Question 1

Which of the following statements holds true for the cost leadership strategy?

Accepted Answer

A)  Cost leaders, in general, encourage expensive advertising campaigns.
B)  Cost leaders, in general, invest heavily in market research.
C)  Cost leaders, in general, spend substantial funds on research and development.
D)  Cost leaders, in general, make an effort to offer unique features to the customers.
E)  Cost leaders, in general, emphasize on efficiency.

Question 2

Pete opens a new pizzeria in town.He promises home delivery of pizzas within a period of thirty minutes.He also makes a unique offer that if the pizzas are not delivered within thirty minutes of placing the order, then the customer will not be charged for the pizza.None of the other pizzerias in his town offer such a deal.This is an example of a(n)  _____ strategy.

Accepted Answer

A)  cost leadership
B)  adaptive
C)  differentiation
D)  pull
E)  focused cost leadership

Question 3

Which of the following constitutes a disadvantage of the differentiation strategy?

Accepted Answer

A)  A differentiation strategy lacks the capacity to generate buyer loyalty.
B)  Competitors are able to imitate the features well enough that they are no longer unique.
C)  The firm needs to attract huge numbers of customers in order to have a good overall level of profit.
D)  Differentiation lacks an ability to obtain premium prices from customers.
E)  A differentiation strategy allows the entrance of new companies in the market.

Question 4

A firm is said to be _____ if it does not offer features that are unique enough to convince customers to buy its offerings and its prices are too high to effectively compete on based on price.

Accepted Answer

A)  paste-up
B)  runner
C)  rack jobber
D)  stuck in the middle
E)  preretailing

Question 5

Most cost leaders spend little on advertising, market research, or research and development in order to be efficient.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following holds true for companies following the focused differentiation strategy?

Accepted Answer

A)  The niche that is an area of operation of one company cannot be made to disappear or be taken over by larger competitors.
B)  Companies following the focused differentiation strategy can charge very high prices.
C)  Companies following this strategy depend on their ability to reduce the price to drive competition out of the market.
D)  Damaging attacks do come not from larger firms.
E)  Companies following the focused differentiation strategy

Question 7

Effective differentiation creates an ability to obtain premium prices from customers.

Accepted Answer

A) True 
 B)False

Question 8

Mekcin is a company that regularly launches products with features that are different from what are offered in the market.It has now launched a new electronic device which can be fitted to vehicles.It can be programmed to automatically dial the police emergency number, provide them with all the required location details, and guide them to the location, in the case of an emergency.Which of the following statements would hold true for Mekcin?

Accepted Answer

A)  It competes with rivals on the basis of price.
B)  It offers generic and standardized products.
C)  It does not invest in the field of market research.
D)  It spends little on research and development.
E)  It invests heavily in advertising and brand building.

Question 9

A company introduces a new product in the market.The company decides that the only way it could attract customers is to keep the price of the product lower than what its competitors charge.What advantage would the company enjoy because of the strategy it proposes to follow?

Accepted Answer

A)  If the market involves a lot of brand loyalty, the company would command the largest share in the market.
B)  Low expenditure on market research would help it to detect important environmental changes at a lower cost.
C)  If the market is highly fragmented the company would avail greater opportunities to attract a large segment of customers.
D)  It makes them well positioned to withstand price competition from rivals.
E)  The need for high sales volume would require low upfront investments in production and/or distribution capacity.

Question 10

A firm following the focused cost strategy necessarily charges the lowest prices in the industry.

Accepted Answer

A) True 
 B)False

Question 11

The unique features provided by firms following a focused differentiation strategy are often very specialized.

Accepted Answer

A) True 
 B)False

Question 12

One of the ways that cost leaders generally keep their costs low is by not spending much on advertising.

Accepted Answer

A) True 
 B)False

Question 13

A firm following a(n)  _____ strategy offers products or services with acceptable quality and features to a broad set of customers at a low price.

Accepted Answer

A)  pull
B)  cost leadership
C)  focused differentiation
D)  adaptive
E)  differentiation

Question 14

Cost leaders are companies that sell inferior, poor quality goods and services for rock-bottom prices.

Accepted Answer

A) True 
 B)False

Question 15

One route toward a best-cost strategy is for a firm to adopt a business model whose fixed costs and overhead are very low relative to the costs that competitors are absorbing.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is an advantage of cost leadership?

Accepted Answer

A)  It makes a firm following this strategy well positioned to withstand price competition from rivals.
B)  The need for high sales volume requires low upfront investments in production and/or distribution capacity.
C)  In markets that involve a lot of brand loyalty, cost leadership companies command the largest share in the market.
D)  Low expenditure on market research helps firms following the cost leadership strategy to detect important environmental changes at a lower cost.
E)  Highly fragmented markets offer firms following this strategy greater opportunities to attract a large segment of customers.

Question 17

Which of the following are created when the costs of offering goods and services decreases as a firm is able to sell more items?

Accepted Answer

A)  Economies of cost
B)  Economies of demand
C)  Economies of distribution
D)  Economies of scale
E)  Economies of supply

Question 18

According to Porter, which two competitive dimensions are the keys to business-level strategy?

