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

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Question 1

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

Select one:

  1. matching corporate identity with the corporate culture in order to integrate effort and build sales momentum.
  2. performing value chain activities differently than rivals and building competitively valuable resources and capabilities that rivals cannot readily match. 

There are two ways to gain a competitive edge over rivals: either perform value chain activities more effectively than rivals or revamp the firm’s overall value chain to eliminate or bypass some cost-producing activities.

  1. constant efforts to thwart entry of new rivals and their attempts to create differentiated products with unit costs above price premium.
  2. the identification of strengths and weaknesses within the company.
  3. that management undertake formal planning sessions with functional departments to ensure productivity improvement.

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There are two ways to gain a competitive edge over rivals: either perform value chain activities more effectively than rivals or revamp the firm’s overall value chain to eliminate or bypass some cost-producing activities.

There are two ways to gain a competitive edge over rivals: either perform value chain activities more effectively than rivals or revamp the firm’s overall value chain to eliminate or bypass some cost-producing activities.

The correct answer is: performing value chain activities differently than rivals and building competitively valuable resources and capabilities that rivals cannot readily match.

Question 2

 

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

Select one:

  1. Becoming too fixated on cost reduction
  2. Overly aggressive price-cutting
  3. Having the basis for the firm’s cost advantage undermined by cost-saving technological breakthroughs that can be readily adopted by rival firms
  4. Relying on an approach to reduce costs that can be easily copied
  5. Setting the industry’s price ceiling to capture volume gains and achieve economies of scale

Setting the industry’s price ceiling to capture volume gains and achieve economies of scale is a cost cutting method to optimally lower unit costs and increase production to gain profits.

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Setting the industry’s price ceiling to capture volume gains and achieve economies of scale is a cost cutting method to optimally lower unit costs and increase production to gain profits.

Setting the industry’s price ceiling to capture volume gains and achieve economies of scale is a cost cutting method to optimally lower unit costs and increase production to gain profits.

The correct answer is: Setting the industry’s price ceiling to capture volume gains and achieve economies of scale

Question 3

 

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

Select one:

  1. do a better job than rivals of adopting the best operating practices.
  2. provide buyers with the best attributes at the best cost.
  3. have the best cost (as compared to rivals) for each activity in the industry’s value chain.
  4. sell a product with the best cost at the best price.
  5. incorporate attractive or upscale attributes into its product offering at a lower cost than rivals.

Best-cost strategies create competitive advantage by giving buyers more value for the money—delivering superior quality, features, performance, and/or service attributes while also beating customer expectations on price. To profitably employ a best-cost provider strategy, a company must have the capability to incorporate attractive or upscale attributes at a lower cost than rivals.

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Best-cost strategies create competitive advantage by giving buyers more value for the money—delivering superior quality, features, performance, and/or service attributes while also beating customer expectations on price. To profitably employ a best-cost provider strategy, a company must have the capability to incorporate attractive or upscale attributes at a lower cost than rivals.

Best-cost strategies create competitive advantage by giving buyers more value for the money—delivering superior quality, features, performance, and/or service attributes while also beating customer expectations on price. To profitably employ a best-cost provider strategy, a company must have the capability to incorporate attractive or upscale attributes at a lower cost than rivals.

The correct answer is: incorporate attractive or upscale attributes into its product offering at a lower cost than rivals.

Question 4

 

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

Select one:

  1. coordinating with distributors or shippers to lower shipping costs.
  2. coordinating with employees to create a greater incentive systems to encourage worker productivity

A company’s incentive system can encourage not only greater worker productivity but also cost-saving innovations that come from worker suggestions.

  1. coordinating with suppliers to speed up new product development cycles.
  2. collaborating with suppliers to improve many dimensions affecting product features and quality.
  3. coordinating with retailers to enhance the buying experience and building a company’s image.

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A company’s incentive system can encourage not only greater worker productivity but also cost-saving innovations that come from worker suggestions.

A company’s incentive system can encourage not only greater worker productivity but also cost-saving innovations that come from worker suggestions.

The correct answer is: coordinating with employees to create a greater incentive systems to encourage worker productivity

Question 5

 

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

Select one:

  1. be considering exiting the current product market and use their competitive low-cost strength to gain a competitive advantage in other product arenas.
  2. be favorites to win the game of strategy in the long run.
  3. understand that they have lower bargaining power with suppliers than rivals who employ a different strategy.
  4. have out managed rivals in finding ways to perform value chain activities more cost-effectively. 

To achieve a low-cost edge over rivals, a firm’s cumulative costs across its overall value chain must be lower than competitors’ cumulative costs.

  1. understand that driving costs to the lowest possible level is the only way to sell cheap products to consumers.

Feedback

To achieve a low-cost edge over rivals, a firm’s cumulative costs across its overall value chain must be lower than competitors’ cumulative costs.

To achieve a low-cost edge over rivals, a firm’s cumulative costs across its overall value chain must be lower than competitors’ cumulative costs.

The correct answer is: have out managed rivals in finding ways to perform value chain activities more cost-effectively.

Question 6

 

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?

Select one:

  1. A best-cost provider strategy
  2. A low-cost provider strategy
  3. A focused differentiation strategy 

The manufacturer has used a focused differentiation strategy by concentrating on a narrow customer segment and outcompeting rivals by offering customers attributes that meet their specialized needs and tastes.

