In which of the following ways can a company make its products more economical for buyers?

A ketchup manufacturer convinces a supplier who makes vinegar to set up a nearby plant. Which of the following benefits will the ketchup manufacturer be least assured of?

improved overall quality control

Which of the following would NOT lead to cost savings?

A company that sources the best from suppliers across the world

While there are many routes to competitive advantage, the two biggest factors that distinguish one competitive strategy from another are:

whether a company's target market is broad or narrow and whether the company is pursuing a low cost or differentiation strategy.

Whatever strategic approach is adopted by a company to deliver value, it nearly always requires:

performing value chain activities differently than rivals and building competitively valuable resources and capabilities that rivals cannot readily match.

The biggest and most important differences among the competitive strategies of different companies boil down to:

whether a company's market target is broad or narrow and whether the company is pursuing a competitive advantage linked to low cost or differentiation.

An automotive manufacturer sells a limited number of high-end, custom-built cars, using technologically advanced power systems. What strategy is the manufacturer using to gain competitive advantage?

A focused differentiation strategy

The generic types of competitive strategies include:

low-cost provider, broad differentiation, best-cost provider, focused low-cost, and focused differentiation strategies.

Which of the following generic types of competitive strategies is typically the "best" strategy for a company to employ?

A strategy that is customized to fit the macro-environment and industry and employs resources and capabilities that rivals have trouble duplicating

A low-cost leader's basis for competitive advantage is:

meaningful lower overall costs than rivals on comparable products.

Low-cost leaders who have the lowest industry costs are likely to:

have out managed rivals in finding ways to perform value chain activities more cost-effectively.

How valuable a low-cost leader's cost advantage is depends on:

whether it is easy or inexpensive for rivals to copy the low-cost leader's methods or otherwise match its low costs.

A low-cost leader can translate its low-cost advantage over rivals into superior profit performance by:

maintaining the present price, and using the lower-cost edge to earn a higher profit margin on each unit sold.

Domino's Pizza has a well-known slogan: "We'll deliver in 30 minutes or less, or it's free!" With it what has the pizza maker achieved?

Built a unique customer value proposition

The major avenues for achieving a cost advantage over rivals include: 

a. performing value chain activities more cost-effectively than rivals or revamping the firm's overall value chain to eliminate or bypass some cost-producing activities. 

Achieving a sure cost advantage over rivals entails:

selling a mostly standard product and increasing the scale of operation.

A fast-food restaurant stocks bread, meat, sauces, and other main ingredients, but does not assemble and cook its burgers and sandwiches until a customer places an order. Which cost driver is the restaurant efficiently using to cut costs?

Supply chain efficiencies

Which of the following is NOT an action that a company should take to perform value chain activities more cost-effectively?

Over-differentiating so that product features exceed the needs of most buyers

Cost-efficient management of a company's overall value chain activities requires that management:

ferret out cost-saving opportunities in every part of the value chain.

Which of the following is NOT one of the ways that a company can achieve cost-efficient management of its value chain activities?

Striving to ensure a corporate diversity policy is introduced with effective controls

The culture of a company can be a cost-efficient value chain activity because it can:

spur worker pride in productivity and continuous improvement.

Which of the following is NOT one of the ways that a company that a non-capital-intensive can achieve a cost advantage by revamping its value chain?

Increasing production capacity and then striving hard to operate at full capacity

An example of how companies can revamp their value chain to reduce costs is to:

have suppliers locate their plants close to companies' own facilities.

Which of the following companies is using cost drivers effectively to manage value chain activities cost efficiently?

Company B uses just-in-time inventories and produces made-to-order products as and when customer demand rises.

A potato chip manufacturer purchases a potato farm. Which of the following regarding its strategy is true?

The manufacturer has effectively used vertical integration to increase its bargaining position and reduce transaction costs.

A competitive strategy of striving to be the low-cost provider is particularly attractive when:

most buyers use the product in much the same ways, with user requirements calling for a standardized product.

Being the overall low-cost provider in an industry has the attractive advantage of:

putting a firm in the best position to win the business of price-sensitive customers and earn profits by setting the floor on market price.

A competitive strategy to be the low-cost provider in an industry works well when:

industry newcomers use introductory low prices to attract buyers and build a customer base.

A competitive strategy predicated on low-cost leadership tends to work best when:

price competition among rivals is especially vigorous and the offerings of rival firms are essentially identical, standardized, commodity-like products.

