Question 1

An efficiency frontier shows all of the different positions that a company can adopt with regard to differentiation and cost.

Accepted Answer

A) True 
 B)False

Question 2

All focus strategies entail serving a specific market segment using a differentiation approach.

Accepted Answer

A) True 
 B)False

Question 3

Nick, a professional magician, is often invited to perform magic tricks at birthday parties and other social gatherings from across the country. However, he offers his services only to clients who stay in the same city as him. He is also known to charge less than other magicians in the city. Nick is pursuing which generic business strategy?

Accepted Answer

A)   Improved services
B)   Right-time marketing
C)   Focused low-cost
D)   Broad low-cost
E)   Deterrence strategy

Question 4

In commodity markets, competitive advantage goes to the company that has the lowest costs.

Accepted Answer

A) True 
 B)False

Question 5

A market segment consists of a group of:

Accepted Answer

A)   similar products.
B)   customers who have similar needs.
C)   products that are considered obsolete.
D)   diverse products produced by the same manufacturer.
E)   customers who have diverse needs.

Question 6

Delta Airlines used to advertise its high-quality air travel service by saying it flew "anywhere, anytime." What generic strategy is represented by this advertisement?

Accepted Answer

A)   Broad low-cost
B)   Broad differentiation
C)   Vertical integration
D)   Right-time marketing
E)   Rapid growth

Question 7

When a company produces a wide range of products for various customer groups, it is following a _____ strategy.

Accepted Answer

A)   cost leadership
B)   differentiation
C)   customer retention
D)   market concentration
E)   share building

Question 8

A company pursuing a focus strategy:

Accepted Answer

A)   attempts to serve all market segments.
B)   concentrates on building market share in one market segment.
C)   typically has more resources at its disposal than a differentiator does.
D)   has a greater impact on costs and revenues.
E)   produce different offerings for different segments.

Question 9

Market segmentation refers to the process of subdividing a market into clearly identifiable groups of customers with similar needs, desires, and demand characteristics.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements is true of differentiation and cost structure?

Accepted Answer

A)   Differentiation and cost structure decisions affect one another.
B)   Differentiation and cost structure decisions do not affect one another.
C)   Companies that focus on the higher-value end of the market have a lower cost structure.
D)   Differentiation decisions do not affect a company's profitability.
E)   Cost structure decisions do not affect a company's profitability.

Question 11

A company has a competitive advantage if it can increase costs relative to rivals.

Accepted Answer

A) True 
 B)False

Question 12

When a company offers a wide variety of products at lower prices than its rivals, it is most likely:

Accepted Answer

A)   pursuing a low-cost strategy.
B)   pursuing a differentiation strategy.
C)   pursuing a focus strategy.
D)   pursuing an exit strategy.
E)   pursuing a divestment strategy.

Question 13

Companies with a differentiation advantage tend to charge a lower price for their products.

Accepted Answer

A) True 
 B)False

Question 14

At The Luxury Hotel in Miami, Florida, three hotel employees serve the needs of each guest. In every room, a guest can summon a chef, a maid, or a valet by pressing a button at his/her bedside. Which generic business-level strategy is The Luxury Hotel utilizing?

Accepted Answer

A)   Cost leadership
B)   Differentiation
C)   Vertical integration
D)   Razor and blade
E)   Brand loyalty

Question 15

When a company already has a low-cost structure, it has to give up a lot of differentiation in its product offering to get additional cost reductions.

Accepted Answer

A) True 
 B)False

Question 16

The generic business-level strategies are cost leadership, differentiation, and mass marketing.

Accepted Answer

A) True 
 B)False

Question 17

Lucy's Swimwear Boutique offers swimwear that is targeted at affluent people who can afford to buy expensive, handmade swimsuits. Which of the following approaches to market segmentation is Lucy's Swimwear Boutique using?

Accepted Answer

A)   Broad differentiation strategy
B)   Low market segmentation
C)   Medium market segmentation strategy
D)   Broad high-cost strategy
E)   Focus differentiation strategy

Question 18

A segmentation strategy requires that a company:

Accepted Answer

A)   standardize its products.
B)   offer its products at low costs.
C)   customize its products.
D)   produce one basic offering.
E)   attain high economies of scale by achieving a high volume of sales.

Question 19

When a company decides to serve a limited number of segments, or just one segment, it is pursuing a segmentation strategy.

Accepted Answer

A) True 
 B)False

Question 20

When a company is able to pioneer process innovations that lead to value innovation, it effectively changes the game in an industry and may be able to outperform its rivals for a long period of time.

Accepted Answer

A) True 
 B)False

Exam 5: Business-Level Strategy

An efficiency frontier shows all of the different positions that a company can adopt with regard to differentiation and cost.

