Exam 5: The Five Generic Competitive Strategies

A) relying too heavily on outsourcing.
B) getting squeezed between the strategies of firms employing low-cost provider strategies and high-end differentiation strategies.
C) getting trapped in a price war with low-cost leaders.
D) being timid in cutting its prices far enough below high-end differentiators to win away many of their customers.
E) not having a sustainable distinctive competence in cost reduction.

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The five generic competitive strategies ...

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A) offer better goods at attractive prices.
B) create attributes that appeal specifically to niche members.
C) lower overall costs more than rivals in serving niche members.
D) offer buyers something attractively different from competitors' offerings.
E) offer the best product at the industry's lowest possible price.

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A) eliminate wholesale and retail intermediaries and instead sell directly to users of their product or service.
B) perform value chain activities more cost-effectively than rivals and be proactive in revamping the firm's overall value chain to eliminate or bypass "nonessential" cost-producing activities.
C) outsource the majority of value chain activities to nations that have lower wage rates and fewer regulations.
D) develop and market products and services at that absolute lowest possible cost.
E) pursue backward or forward integration to deter suppliers or buyers with considerable bargaining power and leverage.

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A) whether it is easy or inexpensive for rivals to copy the low-cost leader's methods or otherwise match its low costs.
B) how easy it is for the low-cost leader to gain the biggest market share.
C) the aggressiveness with which the low-cost leader pursues converting the cost advantage into the absolute lowest possible costs.
D) the leader's ability to combine the cost advantage with a reputation for good quality.
E) the low-cost leader's ability to be the industry leader in manufacturing innovation so as to keep lowering its manufacturing costs.

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A) ferreting out cost-saving opportunities in every part of the value chain.
B) undertaking an operations functionality redesign.
C) establishing sales productivity and operating practices guidelines.
D) re-creating rivals' assembly plant structuration savings.
E) pursuing a differentiation strategy that can be easily copied.

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A) establish a competitively powerful value chain.
B) grow revenues at a faster annual rate than rivals are able to grow their revenues.
C) lend greater detail to the company's business model.
D) provide buyers superior value relative to the offerings of rival sellers in order to attain a competitive advantage.
E) get the company into the best strategic group and then dominate it.

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A) are most reliably found in the R&D portion of the value chain.
B) are typically located in the sales and marketing portion of the value chain.
C) can exist in activities all along an industry's value chain.
D) usually are tied to product quality and customer service.
E) are most frequently attached to a company's manufacturing expertise and to its ability to achieve economies of scale in production.

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Following are the pitfalls in pursuing a...

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A) supply chain efficiencies
B) economies of scale
C) incentive systems and culture
D) bargaining power
E) capacity utilization

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A) it is focused on product innovation.
B) differentiating enhances product performance and quality.
C) the differentiating features appeal to sophisticated and prestigious buyers.
D) the higher price the product commands exceeds the added costs of achieving the differentiation.
E) the differentiator charges a price that is only fractionally higher than the industry's low-cost provider.

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A) excellent marketing and sales skills in convincing buyers to pay a premium price for the attributes/features incorporated in its product.
B) resource strengths and competitive capabilities that allow it to incorporate upscale attributes at lower costs than rivals whose products have similar upscale attributes.
C) access to greater learning/experience curve effects and scale economies than rivals.
D) one of the best-known and most respected brand names in the industry.
E) a short, low-cost value chain.

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A) lowest possible prices for comparable products.
B) a low-cost/moderate price approach to gain the biggest market share.
C) high buyer switching costs.
D) meaningful lower overall costs than rivals on comparable products.
E) higher unit sales than rivals.

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A) there are many ways to differentiate the product or service that has value to buyers.
B) most buyers have the same needs and use the product in the same ways.
C) technological changes are slow-paced.
D) barriers to entry are high and suppliers have a low degree of bargaining power.
E) price competition is especially vigorous.

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A) underpricing rivals and attracting quality-sensitive buyers in great enough numbers.
B) maintaining the present price and using the lower-cost edge to earn a higher profit margin on each unit sold.
C) going all out to use its cost advantage to capture a dominant share of the market.
D) spending heavily on advertising to promote its cost advantage to build strong customer loyalty.
E) outproducing rivals and thus having more available units for sale.

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A) nearly always is attached to the quality and service aspects of a company's product offering.
B) usually is the result of highly effective marketing and advertising to enhance the brand, raise awareness, and build consistent customer experience.
C) requires developing at least one distinctive competence that buyers consider valuable.
D) hinges on a company's success in developing top-of-the-line product features that will command the highest price premium in the industry.
E) 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.

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A) possessing resources and capabilities to keep costs below those of its competitors.
B) pursuing cost-effective management of value chain activities better than rivals.
C) deploying effective leveraging of cost drivers.
D) having the innovative capability to bypass certain value chain activities being performed by rivals.
E) evolving the capabilities to simultaneously deliver lower cost and higher-quality/differentiated features.

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A) ensure it is designed to concentrate on a small range of products so it can react quickly to competitive moves.
B) be well matched to its internal situation and predicated on leveraging its collection of competitively valuable resources and competencies.
C) be well matched to its resources and capabilities in order to incorporate standard attributes into its product offering.
D) be supportive with its objective to become at least an average performer within its industry.
E) be well attuned to doing an outstanding job of satisfying the needs and expectations of niche buyers.

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