In which of the following circumstances is a strategy to be the industry's overall low-cost provider NOT particularly well-matched to the market situation?

When buyers have widely varying needs and special requirements, and the prices of substitute products are relatively high

A strategy to be the industry's overall low-cost provider tends to be more appealing than a differentiation or best-cost or focus/market niche strategy when:

the offerings of rival firms are essentially identical, standardized, commodity-like products.

Which of the following is NOT one of the pitfalls of a low-cost provider strategy?

Setting the industry's price ceiling to capture volume gains and achieve economies of scale

A low-cost provider's product does NOT have to always:

suggest strong rather than weak product differentiation.

The essence of a broad differentiation strategy is to:

offer unique product attributes in ways that are valuable and appealing and that buyers consider worth paying for.

A company attempting to be successful with a broad differentiation strategy has to:

study buyer needs and behavior carefully to learn what buyers consider important, what they think has value, and what they are willing to pay for.

Successful broad differentiation allows a firm to:

command a premium price for its product, and/or increase unit sales, and/or gain buyer loyalty to its brand.

Which of the following is NOT true of a company that succeeds in differentiating its product offering from those of its rivals? It attracts mainly price-conscious buyers.

It attracts mainly price-conscious buyers.

A broad differentiation strategy improves profitability when:

the higher price the product commands exceeds the added costs of achieving the differentiation.

Whether a broad differentiation strategy ends up enhancing a company's profitability depends mainly on whether:

most buyers accept the customer value proposition as unique and the product can produce sufficient unit sales to cover the costs of achieving the differentiation.

Opportunities to differentiate a company's product offering:

can exist in activities all along an industry's value chain.

A set of factors (analogous to cost drivers) that are particularly effective in having a strong differentiation effect

Which of the following is NOT one of the ways managers can enhance differentiation based on value drivers?

Seeking out low-quality inputs

Brands create customer loyalty, which in turn:

increases the perceived cost of switching to another product.

Pursuing continuous quality improvement as a uniqueness factor is sound because it:

can often reduce product defects and improve economy of use.

Approaches to enhancing differentiation through changes in the value chain do NOT include:

coordinating with employees to create a greater incentive systems to encourage worker productivity

The objective of differentiation is to:

offer customers something rivals can't, at least in terms of the level of satisfaction.

A route to take in developing a differentiation advantage includes:

incorporating tangible features that add functionality, increase customer satisfaction with the product specifications, functions, and styling.

An organic foods manufacturer insists on portraying the cleanliness of its farms in its advertisements, charges a higher price for its products, and sells its products only through reputable distributors. What strategy is the manufacturer using to deliver superior value to customers?

Signaling the value of the company's product offering to buyers

A differentiation-based competitive advantage:

often hinges on incorporating features that raise the performance of the product or lower the buyer's overall costs of using the company's product, or enhances buyer satisfaction in intangible or noneconomic ways, or delivers value to customers by differentiating on the basis of competencies and capabilities that rivals can't match.

Which of the following is NOT one of the four basic routes to achieving a differentiation-based competitive advantage?

Appealing to buyers who are sophisticated and shop hard for the best, stand-out differentiating attributes

Perceived value and signaling value are often an important part of a successful differentiation strategy because:

buyers seldom will pay for value they don't perceive, no matter how real the value of the differentiating extras may be.

Achieving a differentiation-based competitive advantage does NOT involve:

appealing to buyers on the basis of attributes that rivals are emphasizing

Broad differentiation strategies are well-suited for market circumstances where:

there are many ways to differentiate the product or service that have value to buyers.

Broad differentiation strategies generally work best in market circumstances where:

buyer needs and uses of a product are diverse and not fully satisfied by a standardized product.

A broad differentiation strategy works best in situations where:

technological change is fast-paced and competition revolves around rapidly evolving product features.

A broad differentiation strategy generally produces the best results in situations where:

few rival firms are following a similar differentiation approach.

In which of the following market circumstances is a broad differentiation strategy generally NOT well-suited?

When the products of rivals are weakly differentiated

A pitfall to avoid in pursuing a differentiation strategy is:

trying to differentiate on the basis of attributes or features that are easily and quickly copied.

Which of the following is NOT one of the pitfalls of pursuing a differentiation strategy?

Over-emphasizing efforts to strongly differentiate the company's product from those of rivals rather than being content with weak product differentiation

Focused strategies keyed either to low cost or differentiation are especially appropriate for situations where:

the market is composed of distinctly different buyer groups who have different needs or use the product in different ways.

