Question 1

A firm can attain an overall cost leadership position by using automated technology to reduce scrappage rates.

Accepted Answer

A) True 
 B)False

Question 2

A business that strives for a low-cost advantage must attain a(n)  _______ cost advantage over rivals.

Accepted Answer

A)  relative
B)  evolutionary
C)  absolute
D)  potentialE) B) and C)
F) A) and D)

Question 3

If a car manufacturer focuses a lot on downstream activities such as warranty fulfillment and financing operations, but also considers the differentiation and cost of the cars themselves, the resulting strategy is likely to be a failed strategy.

Accepted Answer

A) True 
 B)False

Question 4

As markets mature,

Accepted Answer

A)  costs continue to increase.
B)  application for patents increase.
C)  differentiation opportunities increase.
D)  there is increasing emphasis on efficiency.E) B) and C)
F) A) and B)

Question 5

Outright sales or sale and leaseback free up considerable cash and improve returns. This is an example of which turnaround strategy used by successful companies?

Accepted Answer

A)  asset and cost surgery
B)  selective product and market pruning
C)  piecemeal productivity improvements
D)  global expansionE) All of the above
F) None of the above

Question 6

Global logistics firms such as DHL Supply Chain and Global Forwarding or C.H. Robinson Worldwide compete using an overall cost leadership strategy in primary activities such as

Accepted Answer

A)  effective layout of receiving dock operations.
B)  effective use of automated technology to reduce scrappage rates.
C)  minimize costs associated with employee turnover through effective policies.
D)  standardized accounting practices to minimize personnel required.E) B) and C)
F) None of the above

Question 7

An overall low-cost position protects a firm against rivalry from competitors, because higher costs allow a firm to earn returns even if its competitors eroded their profits through intense rivalry.

Accepted Answer

A) True 
 B)False

Question 8

Research shows that which one of the following is not a strategy used by firms engaged in successful turnarounds?

Accepted Answer

A)  asset and cost surgery
B)  selective product and market pruning
C)  piecemeal productivity improvements
D)  global expansionE) B) and D)
F) A) and B)

Question 9

Rapid changes in technology, globalization, and actions by rivals cannot erode company advantages.

Accepted Answer

A) True 
 B)False

Question 10

An overall low-cost position enables a firm to achieve ______ returns despite strong competition.

Accepted Answer

A)  below average
B)  average
C)  no
D)  above averageE) None of the above
F) A) and B)

Question 11

A low-cost position permits buyers to exert power to drive ____ prices only to the level of the next most efficient producer.

Accepted Answer

A)  up
B)  down
C)  increasing
D)  decreasingE) A) and C)
F) None of the above

Question 12

An overall low-cost position protects a firm against rivalry from competitors, because _________ allow a firm to earn returns even if its competitors eroded their profits through intense rivalry.

Accepted Answer

A)  higher costs
B)  higher prices
C)  lower costs
D)  lower pricesE) C) and D)
F) A) and D)

Question 13

Research has consistently shown that firms that achieve both cost leadership and differentiation advantages tend to perform

Accepted Answer

A)  at about the same level as firms that achieve either cost or differentiation advantages.
B)  higher than firms that achieve either a cost or a differentiation advantage.
C)  about the same as firms that are stuck-in-the-middle.
D)  lower than firms that achieve differentiation advantages but higher than firms that achieve cost advantages.E) A) and B)
F) A) and D)

Question 14

Mass customization enables manufacturers to be more responsive to customer demands for high quality products.

Accepted Answer

A) True 
 B)False

Question 15

A market that mainly competes on the basis of price and has stagnant growth is characteristic of what life cycle stage?

Accepted Answer

A)  introduction
B)  growth
C)  maturity
D)  declineE) All of the above
F) C) and D)

Question 16

In the __________ stage of the industry life cycle, there are few segments, the emphasis on process design is low, and the major functional areas of concern are general management and finance.

Accepted Answer

A)  introduction
B)  growth
C)  decline
D)  maturityE) All of the above
F) A) and B)

Question 17

Few turnarounds require firms to analyze both the external and internal environments relevant to their firm.