  1. A focused low-cost strategy
  2. A broad differentiation strategy

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The manufacturer has used a focused differentiation strategy by concentrating on a narrow customer segment and outcompeting rivals by offering customers attributes that meet their specialized needs and tastes.

The manufacturer has used a focused differentiation strategy by concentrating on a narrow customer segment and outcompeting rivals by offering customers attributes that meet their specialized needs and tastes.

The correct answer is: A focused differentiation strategy

Question 7

 

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

Select one:

  1. buyers are more performance-conscious than value-conscious.
  2. B. diverse buyer preferences make product differentiation the norm and where a large number of value-conscious buyers can be induced to purchase mid-range

A best-cost provider strategy works best in markets where product differentiation is the norm and an attractively large number of value-conscious buyers can be induced to purchase midrange products rather than cheap, basic products or expensive, top-of-the-line products. A best-cost provider needs to position itself near the middle of the market with either a medium-quality product at a below-average price or a high-quality product at an average or slightly higher price.

  1. there are numerous buyer segments, buyer needs are diverse across these segments, only a few of the segments are growing rapidly, and sellers’ products are strongly differentiated.
  2. a company is positioned between competitors who have ultra-low prices and competitors who have top-notch products in terms of both quality and performance.
  3. buyers are more quality-conscious than price-conscious.

Feedback

A best-cost provider strategy works best in markets where product differentiation is the norm and an attractively large number of value-conscious buyers can be induced to purchase midrange products rather than cheap, basic products or expensive, top-of-the-line products. A best-cost provider needs to position itself near the middle of the market with either a medium-quality product at a below-average price or a high-quality product at an average or slightly higher price.

A best-cost provider strategy works best in markets where product differentiation is the norm and an attractively large number of value-conscious buyers can be induced to purchase midrange products rather than cheap, basic products or expensive, top-of-the-line products. A best-cost provider needs to position itself near the middle of the market with either a medium-quality product at a below-average price or a high-quality product at an average or slightly higher price.

The correct answer is: 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.

Question 8

 

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

Select one:

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

A low-cost strategy works best when price competition among rival sellers is vigorous, the products of rival sellers are essentially identical and readily available from many eager sellers, buyers incur low costs in switching their purchases from one seller to another, and it is difficult to achieve product differentiation in ways that have value to buyers.

  1. there are many market segments and market niches, such that it is feasible for a low-cost leader to dominate the niche where buyers want a budget-priced product.
  2. there are widely varying needs and preferences among the various buyers of the product or service.
  3. buyers have high switching costs and there is considerable diversity in how buyers use the product.
  4. buyers prefer that the products/services of competing sellers have widely varying attributes and prices.

Feedback

A low-cost strategy works best when price competition among rival sellers is vigorous, the products of rival sellers are essentially identical and readily available from many eager sellers, buyers incur low costs in switching their purchases from one seller to another, and it is difficult to achieve product differentiation in ways that have value to buyers.

A low-cost strategy works best when price competition among rival sellers is vigorous, the products of rival sellers are essentially identical and readily available from many eager sellers, buyers incur low costs in switching their purchases from one seller to another, and it is difficult to achieve product differentiation in ways that have value to buyers.

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

Question 9

 

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

Select one:

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

To succeed in employing a low-cost provider strategy, a company must have the resources and capabilities to keep its costs below those of its competitors. This means having the expertise to cost-effectively manage value chain activities better than rivals, leveraging the cost drivers effectively, and/or having the innovative capability to bypass certain value chain activities being performed by rivals.

  1. effective leveraging of cost drivers.
  2. resources and capabilities to keep costs below those of its competitors.
  3. having the innovative capability to bypass certain value chain activities being performed by rivals.
  4. cost-effective management of value chain activities better than rivals.

Feedback

To succeed in employing a low-cost provider strategy, a company must have the resources and capabilities to keep its costs below those of its competitors. This means having the expertise to cost-effectively manage value chain activities better than rivals, leveraging the cost drivers effectively, and/or having the innovative capability to bypass certain value chain activities being performed by rivals.

To succeed in employing a low-cost provider strategy, a company must have the resources and capabilities to keep its costs below those of its competitors. This means having the expertise to cost-effectively manage value chain activities better than rivals, leveraging the cost drivers effectively, and/or having the innovative capability to bypass certain value chain activities being performed by rivals.

The correct answer is: capabilities to simultaneously deliver lower cost and higher-quality/differentiated features.

Question 10

 

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

Select one:

  1. whatever differentiating features buyers are willing to pay for.
  2. continuous cost reductions without sacrificing acceptable quality and essential features.

The production emphasis in a low-cost provider strategy usually requires a company to strive for a continuous search for cost reduction without sacrificing acceptable quality and essential features.

  1. small-scale production or custom-made products that match the tastes and requirements of niche members.
  2. product superiority.
  3. appealing features and better quality at lower costs than rivals.

Feedback

The production emphasis in a low-cost provider strategy usually requires a company to strive for a continuous search for cost reduction without sacrificing acceptable quality and essential features.

The production emphasis in a low-cost provider strategy usually requires a company to strive for a continuous search for cost reduction without sacrificing acceptable quality and essential features.

The correct answer is: continuous cost reductions without sacrificing acceptable quality and essential features.

 

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