What sets focused (or market niche) strategies apart from low-cost leadership and broad differentiation strategies is:

their concentrated attention on serving the needs of buyers in a narrow piece of the overall market.

A focused low-cost strategy seeks to achieve competitive advantage by:

serving buyers in a narrow piece of the total market (target market niche) at a lower cost and lower price than rivals.

The chief difference between a low-cost provider strategy and a focused low-cost strategy is:

the size of the buyer group that a company is trying to appeal to.

A focused low-cost strategy can lead to attractive competitive advantage when:

a firm can lower costs significantly by limiting its customer base to a well-defined buyer segment.

A focused differentiation strategy aims at securing competitive advantage by:

offering a product carefully designed to appeal to the unique preferences and needs of a narrow, well-defined group of buyers.

A drink manufacturer finds setting up a plant to make its own bottle caps expensive and technically difficult. Which of the following will be most helpful in solving the manufacturer's problem?

A government oil company is having trouble with the private refineries and transporters to whom it delegates important stages of production. It decides to become more active along the entire supply chain from locating deposits to retailing the fuel to consumers. Which of the following does it intend to achieve?

The risks of a focused strategy based on either low-cost or differentiation include the:

potential for the preferences and needs of niche members to shift over time toward product attributes desired by buyers in the mainstream portion of the market.

Focusing carries several risks, one of which is the:

chance that competitors will find effective ways to match the focused firm's capabilities in serving the target market.

Best-cost provider strategies are those that:

are a hybrid of low-cost provider and differentiation strategies that aim at providing desired attributes while beating rivals on price.

To profitably employ a best-cost provider strategy, a company must have the resources and capabilities to:

incorporate attractive or upscale attributes into its product offering at a lower cost than rivals.

A firm pursuing a best-cost provider strategy:

seeks to deliver superior value to buyers by satisfying their expectations on key attributes and beating rivals in meeting customer expectations on price.

The objective of a best-cost provider strategy is to:

deliver superior value to value-conscious buyers at a comparatively lower price than rivals.

The competitive objective of a best-cost provider strategy is to:

meet or exceed buyer expectations on key quality/performance/features/service attributes and beat their expectations on price (given what rivals are charging for much the same attributes).

What is the primary target market for a best cost-provider?

The competitive advantage of a best-cost provider is:

its capability to incorporate upscale or attractive attributes into its product offering at lower costs than rivals. Definition

For a best-cost provider strategy to be successful, a company must have:

resource strengths and competitive capabilities that allow it to incorporate upscale attributes at lower costs than rivals whose products have similar upscale attributes. Definition

The target market of a best-cost provider is:

Best-cost provider strategies are appealing in those market situations where:

diverse buyer preferences make product differentiation the norm and where a large number of value-conscious buyers can be induced to purchase mid-range products.

The big danger or risk of a best-cost provider strategy is:

that rivals with low-cost provider strategies will be able to steal away some customers on the basis of a lower price, and high-end differentiators will be able to steal away customers with the appeal of better product attributes.

A company's biggest vulnerability in employing a best-cost provider strategy is:

getting squeezed between the strategies of firms employing low-cost provider strategies and high-end differentiation strategies.

Success with a best-cost provider strategy designed to outcompete high-end differentiators requires:

achieving significantly lower costs in providing the upscale features.

Each of the five generic strategies positions the company differently, EXCEPT when it concerns:

having resources and capabilities that rivals have trouble duplicating.

The production emphasis of a company pursuing a broad differentiation strategy usually involves:

emphasis on building differentiating features that buyers are willing to pay for and includes wide selection and many product variations.

The marketing emphasis of a company pursuing a broad differentiation strategy usually is to:

tout differentiating features and charge a premium price that more than covers the extra costs of differentiating features.

The keys to maintaining a broad differentiation strategy are to:

stress constant innovation to stay ahead of imitative rivals and to concentrate on a few differentiating features.

The marketing emphasis of a company pursuing a focused low-cost provider strategy usually is to:

communicate the attractive features of a budget-priced product offering that fits niche members' expectations.

The underlying criteria of a best-cost provider strategy usually is found in the ability of a company to:

offer better goods at attractive prices.

A production-based emphasis toward a low-cost provider strategy usually requires a company to strive for:

continuous cost reductions without sacrificing acceptable quality and essential features.

