CBA 469 Ch. 6 Quiz - Assignment Essays

question

A company with a cost-leadership strategy faces significant difficulties when _____________

answer

the focus of competition shifts from price to non-price attributes

question

True or False: Formulating a business strategy is a relatively easy task because only a few strategic options are available.

answer

False

question

Which of the following are components of a cost-leadership strategy?

answer

- lowest costs in the industry
- acceptable value

question

Implementing a blue ocean strategy requires making competition irrelevant and creating a new market space, otherwise known as ______.

answer

value innovation

question

Which competitive forces can result in erosion of margins for both differentiation and cost-leadership business strategies?

answer

- power of buyers
- power of suppliers
- threat of entry

question

A successful blue ocean strategy requires strategists to reconcile the trade-offs between _______.

answer

differentiation and cost-leadership

question

The concept of a(n) ______ attempts to combine both learning effects and process improvements.

answer

experience curve

question

Which of the following are significant threats to a firm pursuing a cost-leadership strategy?

answer

- replacement by innovative substitutes
- competitors adopting similar business strategies
- value failing below the acceptable threshold

question

True or False: Tesla's high stock market valuation is partly justified by the company's learning curve.

answer

True

question

In addition to having the lowest cost, a low-cost leader is likely to have ________.

answer

a large market share

question

In terms of productivity, which of the following is true of learning curves?

answer

they go down

question

A(n) _______ strategy attempts to increase the perceived value of a product while controlling costs.

answer

differentiation

question

What is one of the benefits of pursuing a differentiation strategy when it comes to the power of suppliers?

answer

Differentiation provides protection against an increase in input prices

question

A struggling retailer seeking to implement a blue ocean strategy is likely to experience difficulty with ______.

answer

cutting costs and increasing value at the same time

question

What must strategic leaders keep in mind if they are going to achieve successful strategic positioning?

answer

to achieve strategic positioning, firms must make important trade-offs

question

A firm that manages to avoid competition entirely by offering a product or service that creates an uncontested market space is engaging in _______.

answer

value innovation

question

Why do many firms fail to successfully implement a blue ocean strategy?

answer

because they end up being "stuck in the middle", unable to increase value and lower costs at the same time

question

Business-level strategy addresses which overarching question?

answer

How should we compete?

question

How to compete on a business level is defined by the variables value and cost. Together they define the ______.

answer

economic value created

question

The most significant challenge JetBlue faced in implementing its business strategy was ________.

answer

reconciling the trade-offs between cutting costs and providing superior service

question

The ________ determines whether to pursue a specific narrow part of the market or to go after the broader market.

answer

scope of competition

question

A company's goal-directed plans regarding how to compete for advantage is known as the firm's ______.

answer

business-level strategy

question

A _______ strategy attempts to create products with unique and attractive features in order to increase the price that consumers are willing to pay.

answer

differentiation

question

Which two of the following variables can managers primarily manipulate in order to answer the question, "How should we compete?"

answer

- cost
- value

question

When pursuing a differentiation strategy, a firm can achieve a competitive advantage by ______.

answer

ensuring that its economic value exceeds that of its competitors

question

An important requirement for increasing economic value creation under a differentiation strategy is to _______.

answer

control costs

question

Economies of ______ are the savings that come from producing two or more different outputs at a lower cost than producing each output individually.

answer

scope

question

Whereas the firm's strategic position can be considered either differentiated or cost-focused, the scope of competition is considered _________

answer

narrow or broad

question

What are the three most important value drivers that managers can use to create a competitive advantage?

answer

- customer service
- complements
- product features

question

By using a differentiation strategy, a firm aims to ______.

answer

add unique features that will increase the perceived value of a product

question

Which of the following accurately describes the relationship between value and cost that would suggest that firm A has created a competitive advantage over firm B?

answer

(V-C) A > (V-C) B

question

Unique features and attributes that differentiate a product from competitors' offerings allow the firm to _______.

answer

charge premium pricing

question

The Ritz-Carlton provides a personalized customer experience based on sophisticated analysis of data gathered about each guest. This focus on ________ allows the hotel to increase its perceived value.

