Exam 5: The Five Generic Competitive Strategies: Which One to Employ

A) tout the company's lower prices.
B) tout the lack of frills and extras.
C) out-advertise rivals and make frequent use of discount coupons.
D) communicate the attractive features of a budget-priced product offering that fits niche members' expectations.
E) communicate the product's ability to serve the customer's every need.

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A) the market is composed of distinctly different buyer groups who have different needs or use the product in different ways.
B) most other rival firms are using a best-cost producer strategy.
C) buyers have strong bargaining power and entry barriers are low.
D) most industry rivals have weakly differentiated products.
E) most industry participants are also using a focused differentiation strategy.

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A) seeks to be the low-cost provider in the largest and fastest growing (or best) market segment.
B) tries to have the best cost (as compared to rivals) for each activity in the industry's value chain.
C) tries to outcompete a low-cost provider by attracting buyers on the basis of charging the best price.
D) seeks to deliver superior value to buyers by satisfying their expectations on key attributes and beating rivals in meeting customer expectations on price.
E) seeks to achieve the best costs by using the best operating practices and incorporating the best features and attributes.

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A) sell a product with the best cost at the best price.
B) have the best cost (as compared to rivals) for each activity in the industry's value chain.
C) provide buyers with the best attributes at the best cost.
D) incorporate attractive or upscale attributes into its product offering at a lower cost than rivals.
E) do a better job than rivals of adopting the best operating practices.

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Focused low-cost and focused differentia...

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A) production technology and design.
B) customer service.
C) learning and experience.
D) capacity utilization.
E) input costs.

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A) a strategy that seeks to underprice rivals on comparable products that attract a broad spectrum of buyers
B) a strategy that seeks to differentiate product offerings from rivals by offering superior attributes that attract a broad spectrum of buyers
C) a strategy that concentrates on a narrow buyer segment and outcompetes rivals by offering niche members customized attributes
D) a strategy that concentrates on value-conscious buyers and outcompetes rivals by offering products at attractive prices
E) a strategy that is well matched to a company's internal situation; underpinned by an appropriate set of resources, know-how, and competitive capabilities; and difficult for rivals to match

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A) when the offerings of rival firms are essentially identical and readily available from many eager sellers
B) when there are few ways to achieve differentiation that have value to buyers
C) when price competition among rival sellers is especially vigorous
D) when buyers have widely varying needs and special requirements, and the prices of substitute products are relatively high
E) when the majority of industry sales are made to a few, large-volume buyers

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A) 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.
B) incorporate more differentiating features into its product/service than rivals.
C) concentrate its differentiating efforts on marketing and advertising (where almost all differentiating features are created) .
D) over-differentiate so that product quality, features, or service levels exceed the needs of most buyers.
E) concentrate on offering advanced features, whether or not they have value to the customers, to create unique products.

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A) a low-cost provider strategy
B) a broad differentiation strategy
C) a focused low-cost strategy
D) a focused differentiation strategy
E) a best-cost provider strategy

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A) outmatch the resource strengths of both low-cost providers and differentiators.
B) position the company outside the competitive arena of low-cost producers and differentiators.
C) 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) .
D) deliver superior value to buyers by doing such a good job of cost control that it ends up with the best cost (as compared to rivals) in performing each activity in its value chain.
E) identify and concentrate on those differentiating features that are inexpensive to incorporate.

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A) incorporating product attributes and user features that lower a buyer's overall cost of using the product.
B) incorporating features that raise the performance a buyer gets from using the product.
C) incorporating features that enhance buyer satisfaction in noneconomic or intangible ways.
D) delivering value to customers via competencies and competitive capabilities that rivals don't have or can't afford to match.
E) appealing to buyers on the basis of attributes that rivals are emphasizing.

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A) whether a company can build a brand name and an image that buyers trust.
B) whether a company's target market is broad or narrow and whether the company is pursuing a low cost or differentiation strategy.
C) whether a company can achieve lower costs than rivals and whether the company is pursuing the industry's sales and market share leader's role.
D) whether a company can offer the lowest possible prices and whether the company can get the best suppliers in the market.
E) whether a company's overall costs are lower than competitors' and whether the company can achieve strong product differentiation.

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The keys to sustaining a broad different...

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A) stress constant innovation to stay ahead of imitative rivals and to concentrate on a few differentiating features.
B) charge a premium price that more than covers the extra costs of differentiating features and to convince customers to be brand loyal.
C) out-innovate and out-advertise rivals.
D) emphasize personalized customer service and to add as many differentiating features as possible.
E) keep prices close to the average of all rivals and to spend heavily on new product R&D.

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A) It can avoid having to compete on the basis of simply a low price.
B) It commands a premium price for its product.
C) It usually increases unit sales.
D) It gains buyer loyalty to its brand.
E) It attracts mainly price-conscious buyers.

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A) appeal to the high-end part of the market and concentrate on providing a top-of-the-line product to consumers.
B) incorporate a greater number of differentiating features into its product/service than rivals.
C) lower buyer switching costs.
D) outspend rivals on advertising and promotion in order to inform and convince buyers of the value of its differentiating attributes.
E) offer unique product attributes in ways that are valuable and appealing and that buyers consider worth paying for.

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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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