Each of the following is likely to help a company's low-cost provider strategy succeed EXCEPT:

capabilities to simultaneously deliver lower cost and higher-quality/differentiated features.

Sometimes it makes sense for a company to go on the offensive to improve its market position and business performance. The best offensives tend to incorporate the following EXCEPT:

using a strategic offense to allow the company to leverage its weaknesses to strengthen operating vulnerabilities.

Once a company has decided to employ a particular generic competitive strategy, then it must make the following additional strategic choices, EXCEPT whether to:

pay special attention to buyer segments that a rival is already serving.

Which of the following is NOT a strategic choice that a company must make to complement and supplement its choice of one of the five generic competitive strategies?

Whether to employ a market share leadership strategy

Strategic offensives should, as a general rule, be based on:

exploiting a company's strongest competitive assets—its most valuable resources and capabilities.

The principal offensive strategy options include all of the following EXCEPT:

initiating a market threat and counterattack simultaneously to effect a distraction.

Which of the following is NOT a principal offensive strategy option?

Being the final competitor to market a next-generation product so as to guarantee the product is operationally sound

An offensive to yield good results can be short if:

buyers respond immediately (to a dramatic cost-based price cut or imaginative ad campaign).

Which of the following rivals make the best targets for an offensive attack?

Firms with weaknesses in areas where the challenger is strong

Challenging a struggling rival can do all of the following EXCEPT:

strengthen the rival's loyal following.

involves abandoning efforts to beat out competitors in existing markets and instead invent a new industry or new market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand.

Which of the following is NOT an example of a company that uses blue-ocean market strategy?

Walmart's logistics and distribution

All firms are subject to offensive challenges from rivals. Which of the following is NOT among the intent of the best defensive move?

Harm the firm's competitive position

Which of the following is NOT a purpose of a defensive strategy?

To increase the risk of having to defend an attack

Which of the following ways are employed by defending companies to fend off a competitive attack?

Gain product line exclusivity to force competitors to use other distributors.

What is the goal of signaling a challenger that strong retaliation is likely in the event of an attack?

To dissuade challengers from attacking or diverting them into using less threatening options

Which of the following signals would NOT warn challengers that strong retaliation is likely?

Announcing strong quarterly earnings potential to financial analysts

Being first to initiate a particular strategic move can have a high payoff in all of the following EXCEPT when:

market uncertainties make it difficult to ascertain what will eventually succeed.

In which of the following instances is being a first-mover NOT particularly advantageous?

When markets are slow to accept the innovative product offering of a first-mover, and fast followers possess sufficient resources and marketing muscle to overtake a first mover Definition

First-mover disadvantages (or late-mover advantages) rarely ever arise when:

the market response is strong and the pioneer gains a monopoly position that enables it to recover its investment.

In which of the following cases are late-mover advantages (or first-mover disadvantages) NOT likely to arise?

When opportunities exist for a blue-ocean strategy to invent a new industry or distinctive market segment that creates altogether new demand

Because when to make a strategic move can be just as important as what move to make, a company's best option with respect to timing is:

to carefully weigh the first-mover advantages against the first-mover disadvantages and act accordingly.

The race among rivals for industry leadership is more likely to be a marathon rather than a sprint when:

the market depends on the development of complementary products or services that are currently not available, buyers have high switching costs, and influential rivals are in position to derail the efforts of a first-mover.

For every emerging opportunity there exists:

a market penetration curve, and this typically has an inflection point where the business model falls into place.

Any company that seeks competitive advantage by being a first-mover must ask several hard questions prior to executing its strategy. Which question would it NOT ask?

Did the company pour too many resources into getting ahead of the market opportunity?

What does the scope of the firm refer to?

The range of activities the firm performs internally and the breadth of its product offerings, the extent of its geographic market, and its mix of businesses

The range of product and service segments that the firm serves within its market is known as the firm's:

The extent to which a firm's internal activities encompass one, some, many, or all of the activities that make up an industry's entire value chain system is known as:

The difference between a merger and an acquisition is that:

a merger is the combining of two or more companies into a single corporate entity, whereas an acquisition involves one company (the acquirer) purchasing and absorbing the operations of another company (the acquired).

The difference between a merger and an acquisition relates to:

the details of ownership, management control, and the financial arrangements.

Which of the following is NOT a typical strategic objective or benefit that drives mergers and acquisitions?

