strategic positions-differentiation and low cost.
B)   It requires the reconciliation of fundamentally different strategic positions-differentiation and low cost.
C)   It requires the combination of fundamentally similar strategic positions-differentiation and strategic innovation.
D)   It requires the reconciliation of fundamentally different strategic positions-differentiation and strategic innovation.E) A) and B)
F) All of the above

Question 6

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?

Accepted Answer

A)   cost-leadership
B)   differentiation
C)   niche marketing
D)   product diversificationE) B) and D)
F) A) and C)

Question 7

When a firm operates at an output level of 9,000 units, the per-unit cost is $5. When the production is between 10,000-12,000 units, the per-unit cost is $4. At a production level of 13,000 units, the production cost is again $5 per unit. At 14,000 units and above, the production cost increases further. At what output level does the firm experience economies of scale?

Accepted Answer

A)   9,000 units
B)   11,000 units
C)   13,000 units
D)   15,000 unitsE) A) and B)
F) A) and C)

Question 8

Heartbeat Industries has recently introduced a new production method that will make the production of their medical devices more cost-effective. Which of the following will most likely be the result of this innovation?

Accepted Answer

A)   jumps to a steeper learning curve
B)   destabilizes a steeper learning curve
C)   stabilizes the existing learning curve
D)   moves down the existing learning curveE) B) and D)
F) B) and C)

Question 9

How is a cost-leader protected from threats from powerful suppliers?

Accepted Answer

A)   It is more able to absorb price increases through accepting lower profit margins.
B)   It is more able to absorb price increases through generating higher profit margins.
C)   It is able to create a significant difference between perceived value and current market prices.
D)   It is able to create a significant difference between actual value and future market prices.E) A) and B)
F) A) and C)

Question 10

Quick Clean Chemicals outsources its production to contract manufacturers located in underdeveloped nations where unskilled labor is available in plenty for very low wages. This has helped the company become a price leader in the chemicals industry. Which of the following is the key driver behind Quick Clean's strategic position?

Accepted Answer

A)   network effects
B)   superior customer service
C)   availability of complements
D)   low-cost input factorsE) A) and B)
F) A) and C) D

Question 11

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

Accepted Answer

A)   increasing cost and maintaining perceived customer benefits.
B)   lowering cost and maintaining perceived customer benefits.
C)   lowering cost and increasing perceived customer benefits.
D)   increasing cost and increasing perceived customer benefits.E) B) and C)
F) All of the above

Question 12

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?

Accepted Answer

A)   It failed to drive up the perceived customer value.
B)   It failed to refine its strategic position over time.
C)   It failed to move into a contested market space.
D)   It failed to offer enough strategic trade-offs.E) B) and D)
F) All of the above

Question 13

Airbase is a consumer electronics company known for its affordable mobile devices that follows a cost-leadership strategy. In this scenario, Airbase should ideally compare its strategic position with

Accepted Answer

A)   a company that sells small kitchen appliances at affordable prices.
B)   a consumer electronics company that sells high-end devices.
C)   a consumer electronics company popular among price-conscious customers.
D)   an online company that sells customized electronics accessories.E) All of the above
F) B) and C)

Question 14

Beach Grub is a chain of "fast casual" restaurants that sells its menu items at higher prices than its competitors. Yet, the restaurant has a large customer base due to its wide product portfolio and superior customer service. Which of the following generic business strategies has Beach Grub adopted in this scenario?

Accepted Answer

A)   cost-leadership
B)   differentiation
C)   market penetration
D)   product diversificationE) None of the above
F) A) and D)

Question 15

Differentiators tend to score highly on most competitive elements on a strategy canvas, while cost leaders tend to hover near the bottom of the strategy canvas.

Accepted Answer

A) True 
 B)False  True

Question 16

DiscountHaven Inc. is a large chain of hypermarkets. It has cost benefits due to its extensive operation. The company's marketing and sales, logistics, administrative, and other such related costs get divided between a large number of product units stocked in its stores. This makes it difficult for smaller retail stores and supermarkets to compete against DiscountHaven's low prices. Thus, DiscountHaven has a competitive advantage due to its

Accepted Answer

A)   superior customer service.
B)   time compression economies.
C)   economies of scale.
D)   learning-curve effects.E) B) and C)
F) A) and D)

Question 17

In a focused cost-leadership strategy, a firm

Accepted Answer

A)   caters to the segment of the market that is least cost-sensitive.
B)   provides high-priced products for many different segments of the mass market.
C)   delivers low-cost products and services to a specific, narrow part of the market.
D)   focuses on reducing the economic value created to drive down costs.E) None of the above
F) B) and C)

Question 18

According to the five forces model, which of the following is viewed as a major risk to a business pursuing a cost-leadership strategy?

