Question 1

Even without differentiation parity,a firm pursuing a cost-leadership strategy can still gain a competitive advantage as long as its

Accepted Answer

A)   learning curve is not steeper than that of its competitors.
B)   per-unit costs are higher than that of its competitors.
C)   economic value creation exceeds that of its competitors.
D)   value gap is lower than that of its competitors.E) A) and B)
F) A) and C)

Question 2

A _____ primarily details the goal-directed actions managers take in their quest for competitive advantage when competing in a single product market.

Accepted Answer

A)   business-level strategy
B)   code of ethics
C)   mission statement
D)   functional-level strategyE) All of the above
F) None of the above

Question 3

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

Accepted Answer

A)   It is more able to absorb price increases through accepting lower profit margins.
B)   It is more able to absorb price increase 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) All of the above

Question 4

What does blue ocean strategy attempt to reconcile?

Accepted Answer

A)   the conflicting requirements of two generic strategies
B)   the conflicting requirements of two value drivers
C)   the conflicting requirements of two cost drivers
D)   the conflicting requirements of two or more unique strategiesE) A) and B)
F) A) and C)

Question 5

Whole Foods differentiates itself from competitors by offering top-quality foods obtained through sustainable agriculture.This business strategy implies that Whole Foods focuses on

Accepted Answer

A)   decreasing the existing value gap by providing luxury goods to customers.
B)   maintaining a less steeper learning curve as compared to its competitors.
C)   increasing the perceived value created for customers, which allows it to charge a premium price.
D)   lowering its costs compared to its competitors,' while offering adequate value for its products and services.E) B) and D)
F) A) and B)

Question 6

Which of the following drivers simultaneously increases value while lowering cost?

Accepted Answer

A)   economies of scale
B)   superior customer service
C)   availability of complements
D)   innovationE) B) and C)
F) A) and B)

Question 7

Which of the following is an accurate statement about learning effects?

Accepted Answer

A)   Learning effects involve the dilution of output over time.
B)   Learning effects involve the accumulation of output over time.
C)   Learning effects involve the increase of output at a point in time.
D)   Learning effects involve the decrease of output at a point in time.E) B) and C)
F) C) and D) B

Question 8

Handy Helper,Inc.produces decent-quality woodworking tools at a mid-range price.Master Tools,Inc.produces high-quality tools also at a mid-range price.Master Tools gained a competitive advantage because it has ______ than Handy Helper.

Accepted Answer

A)   higher economies of scope
B)   lower economies of scope
C)   a higher value gap
D)   a lower value gapE) A) and C)
F) A) and B)

Question 9

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) All of the above
F) A) and C)

Question 10

Which of the following is primarily a cost driver?

Accepted Answer

A)   product features
B)   customer service
C)   complements
D)   economies of scaleE) A) and B)
F) A) and C)

Question 11

Lush Roses is a chain of premium hotels around the globe that charges higher prices for its rooms and suites when compared to the average industry standards.Yet,the hotel enjoys the largest market share in the industry.This is mainly due its highly responsive staff that has a strong commitment toward achieving a 100 percent guest satisfaction.In this scenario,which of the following is the key value driver?

Accepted Answer

A)   superior customer service
B)   low cost of input factors
C)   availability of complements
D)   economies of scaleE) C) and D)
F) B) and C)

Question 12

Evia Cycles Inc.incurs $400 to manufacture a bicycle,and the maximum price customers are willing to pay is $550 per unit.Archer Cycles Inc.,its competitor,incurs $450 to manufacture a similar bicycle,and customers are willing to pay a maximum price of $620 for it.What does this indicate?

Accepted Answer

A)   Both Evia Cycles and Archer Cycles have achieved differentiation parity.
B)   Evia Cycles has a competitive advantage over Archer Cycles.
C)   Archer Cycles has created a greater economic value than Evia Cycles.
D)   Both Evia Cycles and Archer Cycles have achieved cost parity.E) A) and C)
F) A) and D)

Question 13

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) B) and C)

Question 14

Allure is a cosmetic brand that pursues a cost-leader strategy.Which of the following statements is true of the cosmetic brand?

Accepted Answer

A)   It appeals to the price-conscious buyers.
B)   Its primary value driver is product uniqueness.
C)   It charges a premium price for its products.
D)   It directly competes against luxury cosmetic brands that charge premium prices.E) B) and C)
F) A) and C)

Question 15

A blue ocean strategy tends to be successful only if a firm is able to rely on a _____ that allows it to reconcile trade-offs.