To facilitate a company's shift from a broad differentiation strategy to a focused differentiation strategy

Mergers and acquisitions are often driven by such strategic objectives as:

expanding a company's geographic coverage or extending its business into new product categories.

Merger and acquisition strategies:

may offer considerable cost-saving opportunities and can also be beneficial in helping a company try to invent a new industry.

Which of the following is NOT among the intended outcomes of horizontal merger and acquisition strategies?

Suppressing a rival's breakthroughs in management or technology

Mergers and acquisitions: Term

frequently do not produce the hoped-for outcomes.

A primary reason for why mergers and acquisitions sometimes fail is due to the:

misinterpretation of the cultural differences, like employee disenchantment and low morale, differences in management styles and operating procedures, and operations integration decision mistakes.

Vertical integration strategies:

extend a company's competitive scope within the same industry by expanding its operations across multiple segments or stages of the industry value chain.

The best reason for investing company resources in vertical integration (either forward or backward) is to:

add materially to a company's technological capabilities, strengthen the company's competitive position, and/or boost its profitability.

A good example of vertical integration is a:

crude oil refiner purchasing a firm engaged in drilling and exploring for oil.

A vertical integration strategy can expand the firm's range of activities:

backward into sources of supply and/or forward toward end users.

When firms are involved in a mix of in-house and outsourced activity in any given stage of the vertical chain, it is called:

For backward vertical integration into the business of suppliers to be a viable and profitable strategy, a company:

must be able to achieve the same scale economies as outside suppliers and match or beat suppliers' production efficiency with no drop-off in quality.

Vertical integration can lower costs by:

facilitating the coordination of production flows and avoiding bottlenecks.

Which of the following is NOT a potential advantage of backward vertical integration?

Reduced business risk because of controlling a bigger portion of the overall industry value chain

Backward vertical integration can produce a:

differentiation-based competitive advantage when activities enhance the performance of the final product.

The strategic impetus for forward vertical integration is to:

gain better access to end users and better market visibility.

Which of the following is typically the strategic impetus for forward vertical integration?

Gaining better access to end users and better market visibility

Which of the following is NOT a strategic disadvantage of vertical integration?

Vertical integration reduces the opportunity for achieving greater product differentiation.

Bypassing regular wholesale/retail channels in favor of direct sales and Internet retailing can have appeal if it:

reinforces the brand, enhances consumer satisfaction, and results in lower prices to end users.

A strategy of vertical integration can have substantial drawbacks, including:

the environmental costs of coordinating operations across vertical chain activities.

A strategy of vertical integration can have both important strengths and weaknesses depending on all of the following, EXCEPT:

whether competitors outsource any of their value chain activities.

involves farming out certain value chain activities presently performed in-house to outside vendors.

The two big drivers of outsourcing are:

that outsiders can often perform certain activities better or more cheaply, and outsourcing allows a firm to focus its entire energies on those activities that are at the center of its expertise (its core competencies).

Outsourcing the performance of value chain activities presently performed in-house to outside vendors and suppliers makes strategic sense EXCEPT when:

it restricts a company's ability to assemble diverse kinds of expertise speedily and efficiently.

Which of the following is NOT one of the benefits of outsourcing value chain activities presently performed in-house?

Enables a company to gain better access to end users and better market visibility

Relying on outsiders to perform certain value chain activities offers such strategic advantages as:

reducing the company's risk exposure to changing technology and/or changing buyer preferences.

Outsourcing strategies can offer such advantages as:

obtaining higher quality and/or cheaper components or services, improving a company's ability to innovate, and reducing its risk exposure.

The big risk of employing an outsourcing strategy is:

hollowing out a firm's own capabilities and losing touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success.

collaborative formal arrangements where two or more companies join forces and agree to work cooperatively toward some strategically relevant objective.

Which of the following is defined as a formal agreement between two or more separate companies in which they agree to work cooperatively toward some common objective?

Which of the following is NOT a factor that makes an alliance "strategic" as opposed to just a convenient business arrangement?

The alliance helps the company obtain additional financing on better credit terms.

The formation of a new corporation, jointly owned by two or more companies agreeing to share in the revenues, expenses, and control, is known as:

What can a company do to make its products more economical for customers?

What are the three approaches that companies can use to gain a competitive advantage choose every correct answer?

Which strategy lets a company maintain an advantage by being less expensive than its competitors?

Which of the following is a strategy that focuses the company's efforts on seeking efficiencies and reducing costs?