Accepted Answer

A)   competition switching from non-price attributes to pricing
B)   innovation that allows competitors to emerge with more economical replacements
C)   new entrants with small production scale
D)   suppliers requesting a 2% price increase across the industryE) A) and C)
F) B) and D) B

Question 19

Explain blue ocean strategy with the help of an example.

Accepted Answer

Student examples will vary. A sample ans...

Question 20

Tangles Costume Jewelry offers slightly lower quality merchandise than competitors at a much lower price. What strategy is Tangles using?

Accepted Answer

A)   cost-leadership
B)   differentiation
C)   niche marketing
D)   product diversificationE) A) and C)
F) B) and C)

Exam 6: Business Strategy: Differentiation, Cost Leadership, and Blue Oceans

Fleet Foot Shoes has been successful at differentiating itself from competitors by claiming a premium price for its athletic footwear based on superior design and high-quality materials. In this scenario, which of the following is the key value driver?

Correct Answer
verified

Correct Answer
verified

Discuss product features as value drivers.

Correct Answer
verified
One of the obvious but most important le...
View Answer

Product features, customer service, and complements are all examples of important

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Heartbeat Industries has recently introduced a new production method that will make the production of their medical devices more cost-effective. Which of the following will most likely be the result of this innovation?

Correct Answer
verified

How is a cost-leader protected from threats from powerful suppliers?

Correct Answer
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Correct Answer
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D

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

Correct Answer
verified

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?

Correct Answer
verified

Airbase is a consumer electronics company known for its affordable mobile devices that follows a cost-leadership strategy. In this scenario, Airbase should ideally compare its strategic position with

Correct Answer
verified

Correct Answer
verified

Differentiators tend to score highly on most competitive elements on a strategy canvas, while cost leaders tend to hover near the bottom of the strategy canvas.

Correct Answer
verified
True

Correct Answer
verified

In a focused cost-leadership strategy, a firm

Correct Answer
verified

According to the five forces model, which of the following is viewed as a major risk to a business pursuing a cost-leadership strategy?

Correct Answer
verified
B

Explain blue ocean strategy with the help of an example.

Correct Answer
verified
Student examples will vary. A sample ans...
View Answer

Tangles Costume Jewelry offers slightly lower quality merchandise than competitors at a much lower price. What strategy is Tangles using?

Correct Answer
verified

Exam 6: Business Strategy: Differentiation, Cost Leadership, and Blue Oceans

Fleet Foot Shoes has been successful at differentiating itself from competitors by claiming a premium price for its athletic footwear based on superior design and high-quality materials. In this scenario, which of the following is the key value driver?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Discuss product features as value drivers.

Correct AnswerverifiedOne of the obvious but most important le...View AnswerShow Answer

Product features, customer service, and complements are all examples of important

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Heartbeat Industries has recently introduced a new production method that will make the production of their medical devices more cost-effective. Which of the following will most likely be the result of this innovation?

Correct AnswerverifiedShow Answer

How is a cost-leader protected from threats from powerful suppliers?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedD

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

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Airbase is a consumer electronics company known for its affordable mobile devices that follows a cost-leadership strategy. In this scenario, Airbase should ideally compare its strategic position with

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Differentiators tend to score highly on most competitive elements on a strategy canvas, while cost leaders tend to hover near the bottom of the strategy canvas.

Correct AnswerverifiedTrue

Correct AnswerverifiedShow Answer

In a focused cost-leadership strategy, a firm

Correct AnswerverifiedShow Answer

According to the five forces model, which of the following is viewed as a major risk to a business pursuing a cost-leadership strategy?

Correct AnswerverifiedB

Explain blue ocean strategy with the help of an example.

Correct AnswerverifiedStudent examples will vary. A sample ans...View AnswerShow Answer

Tangles Costume Jewelry offers slightly lower quality merchandise than competitors at a much lower price. What strategy is Tangles using?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
verified

Correct Answer
verified
One of the obvious but most important le...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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D

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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True

Correct Answer
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Correct Answer
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Correct Answer
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B

Correct Answer
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Student examples will vary. A sample ans...
View Answer

Correct Answer
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