Accepted Answer

A) True 
 B)False

Question 18

An overall ______ position enables a firm to achieve above-average returns because it protects firms against powerful buyers.

Accepted Answer

A)  differentiation
B)  low-cost
C)  focused
D)  high-costE) B) and C)
F) None of the above

Question 19

Convincing rivals not to enter a price war, protection from customer pressure to lower prices, and the ability to better withstand cost increases from suppliers characterize which type of competitive strategy?

Accepted Answer

A)  differentiation
B)  overall low-cost leadership
C)  differentiation focus
D)  cost leadership focusE) None of the above
F) B) and C)

Question 20

Which of the following is not a potential pitfall of a differentiation strategy?

Accepted Answer

A)  Uniqueness that is not valuable.
B)  The price premium is too high.
C)  All rivals share a common input or raw material.
D)  Perceptions of differentiation may vary between buyers and sellers.E) A) and B)
F) B) and C)

Exam 5: Business-Level Strategy: Creating and Sustaining Competitive Advantages

If a car manufacturer focuses a lot on downstream activities such as warranty fulfillment and financing operations, but also considers the differentiation and cost of the cars themselves, the resulting strategy is likely to be a failed strategy.

Correct AnswerverifiedShow Answer

A business that strives for a low-cost advantage must attain a(n) _______ cost advantage over rivals.

Correct AnswerverifiedShow Answer

A low-cost position permits buyers to exert power to drive ____ prices only to the level of the next most efficient producer.

Correct AnswerverifiedShow Answer

Research shows that which one of the following is not a strategy used by firms engaged in successful turnarounds?

Correct AnswerverifiedShow Answer

Global logistics firms such as DHL Supply Chain and Global Forwarding or C.H. Robinson Worldwide compete using an overall cost leadership strategy in primary activities such as

Correct AnswerverifiedShow Answer

A market that mainly competes on the basis of price and has stagnant growth is characteristic of what life cycle stage?

Correct AnswerverifiedShow Answer

Research has consistently shown that firms that achieve both cost leadership and differentiation advantages tend to perform

Correct AnswerverifiedShow Answer

An overall ______ position enables a firm to achieve above-average returns because it protects firms against powerful buyers.

Correct AnswerverifiedShow Answer

Mass customization enables manufacturers to be more responsive to customer demands for high quality products.

Correct AnswerverifiedShow Answer

As markets mature,

Correct AnswerverifiedShow Answer

Few turnarounds require firms to analyze both the external and internal environments relevant to their firm.

Correct AnswerverifiedShow Answer

Convincing rivals not to enter a price war, protection from customer pressure to lower prices, and the ability to better withstand cost increases from suppliers characterize which type of competitive strategy?

Correct AnswerverifiedShow Answer

An overall low-cost position protects a firm against rivalry from competitors, because _________ allow a firm to earn returns even if its competitors eroded their profits through intense rivalry.

Correct AnswerverifiedShow Answer

Outright sales or sale and leaseback free up considerable cash and improve returns. This is an example of which turnaround strategy used by successful companies?

Correct AnswerverifiedShow Answer

An overall low-cost position enables a firm to achieve ______ returns despite strong competition.

Correct AnswerverifiedShow Answer

Rapid changes in technology, globalization, and actions by rivals cannot erode company advantages.

Correct AnswerverifiedShow Answer

In the __________ stage of the industry life cycle, there are few segments, the emphasis on process design is low, and the major functional areas of concern are general management and finance.

Correct AnswerverifiedShow Answer

An overall low-cost position protects a firm against rivalry from competitors, because higher costs allow a firm to earn returns even if its competitors eroded their profits through intense rivalry.

Correct AnswerverifiedShow Answer

Which of the following is not a potential pitfall of a differentiation strategy?

Correct AnswerverifiedShow Answer

A firm can attain an overall cost leadership position by using automated technology to reduce scrappage rates.

Correct AnswerverifiedShow Answer

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