Question 1

Given the attractiveness of premium pricing during the growth stage of the market life cycle,managers should emphasize short-term results to increase profits.

Accepted Answer

A) True 
 B)False

Question 2

Marlin Steel Wire Products is a manufacturer of commodity wire products out of Baltimore,MD.Marlin has many rivals based in China and other emerging markets.The company cannot compete on labor costs so it used a ________ strategy to automate its production and now specializes in high-end products.

Accepted Answer

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

Question 3

Zulily protects itself from buyer power and intense rivalry from competitors by

Accepted Answer

A)  increasing the bargaining power of its customers.
B)  paying close attention to costs.
C)  increasing costs.
D)  increasing the buyer power.E) None of the above
F) C) and D)

Question 4

Two-sided or platform markets are an emerging trend according to the textbook authors.Choose an example of an existing platform market and explain how this firm positions itself to become the dominant player linking suppliers and customers.

Accepted Answer

Successful platform firms create a busin...

Question 5

A firm can achieve differentiation through all the following means except

Accepted Answer

A)  improving brand image.
B)  offering lower prices to frequent customers.
C)  better customer service.
D)  adding additional product features.E) None of the above
F) A) and B)

Question 6

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

Question 7

Piecemeal productivity improvements during a turnaround typically do not involve

Accepted Answer

A)  business process reengineering.
B)  increased capacity utilization.
C)  benchmarking.
D)  expansion of company product market scope.E) B) and D)
F) A) and D)

Question 8

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) None of the above
F) B) and C)

Question 9

Most turnarounds require a firm to carefully analyze its relevant environments.The ________ analysis leads to identification of market segments or customer groups that may still find the product attractive.

Accepted Answer

A)  external
B)  internal
C)  global
D)  environmentalE) B) and D)
F) A) and B)

Question 10

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 C)

Question 11

Which of the following is not a reason for the possible erosion of company competitive advantage?

Accepted Answer

A)  rapid change in technology
B)  globalization
C)  actions by rivals from within and outside of the industry
D)  company commitment to innovationE) B) and C)
F) A) and B) D

Question 12

With experience,unit costs of production decline as ________ increases in most industries.

Accepted Answer

A)  costs
B)  volume
C)  output
D)  priceE) A) and D)
F) A) and C)

Question 13

A ________ can be defined as the total profits in an industry at all points along the industry value chain.

Accepted Answer

A)  profit maximizer
B)  revenue enhancer
C)  profit pool
D)  profit outsourcingE) A) and B)
F) C) and D)

Question 14

Which of the following is a risk (or potential pitfall) of cost leadership?

Accepted Answer

A)  Cost cutting in one area of the value chain might increase costs in another.
B)  Attempts to stay ahead of the competition may lead to gold plating.
C)  Cost differences increase as the market matures.
D)  Producers are more able to withstand increases in supplier costs.E) A) and B)
F) A) and C) A

Question 15

Combination strategies,such as integrating overall low cost and differentiation,makes it easier for rivals to duplicate or imitate because it is harder for the primary firm to provide value.

Accepted Answer

A) True 
 B)False

Question 16

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) A) and B)
F) A) and C)

Question 17

In the ________ stage of the industry life cycle,there are many segments,competition is very intense,and the emphasis on process design is high.

Accepted Answer

A)  growth
B)  introduction
C)  decline
D)  maturityE) A) and C)
F) None of the above

Question 18

Underestimating expenses associated with coordinating value-creating activities in the extended value chain can be a result of ________ integration of cost leadership and differentiation.

Accepted Answer

A)  good
B)  poor
C)  intentional
D)  structuredE) All of the above
F) A) and B)

Question 19

BlackBerry lost its competitive advantage by 2016 because it

Accepted Answer

A)  did not deliver innovations to respond to changing market demand.
B)  developed a highly performant just-in-time delivery system.
C)  did not reward its employees.
D)  let suppliers have dominant power.E) A) and B)
F) B) and D)

Question 20

The five-forces model suggests that with intense competition an overall low-cost position will not enable a firm to achieve above-average returns.

Accepted Answer

A) True 
 B)False

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

Given the attractiveness of premium pricing during the growth stage of the market life cycle,managers should emphasize short-term results to increase profits.

Correct AnswerverifiedShow Answer

Marlin Steel Wire Products is a manufacturer of commodity wire products out of Baltimore,MD.Marlin has many rivals based in China and other emerging markets.The company cannot compete on labor costs so it used a ________ strategy to automate its production and now specializes in high-end products.

Correct AnswerverifiedShow Answer

Zulily protects itself from buyer power and intense rivalry from competitors by

Correct AnswerverifiedShow Answer

Two-sided or platform markets are an emerging trend according to the textbook authors.Choose an example of an existing platform market and explain how this firm positions itself to become the dominant player linking suppliers and customers.

Correct AnswerverifiedSuccessful platform firms create a busin...View AnswerShow Answer

A firm can achieve differentiation through all the following means except

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 AnswerverifiedC

Piecemeal productivity improvements during a turnaround typically do not involve

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

Most turnarounds require a firm to carefully analyze its relevant environments.The ________ analysis leads to identification of market segments or customer groups that may still find the product attractive.

Correct AnswerverifiedShow Answer

As markets mature,

Correct AnswerverifiedShow Answer

Which of the following is not a reason for the possible erosion of company competitive advantage?

Correct AnswerverifiedD

With experience,unit costs of production decline as ________ increases in most industries.

Correct AnswerverifiedShow Answer

A ________ can be defined as the total profits in an industry at all points along the industry value chain.

Correct AnswerverifiedShow Answer

Which of the following is a risk (or potential pitfall) of cost leadership?

Correct AnswerverifiedA

Combination strategies,such as integrating overall low cost and differentiation,makes it easier for rivals to duplicate or imitate because it is harder for the primary firm to provide value.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the ________ stage of the industry life cycle,there are many segments,competition is very intense,and the emphasis on process design is high.

Correct AnswerverifiedShow Answer

Underestimating expenses associated with coordinating value-creating activities in the extended value chain can be a result of ________ integration of cost leadership and differentiation.

Correct AnswerverifiedShow Answer

BlackBerry lost its competitive advantage by 2016 because it

Correct AnswerverifiedShow Answer

The five-forces model suggests that with intense competition an overall low-cost position will not enable a firm to achieve above-average returns.

Correct AnswerverifiedShow Answer

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Successful platform firms create a busin...
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C

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D

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A

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