Accepted Answer

A)   value driver
B)   value innovation
C)   product feature
D)   product complementE) C) and D)
F) None of the above B

Question 16

Juanita Apparels Inc.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 apparel brand become a price leader in the industry.Which of the following is the key driver behind Juanita Apparel's strategic position?

Accepted Answer

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

Question 17

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

Accepted Answer

A)   stays level.
B)   zigzags.
C)   trends downward.
D)   trends upward.E) None of the above
F) A) and C)

Question 18

_____ is best described as decreases in cost per unit as output increases.

Accepted Answer

A)   Economies of scale
B)   Economies of scope
C)   Time compression economies
D)   Economies of replicationE) All of the above
F) B) and C)

Question 19

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

Accepted Answer

A)   cost driving.
B)   cost innovation.
C)   value driving.
D)   value innovation.E) A) and D)
F) A) and C)

Question 20

What is a value gap?

Accepted Answer

A)   real versus perceived value
B)   economic value creation
C)   lack of perceived value
D)   economic value differentiationE) A) and D)
F) A) and C)

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

Even without differentiation parity,a firm pursuing a cost-leadership strategy can still gain a competitive advantage as long as its

Correct Answer
verified

A _____ primarily details the goal-directed actions managers take in their quest for competitive advantage when competing in a single product market.

Correct Answer
verified

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

Correct Answer
verified

What does blue ocean strategy attempt to reconcile?

Correct Answer
verified

Whole Foods differentiates itself from competitors by offering top-quality foods obtained through sustainable agriculture.This business strategy implies that Whole Foods focuses on

Correct Answer
verified

Which of the following drivers simultaneously increases value while lowering cost?

Correct Answer
verified

Which of the following is an accurate statement about learning effects?

Correct Answer
verified
B

Handy Helper,Inc.produces decent-quality woodworking tools at a mid-range price.Master Tools,Inc.produces high-quality tools also at a mid-range price.Master Tools gained a competitive advantage because it has ______ than Handy Helper.

Correct Answer
verified

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

Correct Answer
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Which of the following is primarily a cost driver?

Correct Answer
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Correct Answer
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Evia Cycles Inc.incurs $400 to manufacture a bicycle,and the maximum price customers are willing to pay is $550 per unit.Archer Cycles Inc.,its competitor,incurs $450 to manufacture a similar bicycle,and customers are willing to pay a maximum price of $620 for it.What does this indicate?

Correct Answer
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Correct Answer
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Allure is a cosmetic brand that pursues a cost-leader strategy.Which of the following statements is true of the cosmetic brand?

Correct Answer
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A blue ocean strategy tends to be successful only if a firm is able to rely on a _____ that allows it to reconcile trade-offs.

Correct Answer
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B

Correct Answer
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D

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

Correct Answer
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_____ is best described as decreases in cost per unit as output increases.

Correct Answer
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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

Correct Answer
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What is a value gap?

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

Even without differentiation parity,a firm pursuing a cost-leadership strategy can still gain a competitive advantage as long as its

Correct AnswerverifiedShow Answer

A _____ primarily details the goal-directed actions managers take in their quest for competitive advantage when competing in a single product market.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What does blue ocean strategy attempt to reconcile?

Correct AnswerverifiedShow Answer

Whole Foods differentiates itself from competitors by offering top-quality foods obtained through sustainable agriculture.This business strategy implies that Whole Foods focuses on

Correct AnswerverifiedShow Answer

Which of the following drivers simultaneously increases value while lowering cost?

Correct AnswerverifiedShow Answer

Which of the following is an accurate statement about learning effects?

Correct AnswerverifiedB

Handy Helper,Inc.produces decent-quality woodworking tools at a mid-range price.Master Tools,Inc.produces high-quality tools also at a mid-range price.Master Tools gained a competitive advantage because it has ______ than Handy Helper.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is primarily a cost driver?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Evia Cycles Inc.incurs $400 to manufacture a bicycle,and the maximum price customers are willing to pay is $550 per unit.Archer Cycles Inc.,its competitor,incurs $450 to manufacture a similar bicycle,and customers are willing to pay a maximum price of $620 for it.What does this indicate?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Allure is a cosmetic brand that pursues a cost-leader strategy.Which of the following statements is true of the cosmetic brand?

Correct AnswerverifiedShow Answer

A blue ocean strategy tends to be successful only if a firm is able to rely on a _____ that allows it to reconcile trade-offs.

Correct AnswerverifiedB

Correct AnswerverifiedD

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

Correct AnswerverifiedShow Answer

_____ is best described as decreases in cost per unit as output increases.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What is a value gap?

Correct AnswerverifiedShow Answer

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B

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B

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D

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