Question 1

Production of a large product variety without a large cost penalty is known as:

Accepted Answer

Mass customization allows for the production of a large product variety without a large cost penalty by using modular designs and flexible manufacturing processes to tailor products to individual customers' preferences.

Question 2

Which of the following statements is true of differentiation and cost structure?

Accepted Answer

Differentiation and cost structure decisions are interdependent. Differentiation strategies can increase costs, but can also make the firm more competitive and improve profitability in the long run if the firm can charge higher prices. Cost structure decisions can affect the ability of a firm to differentiate. For example, if a firm chooses to outsource production to reduce costs, it may lose control over quality and its ability to differentiate.

Question 3

Lilly's Beauty Company sells haircare products such as shampoo,conditioner,and hairspray.The company does not sell new or customized products in order to meet the specific needs of certain groups of people.Which of the following approaches is illustrated in this scenario?

Accepted Answer

Lilly's Beauty Company is using the standardization strategy by offering a limited range of products that are not customized or tailored to specific customer needs. This approach allows for efficient production and lower costs, but may limit the company's ability to serve certain customer segments.

Question 4

Differentiation allows a company to:

Accepted Answer

Differentiation allows a company to offer unique and desirable attributes that set it apart from competitors, such as quality, design, or brand image, which can justify charging a higher price. This can lead to higher profits and avoid to compete solely on price.

Question 5

Which of the following is NOT a generic business-level strategy?

Accepted Answer

"Focused innovation strategy" is not a commonly recognized or established generic business-level strategy. The other four options are all widely recognized generic strategies that a business may pursue to gain a competitive advantage in their industry.

Question 6

The advantage that focused companies have over their broad market rivals is that they:

Accepted Answer

The answer of The advantage that focused companies have over...

Question 7

Lucy's Swimwear Boutique offers swimwear that is targeted at affluent people who can afford to buy expensive,handmade swimsuits.Which of the following approaches to market segmentation is Lucy's Swimwear Boutique using?

Accepted Answer

Lucy's Swimwear Boutique is using a focus differentiation strategy by targeting affluent people who are willing to pay for expensive, high-quality swimsuits. This approach allows the boutique to differentiate itself from competitors and appeal to a specific niche market.

Question 8

A company pursuing a focus strategy:

Accepted Answer

A company pursuing a focus strategy concentrates on building market share in one market segment. It does not attempt to serve all market segments, nor does it produce different offerings for different segments. While a focus strategy does require resources, it may not necessarily have more resources than a differentiator. The impact on costs and revenues will depend on the specific implementation of the strategy.

Question 9

A company that follows the _____ strategy customizes its offering to a particular niche in order to outsell its rivals.

Accepted Answer

Focused differentiation strategy involves targeting a specific niche market and offering a customized product or service to meet their needs. This allows the company to differentiate itself from its competitors and potentially charge a premium price for its offering.

Question 10

The main difference between companies following a broad low-cost strategy and those following a focus low-cost strategy is in the:

Accepted Answer

Companies following a broad low-cost strategy target a wide range of customers with a standardized product or service at a low price, while those following a focus low-cost strategy target a specific customer segment with a customized product or service at a low price. Therefore, the main difference lies in the degree of market segmentation.

Question 11

Nick,a professional magician,is often invited to perform magic tricks at birthday parties and other social gatherings from across the country.However,he offers his services only to clients who stay in the same city as him.He is also known to charge less than other magicians in the city.Nick is pursuing which generic business strategy?

Accepted Answer

Nick is pursuing a focused low-cost strategy by limiting his services to clients in the same city and charging less than other magicians.

Question 12

A focused differentiator has the advantage of:

Accepted Answer

A focused differentiator can focus on non-price factors, such as design or customer service, to create a unique and valuable product offering that distinguishes it from its competitors. This allows the company to charge a premium price for its products, even in the face of price competition from rivals.

Question 13

Which of the following is NOT a main approach to market segmentation?

Accepted Answer

The answer of Which of the following is NOT a...

Question 14

Yankee Candle Company offers customers candles that burn for 50-60 hours,much longer than most department store candle brands.Therefore,customers are willing to pay a higher price for these candles.Which of the following strategies is Yankee Candle Company following?

Accepted Answer

Yankee Candle Company is following a differentiation strategy by offering longer burn times and higher quality candles, which allows them to charge a higher price than their competitors.

Question 15

Delta Airlines used to advertise its high-quality air travel service by saying it flew "anywhere,anytime." What generic strategy is represented by this advertisement?

Accepted Answer

The advertisement of flying "anywhere, anytime" implies that Delta Airlines is offering a broad differentiation strategy, which includes differentiated services and products that cater to a wide range of customer needs and preferences.

Question 16

A company that follows a low-cost strategy could reasonably be expected to reduce costs by:

Accepted Answer

A low-cost strategy focuses on reducing costs as much as possible to offer products or services at a lower price than competitors. Adopting lean production and flexible manufacturing technologies can help reduce costs by streamlining production processes and reducing waste. Increasing business processes (A) and implementing first-in-first-out inventory control systems (C) may not necessarily reduce costs. Taking steps to increase customer churn (D) would not align with the goal of retaining customers, and abandoning economies of scale and learning effects (E) would not be a cost-reducing strategy.

Question 17

When a company offers a wide variety of products at lower prices than its rivals,it is most likely:

Accepted Answer

Offering a wide variety of products at lower prices than its rivals is a characteristic of a low-cost strategy, where the company focuses on reducing costs to offer products at lower prices and attract price-sensitive customers.

Question 18

When a company targets a certain segment or niche,and customizes its offering to the needs of that particular segment through the addition of features and functions,the company is pursuing a _____ strategy.

Accepted Answer

The company is pursuing a focus differentiation strategy by targeting a certain segment and customizing its offering according to the needs of that particular segment through the addition of features and functions. In a focus differentiation strategy, a company focuses on a narrow market segment and offers unique features to meet the needs of that market segment.

Question 19

Which of the following generic business-level strategies is based on the intent to lower costs so that a company can lower prices and still make a profit?

Accepted Answer

The broad low-cost strategy focuses on achieving low costs through economies of scale or efficient production processes, in order to offer products or services at lower prices than competitors while still maintaining profitability.

Question 20

At The Luxury Hotel in Miami,Florida,three hotel employees serve the needs of each guest.In every room,a guest can summon a chef,a maid,or a valet by pressing a button at his/her bedside.Which generic business-level strategy is The Luxury Hotel utilizing?

Accepted Answer

The Luxury Hotel is utilizing a differentiation strategy by providing unique and personalized services to each guest, such as the ability to summon a chef, maid, or valet with the touch of a button. This sets them apart from other hotels and creates a competitive advantage.

Quiz 5: Business Level Strategy