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

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Question 51

Multiple Choice

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The primary aim of strategic management at the business level is

A) maximizing risk to return trade-offs through diversification.
B) maximizing differentiation of products and/or services.
C) achieving competitive advantage.
D) achieving a low-cost position.

E) A) and B)
F) C) and D)

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Question 52

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Porsche has enhanced power over buyers because its strong reputation makes buyers more willing to pay a premium price.This ________ rivalry,since buyers become ________ price-sensitive.

A) increases;more
B) lessens;more
C) lessens;less
D) increases;less

E) C) and D)
F) A) and C)

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Question 53

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Piecemeal productivity improvements can be used by a mature business in need of a turnaround.

A risk for a firm that tries to attain both cost and differentiation advantages is that it can be stuck in the middle.An example of this is supermarkets because their ________ structure is ________ than discount retailers,and customers do not value their products and services as being high-end such as those offered by Whole Foods.

Discuss how each stage of the industry life cycle (introduction,growth,maturity,and decline)can play a role in decisions that managers must make at the business level.Provide an example for each stage.

The most likely time to pursue a harvest strategy is in a situation of

Ryanair and Spirit Airlines depend upon revenue from services not related to the actual flight.These services increase their

Atlas Door tightly controlled logistics so that it always shipped only fully complete orders to construction sites.In regard to the five forces model,which of the following is a reason this might give them competitive advantage?

Proctor and Gamble announced that it would sell off or close down up to 100 of its brands.This is an example of which turnaround strategy used by successful companies?

At one CVS drugstore,a four-pack of Energizer AA batteries was on sale at 2.99 USD compared with a Duracell four-pack at 4.59 USD.The Duracell market share dropped 2 percent in a recent two-year period,and its profits declined over 30 percent.Why did this happen?

Hardware chains such as Ace and True Value are losing market share to rivals such as Lowe's and Home Depot in spite of them using a focus strategy.Why?

In the ________ stage of the industry life cycle,the emphasis on product design is very high,the intensity of competition is low,and the market growth rate is low.

Many firms have achieved success by integrating activities throughout the extended value chain by using ________ to link their own value chain with the value chains of their customers and suppliers.

A firm can differentiate itself in a support activity by purchasing high-quality components to enhance product image such as Apple does with its laptop computers.

A manufacturing business pursuing cost leadership is likely to

Primark,a fashion retailer,has found a way to keep its cost structure lower than its rivals by leveraging streamlined logistics,a low marketing budget,and negotiating bargain prices from its suppliers.They are using a(n) ________ strategy.

Early pioneer in online education,University of Phoenix,has faced increasing challenges from traditional university online programs who are able to offer their programs at the same cost.This is an example of which generic strategy gone wrong:

What are the pitfalls of the overall cost leadership strategy? Provide an example for each pitfall and explain why it is a pitfall.

Primark,an Irish clothing retailer,uses an overall cost leadership strategy.This could fail if it

The growth stage of the industry life cycle is characterized by