Bus401 s07 sena quiz4 - This test is open book open notes...

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Unformatted text preview: This test is open book, open notes. Please submit your test answers directly to your instructor at the beginning of the next class. Please do NOT submit them in electronic form —- either via the digital drop box in blackboard or by email. Chapter 5 Multiple Choice Questions 1. The primary aim of strategic management at the business level is A) maximizing risk-return tradeoffs through diversification. B) achieving a low cost position. C maximizing differentiation of products and/or services. (D? achieving competitive advantage(s). 2. Convincing rivals not to enter a price war, protection from customer pressure to lower prices, and the ability to better withstand cost increases from suppliers racterize which type of competitive strategy? Overall cost leadership. B) Differentiation. C) Differentiation focus. D) Cost leadership focus. Cost cutting may lead to the loss of desirable features. B) Attempts to stay ahead of the competition may lead to gold plating. C) Cost differences increase as the market matures. D) Producers are more able to withstand increases in suppliers' cost. 3. fiich of the following is a risk (or potential pitfall) of cost leadership? 4. Support value chain activities that involve excellent applications engineering support (technology development) and facilities that promote a positive firm ' ge (firm infrastructure) characterize what generic strategy? Differentiation. B) Overall cost leadership. C) Differentiation focus. D) Stuck—in~the middle. iyfliich statement regarding competitive advantages is true? 5 If several competitors pursue similar differentiation tactics, they may all be perceived as equals 1n the mind of the consumer. B) With an overall cost leadership strategy, firms need not be concerned with parity on differentiation. C) In the long run, a business with one or more competitive advantages is probably destined to earn normal profits. D) Attaining multiple types of competitive advantage is a recipe for failure. Bus 401 Quiz 4 Page 1 6. 010M914; M1 indflrg Nil 8 24L 1. intro 2. 0mm) 3, WNY 9~ + Dedimz/ 10. 11. A firm following a focus strategy ' must focus on governmental regulations. must focus on a market segment or group of segments. C) must focus on the rising cost of inputs. D) must avoid entering international markets. Research has consistently shown that firms that achieve both cost leadership and differentiation advantages tend to perform A) at about the same level as firms that achieve either cost or differentiation advantages. B) about the same as firms that are “stuck—in-the—middle.” C) lower than firms that achieve differentiation advantages but higher than firms that achieve cost advantages. 9 higher than firms that achieve either a cost or a differentiation advantage. The growth stage of the industry life cycle is characterized by @ “in-kind” competition (from the same type of product). premium pricing. C) a growing trend to compete on the basis of price. D) retaliation by competitors whose customers are stolen. Which of the following is considered an accurate statement for a product in the growth period of its life cycle? A) It is difficult to gain. market share in growth markets. B There is more price pressure in growth markets. . It is easier to develop technology in the growth phase. D) Customers are brand loyal in the growth phase. In the stage of the industry life cycle, there are many segments, competition is very intense, and the emphasis on process design is high. A) introduction B growth .C),.. maturity ,) decline In a given market, key technology no longer has patent protection, experience is not an advantage, and there is a growing need to compete on price. What stage of its life cycle is the market in? > A) Introduction. Growth. Maturity. D) Decline. Bus 401 Quiz 4 Page 2 12. A market that mainly competes on the basis of price and has stagnant growth is . characteristic of what life cycle stage? A) Introduction. Growth. C Maturity. D) Decline: 13. As markets mature, firms should attempt to compete on the basis of A) quick response. @differentiation. V C) cost leadership. D) market focus. 14. The size of pricing and differentiation advantages between competitors decreases in which stage of the market life cycle? A) Introduction. Growth. Maturity. ‘ D) Decline. 15. Which of the following is most often true of mature markets? A) Some competitors enjoy a significant operating advantage due to increasing experience effects. B The market supports premium pricing, which attracts additional competitors. Advantages that cannot be duplicated by other competitors are difficult to achieve. D) The magnitude of pricing differences and product differentiation is larger than in the growth stage. True/False Questions 16. Michael Porter' s three generic strategies can be depicted on two dimensions: competitive advantage and product life cycle. True or alse ; Target mfg. “a”; 17 Concentrating solely on one form of competitive advantage generally leads to the highest flue level of profitability. als True ort'v ACMQx/eot vol Pari’né 18. A firm striving for cost leadership will typically spend relatively more on product related R&D’t ban on process related R&D. True or MES?! C (ET KdeYShlP d0? h 66 O n refers TIL—fl @933 ’24?) P 19. The focus ofocusing on the‘ ‘non-price’ ’attributes of a company's product | _ True or alse afferent-uh on ‘x \. Bus 401 Quiz 4 Page 3 20. To generate above average returns, a firm following an overall cost leadership position should not be concerned with attaining parity or proximity on'the basis of differentia ' relative to its peers. ”mag; Pew on Pawn for abode 0V6. rewrm” 21. The experience curve concept suggests that production costs tend to decrease as productio 'ncreases regardless of where an industry is at in its life cycle. True or :alse FONSG 493' \RHOQ CXQCXVLL) phase» 2“ ‘p/ 22. Firms that compete on overall cost leadership are vulnerable if all rivals share a common input or raw material that contributes a significant amount to total costs. El‘ru‘é or False 23. One of the advantages of high differentiation is that even if many competitors follow thesame strategy, differentiation still exists for all. True or False DiWotonhocwm rates on omega/sums“ 24. A successful differentiation strategyl owers entry barriers because of customer loyalty and the firm' 3 ability to provide uniqueness in its products and services. True or Fails) \HCYGOSQS/ YUM “S M Wirfm 25. Creating a niche by differentiating one' s product or service often allows small firms to compete successfully with market leaders. True or False BUS 401 QUiZ 4 Page 4 ...
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