answer

customer service

question

A manufacturer of electronic components can use its manufacturing machines to produce many different components such as semiconductors, sensors, and capacitors. In this case, the firm benefits from an economy of _______, reducing overall production costs by finding multiple uses for its components and facilities.

answer

scope

question

Value drivers known as ______ add value to a product or service when they are consumed in tandem with the focal product.

answer

complements

question

Positive adjustments in product features, customer service, and complements may enable managers to _____.

answer

improve the firm's strategic position

question

A cost leader can achieve a competitive advantage by ______.

answer

reducing costs below those of competitors while maintaining a similar value

question

An auto manufacturer that has access to cheaper labor and raw materials than its rival will have a competitive advantage regarding lower cost of ______ factors.

answer

input

question

Which capability is required to create superior product features?

answer

R&D

question

Economies of scale are _______.

answer

decreases in cost per unit as output increases

question

Which value driver would be the focus of a company that sells products that are similar to competing products and that provides a 60-day guarantee with no questions asked?

answer

customer service

question

What is the relationship between fixed costs and economies of scale?

answer

the amount of fixed costs allocated to each unit of output decreases as output increases

question

Bundling of products and services that are consumed in tandem to create value is an example of ______.

answer

complements

question

Larger output allows firms to invest in more specialized systems such as _______.

answer

- manufacturing robots
- enterprise resource planning software

question

The cube-square rule makes it _____ for smaller stores to compete with larger retailers.

answer

harder

question

Which of the following are inputs factors?

answer

- labor
- capital
- raw materials
- information technology services

question

In the relationship between per-unit cost and output, the minimum efficient scale ______.

answer

is where the per-unit cost is lowest

question

Economies of scale present an opportunity to increase profits because as the number of units within the relevant range increases, fixed costs ________.

answer

stay the same

question

Why does the learning curve go down when productivity is considered?

answer

as workers repeatedly engage in an activity, they become more efficient, driving down costs

question

Tesla has an 80% learning curve, which means that ______.

answer

per-unit cost drops 20% whenever output doubles

question

According to the _________ rule, increasing the surface area (size) of a storage unit or retail facility results in a disproportionate increase in volume (space).

answer

cube square

question

The minimum efficient scale indicates the level of output needed to ________ the cost per unit as much as possible.

answer

bring down

question

Baby Buggy Baby sells high-end baby strollers. In an attempt to maintain its competitive advantage, the firm began adding additional features to its strollers. Customers liked these features and sales increased, but the company's profit margins shrank. Which of the following is the likely reason for this?

answer

the firm neglected to control costs

question

A firm's strategic position is determined by the relationship of which two variables?

answer

value creation and cost

question

Which of the following are considered the two generic business-level strategies?

answer

- cost-leadership
- differentiation

question

For a differentiation strategy to strengthen a company's strategic position and boost its competitive advantage, ________.

answer

an increase in value creation must exceed the increase in costs

question

Which of the following scenarios would result in strengthening a firm's strategic position?

answer

a firm adds a new product feature that greatly increases the perceived value of the product at a minimal cost to the firm

question

The goal of a _____________ strategy is to achieve expenses below those of competitors while maintaining similar value. A firm with this strategy could or could not achieve differentiation parity.

answer

cost leadership

question

Which of the following situations would justify the use of manufacturing robots by a producer of packaged foods?

answer

an increase in demand from the market

question

If two firms produce very similar products at the same rate of output, and firm A is able to achieve lower per-unit costs than firm B by taking advantage of a new manufacturing technology, firm A is benefiting from

answer

an experience-curve effect based on process innovation

question

A producer of consumer headphones that successfully differentiates its products with a patented noise-canceling technology and celebrity endorsements will enjoy which of the following benefits?

answer

- less intense competition from imitators
- the ability to charge a premium price

question

Products in the affordable "business-casual" clothing market have largely become commoditized, and most retailers have begun to compete mainly on price rather than product features. In this environment, it is impossible for one retailer to gain market share without another losing it. This is an example of a ______ ocean.