Accepted Answer

According to Porter, two competitive dim...

Question 19

Which of the following constitutes an advantage of the differentiation strategy?

Accepted Answer

A)  It creates an ability to obtain premium prices from customers.
B)  Companies following this strategy do not need to spend significant funds on advertising.
C)  Companies following this strategy depend on their ability to reduce the price to drive competition out of the market.
D)  Customers always prefer a product with features rather than a cheaper alternative.
E)  Customers are always eager to pay extra to obtain the unique features that a firm is trying to build its strategy around.

Question 20

In many cases, the target market is defined by the sales channel used to reach customers.

Accepted Answer

A) True 
 B)False

Exam 5: Selecting Business-Level Strategies

Which of the following holds true for companies following the focused differentiation strategy?

Correct Answer
verified

One of the ways that cost leaders generally keep their costs low is by not spending much on advertising.

Correct Answer
verified

Most cost leaders spend little on advertising, market research, or research and development in order to be efficient.

Correct Answer
verified

Which of the following constitutes an advantage of the differentiation strategy?

Correct Answer
verified

According to Porter, which two competitive dimensions are the keys to business-level strategy?

Correct Answer
verified
According to Porter, two competitive dim...
View Answer

In many cases, the target market is defined by the sales channel used to reach customers.

Correct Answer
verified

Which of the following is an advantage of cost leadership?

Correct Answer
verified

The unique features provided by firms following a focused differentiation strategy are often very specialized.

Correct Answer
verified

A company introduces a new product in the market.The company decides that the only way it could attract customers is to keep the price of the product lower than what its competitors charge.What advantage would the company enjoy because of the strategy it proposes to follow?

Correct Answer
verified

One route toward a best-cost strategy is for a firm to adopt a business model whose fixed costs and overhead are very low relative to the costs that competitors are absorbing.

Correct Answer
verified

Correct Answer
verified

Cost leaders are companies that sell inferior, poor quality goods and services for rock-bottom prices.

Correct Answer
verified

A firm following the focused cost strategy necessarily charges the lowest prices in the industry.

Correct Answer
verified

Which of the following statements holds true for the cost leadership strategy?

Correct Answer
verified

Effective differentiation creates an ability to obtain premium prices from customers.

Correct Answer
verified

Correct Answer
verified

Which of the following constitutes a disadvantage of the differentiation strategy?

Correct Answer
verified

A firm following a(n) _____ strategy offers products or services with acceptable quality and features to a broad set of customers at a low price.

Correct Answer
verified

A firm is said to be _____ if it does not offer features that are unique enough to convince customers to buy its offerings and its prices are too high to effectively compete on based on price.

Correct Answer
verified

Which of the following are created when the costs of offering goods and services decreases as a firm is able to sell more items?

Correct Answer
verified

Exam 5: Selecting Business-Level Strategies

Which of the following holds true for companies following the focused differentiation strategy?

Correct AnswerverifiedShow Answer

One of the ways that cost leaders generally keep their costs low is by not spending much on advertising.

Correct AnswerverifiedShow Answer

Most cost leaders spend little on advertising, market research, or research and development in order to be efficient.

Correct AnswerverifiedShow Answer

Which of the following constitutes an advantage of the differentiation strategy?

Correct AnswerverifiedShow Answer

According to Porter, which two competitive dimensions are the keys to business-level strategy?

Correct AnswerverifiedAccording to Porter, two competitive dim...View AnswerShow Answer

In many cases, the target market is defined by the sales channel used to reach customers.

Correct AnswerverifiedShow Answer

Which of the following is an advantage of cost leadership?

Correct AnswerverifiedShow Answer

The unique features provided by firms following a focused differentiation strategy are often very specialized.

Correct AnswerverifiedShow Answer

A company introduces a new product in the market.The company decides that the only way it could attract customers is to keep the price of the product lower than what its competitors charge.What advantage would the company enjoy because of the strategy it proposes to follow?

Correct AnswerverifiedShow Answer

One route toward a best-cost strategy is for a firm to adopt a business model whose fixed costs and overhead are very low relative to the costs that competitors are absorbing.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Cost leaders are companies that sell inferior, poor quality goods and services for rock-bottom prices.

Correct AnswerverifiedShow Answer

A firm following the focused cost strategy necessarily charges the lowest prices in the industry.

Correct AnswerverifiedShow Answer

Which of the following statements holds true for the cost leadership strategy?

Correct AnswerverifiedShow Answer

Effective differentiation creates an ability to obtain premium prices from customers.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following constitutes a disadvantage of the differentiation strategy?

Correct AnswerverifiedShow Answer

A firm following a(n) _____ strategy offers products or services with acceptable quality and features to a broad set of customers at a low price.

Correct AnswerverifiedShow Answer

A firm is said to be _____ if it does not offer features that are unique enough to convince customers to buy its offerings and its prices are too high to effectively compete on based on price.

Correct AnswerverifiedShow Answer

Which of the following are created when the costs of offering goods and services decreases as a firm is able to sell more items?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
According to Porter, two competitive dim...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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