Correct Answer
verified

Correct Answer
verified

When a company produces a wide range of products for various customer groups, it is following a _____ strategy.

Correct Answer
verified

A company has a competitive advantage if it can increase costs relative to rivals.

Correct Answer
verified

A company pursuing a focus strategy:

Correct Answer
verified

Market segmentation refers to the process of subdividing a market into clearly identifiable groups of customers with similar needs, desires, and demand characteristics.

Correct Answer
verified

When a company decides to serve a limited number of segments, or just one segment, it is pursuing a segmentation strategy.

Correct Answer
verified

When a company already has a low-cost structure, it has to give up a lot of differentiation in its product offering to get additional cost reductions.

Correct Answer
verified

Companies with a differentiation advantage tend to charge a lower price for their products.

Correct Answer
verified

Which of the following statements is true of differentiation and cost structure?

Correct Answer
verified

A segmentation strategy requires that a company:

Correct Answer
verified

In commodity markets, competitive advantage goes to the company that has the lowest costs.

Correct Answer
verified

Delta Airlines used to advertise its high-quality air travel service by saying it flew "anywhere, anytime." What generic strategy is represented by this advertisement?

Correct Answer
verified

All focus strategies entail serving a specific market segment using a differentiation approach.

Correct Answer
verified

When a company is able to pioneer process innovations that lead to value innovation, it effectively changes the game in an industry and may be able to outperform its rivals for a long period of time.

Correct Answer
verified

The generic business-level strategies are cost leadership, differentiation, and mass marketing.

Correct Answer
verified

When a company offers a wide variety of products at lower prices than its rivals, it is most likely:

Correct Answer
verified

A market segment consists of a group of:

Correct Answer
verified

Lucy's Swimwear Boutique offers swimwear that is targeted at affluent people who can afford to buy expensive, handmade swimsuits. Which of the following approaches to market segmentation is Lucy's Swimwear Boutique using?

Correct Answer
verified

At The Luxury Hotel in Miami, Florida, three hotel employees serve the needs of each guest. In every room, a guest can summon a chef, a maid, or a valet by pressing a button at his/her bedside. Which generic business-level strategy is The Luxury Hotel utilizing?

Correct Answer
verified

Exam 5: Business-Level Strategy

An efficiency frontier shows all of the different positions that a company can adopt with regard to differentiation and cost.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a company produces a wide range of products for various customer groups, it is following a _____ strategy.

Correct AnswerverifiedShow Answer

A company has a competitive advantage if it can increase costs relative to rivals.

Correct AnswerverifiedShow Answer

A company pursuing a focus strategy:

Correct AnswerverifiedShow Answer

Market segmentation refers to the process of subdividing a market into clearly identifiable groups of customers with similar needs, desires, and demand characteristics.

Correct AnswerverifiedShow Answer

When a company decides to serve a limited number of segments, or just one segment, it is pursuing a segmentation strategy.

Correct AnswerverifiedShow Answer

When a company already has a low-cost structure, it has to give up a lot of differentiation in its product offering to get additional cost reductions.

Correct AnswerverifiedShow Answer

Companies with a differentiation advantage tend to charge a lower price for their products.

Correct AnswerverifiedShow Answer

Which of the following statements is true of differentiation and cost structure?

Correct AnswerverifiedShow Answer

A segmentation strategy requires that a company:

Correct AnswerverifiedShow Answer

In commodity markets, competitive advantage goes to the company that has the lowest costs.

Correct AnswerverifiedShow Answer

Delta Airlines used to advertise its high-quality air travel service by saying it flew "anywhere, anytime." What generic strategy is represented by this advertisement?

Correct AnswerverifiedShow Answer

All focus strategies entail serving a specific market segment using a differentiation approach.

Correct AnswerverifiedShow Answer

When a company is able to pioneer process innovations that lead to value innovation, it effectively changes the game in an industry and may be able to outperform its rivals for a long period of time.

Correct AnswerverifiedShow Answer

The generic business-level strategies are cost leadership, differentiation, and mass marketing.

Correct AnswerverifiedShow Answer

When a company offers a wide variety of products at lower prices than its rivals, it is most likely:

Correct AnswerverifiedShow Answer

A market segment consists of a group of:

Correct AnswerverifiedShow Answer

Lucy's Swimwear Boutique offers swimwear that is targeted at affluent people who can afford to buy expensive, handmade swimsuits. Which of the following approaches to market segmentation is Lucy's Swimwear Boutique using?

Correct AnswerverifiedShow Answer

At The Luxury Hotel in Miami, Florida, three hotel employees serve the needs of each guest. In every room, a guest can summon a chef, a maid, or a valet by pressing a button at his/her bedside. Which generic business-level strategy is The Luxury Hotel utilizing?

Correct AnswerverifiedShow Answer

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