answer

red

question

Which of the following are business strategies JetBlue pursued in order to gain a competitive advantage?

answer

differentiation and cost-leadership

question

A firm's strategic profile based on value creation and cost is called its _______.

answer

strategic position

question

A _________ strategy aims to create higher value for customers by offering products with unique features but a similar level of costs to those of competing products.

answer

differentiation

question

A firm that increases its output of a given product and experiences a simultaneous decrease in per unit costs is taking advantage of ______.

answer

economies of scale

1 of 66

question

A company with a cost-leadership strategy faces significant difficulties when _____________

answer

the focus of competition shifts from price to non-price attributes

question

True or False: Formulating a business strategy is a relatively easy task because only a few strategic options are available.

answer

False

question

Which of the following are components of a cost-leadership strategy?

answer

- lowest costs in the industry
- acceptable value

question

Implementing a blue ocean strategy requires making competition irrelevant and creating a new market space, otherwise known as ______.

answer

value innovation

question

Which competitive forces can result in erosion of margins for both differentiation and cost-leadership business strategies?

answer

- power of buyers
- power of suppliers
- threat of entry

question

A successful blue ocean strategy requires strategists to reconcile the trade-offs between _______.

answer

differentiation and cost-leadership

question

The concept of a(n) ______ attempts to combine both learning effects and process improvements.

answer

experience curve

question

Which of the following are significant threats to a firm pursuing a cost-leadership strategy?

answer

- replacement by innovative substitutes
- competitors adopting similar business strategies
- value failing below the acceptable threshold

question

True or False: Tesla's high stock market valuation is partly justified by the company's learning curve.

answer

True

question

In addition to having the lowest cost, a low-cost leader is likely to have ________.

answer

a large market share

question

In terms of productivity, which of the following is true of learning curves?

answer

they go down

question

A(n) _______ strategy attempts to increase the perceived value of a product while controlling costs.

answer

differentiation

question

What is one of the benefits of pursuing a differentiation strategy when it comes to the power of suppliers?

answer

Differentiation provides protection against an increase in input prices

question

A struggling retailer seeking to implement a blue ocean strategy is likely to experience difficulty with ______.

answer

cutting costs and increasing value at the same time

question

What must strategic leaders keep in mind if they are going to achieve successful strategic positioning?

answer

to achieve strategic positioning, firms must make important trade-offs

question

A firm that manages to avoid competition entirely by offering a product or service that creates an uncontested market space is engaging in _______.

answer

value innovation

question

Why do many firms fail to successfully implement a blue ocean strategy?

answer

because they end up being "stuck in the middle", unable to increase value and lower costs at the same time

question

Business-level strategy addresses which overarching question?

answer

How should we compete?

question

How to compete on a business level is defined by the variables value and cost. Together they define the ______.

answer

economic value created

question

The most significant challenge JetBlue faced in implementing its business strategy was ________.

answer

reconciling the trade-offs between cutting costs and providing superior service

question

The ________ determines whether to pursue a specific narrow part of the market or to go after the broader market.

answer

scope of competition

question

A company's goal-directed plans regarding how to compete for advantage is known as the firm's ______.

answer

business-level strategy

question

A _______ strategy attempts to create products with unique and attractive features in order to increase the price that consumers are willing to pay.

answer

differentiation

question

Which two of the following variables can managers primarily manipulate in order to answer the question, "How should we compete?"

answer

- cost
- value

question

When pursuing a differentiation strategy, a firm can achieve a competitive advantage by ______.

answer

ensuring that its economic value exceeds that of its competitors

question

An important requirement for increasing economic value creation under a differentiation strategy is to _______.

answer

control costs

question

Economies of ______ are the savings that come from producing two or more different outputs at a lower cost than producing each output individually.

answer

scope

question

Whereas the firm's strategic position can be considered either differentiated or cost-focused, the scope of competition is considered _________

answer

narrow or broad

question

What are the three most important value drivers that managers can use to create a competitive advantage?

