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

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Question 51

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

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 D)
F) C) and D)

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Question 52

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Outside the flight experience itself, airlines are generating revenue by charging fees for credit cards, frequent-flyer programs, and access to airport lounges. This serves to

A) increase competition.
B) expand the profit pool.
C) provide better customer service.
D) satisfy regulators.

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

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Question 53

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Once established, competitive advantages last forever whether the firm is in a high technology environment or not.

A low-cost position provides ________ flexibility to cope with demands from powerful suppliers for input cost increases.

An example of a firm applying the overall cost leadership generic strategy in a value-chain activity would be to automate the production assembly line to reduce scrappage from quality errors.

Caterpillar uses data analytics to differentiate itself from competitors by providing information services.

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

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:

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

What is a focus strategy? Provide an example where this has been implemented successfully.

Aldi, a discount supermarket retailer, has grown from its German base to the rest of Europe, Australia, and the United States by replicating a simple business format. Aldi limits the number of products in each category to ensure product turn, to ease stocking shelves, and to increase its power over supplier. This is an example of an overall cost leadership strategy because it

As markets mature,

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 customersandsuppliers.

A differentiation strategy enables a business to address the five competitive forces by

The factors that lead to a low-cost position also provide a substantial ________ barriers position with respect to ________ products introduced by new and existing competitors.

A need for turnaround occurs only during the maturity or declining stage of the life cycle.

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.

The primary aim of strategic management at the business level is

A firm can achieve differentiation through all the following means except

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.