A) Striving to capture all available economies of scale
B) Trying to operate facilities at full capacity
C) Taking full advantage of experience and learning curve effects
D) Improving supply chain efficiency
E) Redesigning products to eliminate features that might have market appeal, but excessively increase production costs
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A) by providing niche members with a top-of-the-line product at a premium price.
B) by catering to buyers looking for an upscale product at an attractively low price.
C) with a product or service offering carefully designed to appeal to the unique preferences and needs of a narrow, well-defined group of buyers.
D) by developing product attributes that no other company in the industry has.
E) by convincing affluent buyers that the company has a true world-class product.
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A) the chance that competitors will not find effective ways to match the focused company's capabilities in serving the market niche.
B) the potential for the preferences and needs of niche members to shift over time toward mainstream provider product attributes.
C) the potential for the niche to become so attractive it will not attract new competitors thereby providing excessive market segment profits.
D) the likelihood that a focused company will become so cost efficient it will achieve excessive profits.
E) None of these are risks worth worrying about.
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A) incorporating attractive or upscale product attributes at a lower cost than rivals.
B) offering buyers the industry's best-performing product at the best cost and best (lowest) price in the industry.
C) attracting buyers on the basis of having the industry's overall best-performing product at a price that is slightly below the industry-average price.
D) outcompeting rivals using low-cost provider strategies.
E) translating its best-cost status into achieving the highest profit margins of any firm in the industry.
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A
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A) nearly always is attached to the quality and service aspects of a company's product offering.
B) most usually is the result of highly effective marketing and advertising campaigns designed to build awareness and recognition of the product or service offering.
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 biggest price premium in the industry.
E) often hinges on incorporating features that (1) raise the performance of the product or (2) lower the buyer's overall costs of using the company's product or (3) enhance buyer satisfaction in intangible or noneconomic ways or (4) deliver value to customers by exploiting competitive capabilities that rivals can't match.
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E
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A) price competition among rival sellers is especially vigorous.
B) commodity-based product prevails and minimal differentiation exists.
C) buyers incur low costs in switching their purchases from one seller/brand to another.
D) industry newcomers use low introductory prices to attract buyers and build a customer base.
E) All of these.
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A) provide detail to the company's business model.
B) build competitive advantage in the marketplace by giving buyers superior value relative to the offerings of rival sellers.
C) get the company into the best strategic group and then dominate it.
D) establish a competitively powerful value chain.
E) grow revenues at a faster annual rate than rivals are able to grow their revenues.
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A) deliver superior value to buyers by satisfying their expectations on key quality/performance/features/service attributes and beating their expectations on price.
B) offer buyers the industry's best-performing product at the best cost and best (lowest) price in the industry.
C) attract buyers on the basis of having the industry's overall best-performing product at a price that is slightly below the industry-average price.
D) outcompete rivals using low-cost provider strategies.
E) translate its best-cost status into achieving the highest profit margins of any firm in the industry.
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A
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A) technological change is slow paced and new or improved products are infrequent.
B) buyer needs and uses of the product are very similar.
C) buyers incur low costs in switching their purchases to rival brands.
D) buyers have a low degree of bargaining power and purchase the product frequently.
E) technological change is fast paced and competition revolves around rapidly evolving product features.
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A) command the largest market share in the industry.
B) set the industry ceiling on price.
C) avoid being overly concerned about whether entry barriers into the industry are high or low.
D) command a premium price for its product and/or increase unit sales and/or gain buyer loyalty to its brand.
E) take sales and market share away from rivals by undercutting them on price.
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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 quality/service/features/performance attributes and beating their expectations on price (given what rivals are charging for much the same attributes) .
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) whether the product is strongly differentiated or weakly differentiated from rivals.
B) the degree of bargaining power that buyers have.
C) the size of the buyer group that a company is trying to appeal to.
D) the production methods being used to achieve a low-cost competitive advantage.
E) the number of upscale attributes incorporated into the product offering.
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A) avoid having to compete on the basis of simply a low price.
B) charge a price premium for its product (because buyers see its differentiating features as worth something extra) .
C) increase unit sales (because of the attraction of its differentiating product attributes) .
D) gain buyer loyalty to its brand (because some customers will have a strong preference for the company's differentiating features) .
E) All of these.
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A) management's game plan for securing a competitive advantage relative to rivals.
B) what its strategy will be in such functional areas as R&D, production, sales and marketing, distribution, finance and accounting, and so on.
C) its efforts to change its position on the industry's strategic group map.
D) its plans for entering into strategic alliances, utilizing mergers or acquisitions to strengthen its market position, outsourcing some in-house activities to outside specialists, and integrating forward or backward.
E) All of these.
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A) that buyers will be highly skeptical about paying a relatively low price for upscale attributes/features.
B) not establishing strong alliances and partnerships with key suppliers.
C) that low-cost leaders will be able to steal away some customers on the basis of a lower price and high-end differentiators will be able to steal away customers with the appeal of better product attributes.
D) that it will be unable to achieve top-notch quality at a rock-bottom cost.
E) becoming too highly integrated and not relying enough on outsourcing.
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A) pursue backward or forward integration to detour suppliers or buyers with considerable bargaining power and leverage.
B) move the performance of most all value chain activities to low-wage countries.
C) sell direct to users of their product or service and eliminate use of wholesale and retail intermediaries.
D) do two things: (1) perform value chain activities more cost-effectively than rivals and (2) be proactive in revamping the firm's overall value chain to eliminate or bypass "nonessential" cost-producing activities.
E) outsource the majority of value chain activities.
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A) be well matched to its internal situation and predicated on leveraging its collection of competitively valuable resources and competencies.
B) be aligned toward being at least an average performer within the industry.
C) be well attuned to doing an outstanding job of satisfying the needs and expectations of niche buyers.
D) have the resources and capabilities to incorporate standard attributes into its product offering.
E) ensure it is designed to concentrate on a small range of products so it can react quickly to competitive moves.
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A) the extra attention paid to top-notch product performance and product quality.
B) their concentrated attention on a narrow piece of the overall market.
C) greater opportunity for competitive advantage.
D) their suitability for market situations where most industry rivals have weakly differentiated products.
E) their objective of delivering more value for the money.
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A) there are many ways to achieve product differentiation that buyers find appealing.
B) buyers use the product in a variety of different ways.
C) the offerings of rival firms are essentially identical, standardized, commodity-like products.
D) buyers have high switching costs in changing from one seller's product to another.
E) the market is composed of many buyer types, all with varying needs and expectations.
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A) buyers are not price sensitive.
B) the industry is made up of a large number or equal-sized rivals.
C) there are many ways to achieve product differentiation that have value to buyers.
D) price competition is especially vigorous, buyers have low switching costs, and the majority of industry sales are made to a few, large volume buyers.
E) switching costs are high, price competition is strong, and buyers tend to use the industry's products in many different ways.
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