answer

- customer service
- complements
- product features

question

By using a differentiation strategy, a firm aims to ______.

answer

add unique features that will increase the perceived value of a product

question

Which of the following accurately describes the relationship between value and cost that would suggest that firm A has created a competitive advantage over firm B?

answer

(V-C) A > (V-C) B

question

Unique features and attributes that differentiate a product from competitors' offerings allow the firm to _______.

answer

charge premium pricing

question

answer

customer service

question

answer

scope

question

Value drivers known as ______ add value to a product or service when they are consumed in tandem with the focal product.

answer

complements

question

Positive adjustments in product features, customer service, and complements may enable managers to _____.

answer

improve the firm's strategic position

question

A cost leader can achieve a competitive advantage by ______.

answer

reducing costs below those of competitors while maintaining a similar value

question

An auto manufacturer that has access to cheaper labor and raw materials than its rival will have a competitive advantage regarding lower cost of ______ factors.

answer

input

question

Which capability is required to create superior product features?

answer

R&D

question

Economies of scale are _______.

answer

decreases in cost per unit as output increases

question

Which value driver would be the focus of a company that sells products that are similar to competing products and that provides a 60-day guarantee with no questions asked?

answer

customer service

question

What is the relationship between fixed costs and economies of scale?

answer

the amount of fixed costs allocated to each unit of output decreases as output increases

question

Bundling of products and services that are consumed in tandem to create value is an example of ______.

answer

complements

question

Larger output allows firms to invest in more specialized systems such as _______.

answer

- manufacturing robots
- enterprise resource planning software

question

The cube-square rule makes it _____ for smaller stores to compete with larger retailers.

answer

harder

question

Which of the following are inputs factors?

answer

- labor
- capital
- raw materials
- information technology services

question

In the relationship between per-unit cost and output, the minimum efficient scale ______.

answer

is where the per-unit cost is lowest

question

Economies of scale present an opportunity to increase profits because as the number of units within the relevant range increases, fixed costs ________.

answer

stay the same

question

Why does the learning curve go down when productivity is considered?

answer

as workers repeatedly engage in an activity, they become more efficient, driving down costs

question

Tesla has an 80% learning curve, which means that ______.

answer

per-unit cost drops 20% whenever output doubles

question

According to the _________ rule, increasing the surface area (size) of a storage unit or retail facility results in a disproportionate increase in volume (space).

answer

cube square

question

The minimum efficient scale indicates the level of output needed to ________ the cost per unit as much as possible.

answer

bring down

question

answer

the firm neglected to control costs

question

A firm's strategic position is determined by the relationship of which two variables?

answer

value creation and cost

question

Which of the following are considered the two generic business-level strategies?

answer

- cost-leadership
- differentiation

question

For a differentiation strategy to strengthen a company's strategic position and boost its competitive advantage, ________.

answer

an increase in value creation must exceed the increase in costs

question

Which of the following scenarios would result in strengthening a firm's strategic position?

answer

a firm adds a new product feature that greatly increases the perceived value of the product at a minimal cost to the firm

question

The goal of a _____________ strategy is to achieve expenses below those of competitors while maintaining similar value. A firm with this strategy could or could not achieve differentiation parity.

answer

cost leadership

question

Which of the following situations would justify the use of manufacturing robots by a producer of packaged foods?

answer

an increase in demand from the market

question

answer

an experience-curve effect based on process innovation

question

A producer of consumer headphones that successfully differentiates its products with a patented noise-canceling technology and celebrity endorsements will enjoy which of the following benefits?

answer

- less intense competition from imitators
- the ability to charge a premium price

question

answer

red

question

Which of the following are business strategies JetBlue pursued in order to gain a competitive advantage?

answer

differentiation and cost-leadership

question

A firm's strategic profile based on value creation and cost is called its _______.

answer

strategic position

question

A _________ strategy aims to create higher value for customers by offering products with unique features but a similar level of costs to those of competing products.

answer

differentiation

question

A firm that increases its output of a given product and experiences a simultaneous decrease in per unit costs is taking advantage of ______.

answer

economies of scale

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