A product differentiation competitive advantage might

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perience curve. A product differentiation competitive advantage might be achieved by the use of the value impression (this possibility is implied in the description of the containers). The company might also try selling an augmented product-offering by bundling pickles and pepper products with its olives. The niche competitive advantage may be appropriate for this company. Some students may suggest targeting gourmets or some other single market. PTS: 1 REF: 19-20 OBJ: 02-5 TOP: AACSB Communication | TB&E Model Strategy 8. What is a competitive advantage? What makes a competitive advantage sustainable? ANS: A competitive advantage is the unique set of features of a company and its products that are perceived by the target market as significant and superior to the competition. A sustainable competitive advantage is one that cannot be copied by the competition. Without this, a competitive advantage could be easily copied and the advantage lost.
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PTS: 1 REF: 19 | 21 OBJ: 02-5 TOP: AACSB Communication | TB&E Model Strategy 9. Name and describe the four strategic alternatives in Ansoff’s strategic opportunity matrix, which matches products with markets. For each of the four strategic alternatives, give a specific example of a firm following that strategy. ANS: MARKET PENETRATION - increase market share among existing customers. Kraft Foods using heavy promotional expenditures in the form of aggressive advertising and cents-off coupons for Max- well House coffee. MARKET DEVELOPMENT - attracting new customers to existing products. McDonald's opening restaurants in Russia, China, and Italy; colleges and universities expanding to executive development and continuing education. PRODUCT DEVELOPMENT - creating new products for current customers. Brooks Brothers has in- troduced a line of poplin suits with polyester fibers that move moisture away from the body. DIVERSIFICATION - introducing new products into new markets. LTV entering the monorail busi- ness; Sony's acquisition of Columbia Pictures; Coca-Cola manufacturing water treatment equipment. PTS: 1 REF: 22 OBJ: 02-6 TOP: AACSB Communication | TB&E Model Strategy 10. List the four basic strategies used once an organization has identified its SBUs in terms of the portfolio matrix. Describe when each is used. ANS: The four basic strategies are (1) Build is used when an organization has identified an SBU it believes has the potential to be a star. Most likely the SBU has been identified as a problem child. (2) Hold is used when the SBU has been identified as a very successful cash cow. (3) Harvest is used with all SBU classifications except stars. The basic goal with this strategy is to increase short-term cash return. (4) Divest means to get rid of SBUs with low market share. Divestment strategy may be used with either dogs or problem children (also called question marks).
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