Question 1

Which of the following marketing strategies is most appropriate for a differentiated business?

Accepted Answer

A differentiated business strategy focuses on offering unique products or services that stand out in the market. This approach requires a strong emphasis on differentiated distribution and advertising to effectively reach and appeal to the target market segments. Large-scale efforts are often necessary to create and maintain the desired brand image and market position, making option D the most appropriate strategy.

Question 2

Which of the following financial strategies is most appropriate for a low-cost business?

Accepted Answer

A

Question 3

Low-cost businesses emphasize timely and pertinent information on the ongoing specialized processes that yield unique products/services.

Accepted Answer

Low-cost businesses often focus on providing timely and relevant information about their specialized processes that result in distinctive and affordable products/services. This helps them to maintain their competitive edge and attract more customers who are seeking value for their money.

Question 4

Which of the following marketing strategies is most appropriate for a low-cost-differentiation business?

Accepted Answer

A low-cost-differentiation business aims to offer unique features at a lower cost, so it should focus on differentiated distribution and large-scale advertising while keeping costs low.

Question 5

Knowledge management refers to the sum of the capabilities of individuals in an organization.

Accepted Answer

Knowledge management is not limited to individual capabilities, but also involves the processes, systems, and culture of an organization that enable the creation, sharing, and application of knowledge.

Question 6

Quality problems are generally limited to poorly managed firms.

Accepted Answer

Although poor management can be a contributing factor to quality problems, they can also occur in well-managed firms due to a variety of other reasons such as insufficient resources, lack of training, faulty equipment, etc.

Question 7

Differentiated businesses tend to emphasize process R&D.

Accepted Answer

Differentiated businesses tend to emphasize product R&D to innovate and create unique products or services that stand out in the market, rather than focusing primarily on process R&D, which is more about improving production efficiency.

Question 8

Low-cost businesses emphasize low initial investments in plants,equipment,and outlets,and low operation costs.

Accepted Answer

Low-cost businesses are designed to keep expenses low, both for initial investments and ongoing operations. This helps ensure profitability and makes it easier to get started with a new business venture.

Question 9

Learning is the idea that per-unit production costs decrease when volume increases.

Accepted Answer

Learning refers to the process of acquiring knowledge or skills through study, experience, or teaching. The idea that per-unit production costs decrease when volume increases is known as economies of scale.

Question 10

Just-in-time manufacturing often improves quality but usually does not influence costs.

Accepted Answer

Just-in-time manufacturing is highly focused on efficiency and reducing waste, which can result in lower costs. By minimizing inventory and reducing the need for expensive warehousing space, companies can save money. Additionally, a focus on quality can lead to less rework or product returns, further reducing costs.

Question 11

Which of the following financial strategies is most appropriate for a low-cost-differentiation business?

Accepted Answer

A low-cost-differentiation business aims to provide products or services with unique features at a low cost. Therefore, emphasizing specialized quality of operations when the cost of doing so is relatively low would be the most appropriate financial strategy. Lowering financial costs through borrowing or stock issuance and obtaining resources or funding output improvements may not be the best choice for a low-cost-differentiation business as it may undermine the competitive advantage of providing unique features at a low cost.

Question 12

Differentiated businesses typically emphasize reward systems that encourage cost reductions and innovation.

Accepted Answer

Differentiated businesses typically emphasize reward systems that encourage innovation and product differentiation, rather than cost reductions.

Question 13

In general,differentiated businesses emphasize obtaining resources and funding output improvements or innovations,even when financial costs may be high.

Accepted Answer

Differentiated businesses focus on creating unique and valuable products or services, which often requires investment in resources and research and development even if it is expensive in the short term.

Question 14

Differentiated businesses should emphasize specialized distribution and targeted advertising and promotion at the lowest cost possible.

Accepted Answer

Differentiated businesses focus on creating unique products or services that appeal to specific market segments, and while targeted advertising and promotion are crucial, doing so at the lowest cost possible is not always the priority. The emphasis is often on value and effectiveness rather than minimizing costs, as the goal is to highlight the unique aspects of the offering to justify a premium price.

Question 15

Which of the following is not true about functional strategies?

Accepted Answer

Functional strategies should be formulated before the business strategy because they support the implementation of the business strategy. They should be aligned with the overall corporate strategy as well. Therefore, option C is not true.

Question 16

Capital restructuring refers to an organization's ability to substitute labor for capital,or vice versa as volume increases,depending upon which combination minimizes costs and/or maximizes effectiveness.

Accepted Answer

Capital restructuring typically involves changing the mix of a company's debt and equity, such as through issuing new shares or buying back shares, to optimize its financial structure, not substituting labor for capital.

Question 17

Process R&D seeks to reduce operational costs and make them more efficient.

Accepted Answer

Process R&D (Research and Development) is focused on improving the efficiency and effectiveness of operational processes with the aim of reducing costs. Therefore, the statement is true.

Question 18

Low-cost-differentiated businesses should emphasize mass distribution and promotion,regardless of cost.

Accepted Answer

Low-cost-differentiated businesses aim to offer unique products or services at a lower cost, but mass distribution and promotion strategies should still consider cost efficiency to maintain their competitive advantage.

Question 19

Knowledge can be a source of competitive advantage regardless of the choice of generic strategy.

Accepted Answer

Knowledge can provide a competitive advantage through various means such as process innovation, product innovation, customer intimacy, and cost leadership regardless of the choice of generic strategy used by a company. It can be leveraged to enhance operational efficiency, develop new products and services, and to better understand and meet customer needs.

Question 20

Whether it is conducted in-house or outsourced,an information system is deemed effective if it helps the business carry out its strategy.

Accepted Answer

An information system is designed to support and help the business carry out its strategy, whether it is developed in-house or outsourced. Therefore, an effective information system should provide value to the organization and support its strategic goals.

Quiz 8: Functional Strategies