Question 1

Coca Cola is an example of a company that pursues both a differentiation and cost leadership strategy.

Accepted Answer

Coca-Cola is an example of a company that pursues a differentiation strategy, not a cost leadership strategy.

Question 2

A firm's core competencies refer to those skills which are required to produce the firm's primary products but
which have little or no application in producing related products.

Accepted Answer

Core competencies are fundamental strengths or advantages of a firm that enable it to produce a wide array of products or services, not just its primary products. They often have broad applications across related products or services.

Question 3

Strong sales growth and low entry barriers characterize the embryonic and growth stages of a product's life cycle.

Accepted Answer

During the embryonic and growth stages of a product's life cycle, there is usually strong sales growth and relatively low entry barriers, as competition has not yet fully entered the market.

Question 4

Firms adopting a focus strategy compete primarily based on their superior understanding of how to satisfy their customers needs better than the competition.

Accepted Answer

Firms following a focus strategy target a specific niche market and try to meet their needs better than their competitors. This allows them to differentiate themselves and compete based on their understanding of the unique needs of their target customers.

Question 5

The corporate mission statement should be defined as broadly as possible since it seeks to describe the corporation's reason for being, and it should not exclude the firm from pursuing any significant opportunities.

Accepted Answer

A corporate mission statement should be specific enough to guide decision-making and strategy, but not so broad that it fails to provide direction or distinguish the company from its competitors.

Question 6

An analysis of markets should involve current and potential customers, as well as current and potential competitors, but
it should exclude suppliers.

Accepted Answer

Analysis of markets should involve suppliers as well since they can have a significant impact on the market and supply chain.

Question 7

Market segmentation involves identifying customers with common characteristics and needs.

Accepted Answer

Market segmentation is the process of grouping customers or potential customers who share common characteristics or needs. This allows businesses to tailor their marketing efforts and products or services to meet the specific needs and desires of each segment, resulting in more effective and efficient marketing strategies.

Question 8

A firm should choose that strategy from among the range of reasonable alternatives that enables it to achieve its stated objectives in an acceptable time period without regard for resource constraints.

Accepted Answer

Resource constraints are an important consideration in choosing a strategy, as a strategy that cannot be realistically implemented due to limited resources is not feasible.

Question 9

A differentiation strategy is one in which a firm's products are perceived by customers to be slightly different from other firms' products in the same industry.

Accepted Answer

This is the correct definition of differentiation strategy. By creating a unique product or providing superior service, a company can offer something that stands out to customers and sets them apart from the competition.

Question 10

The market targeted by the firm should reflect the fit between the corporation's primary strengths and competencies and its ability to satisfy customer needs better than the competition.

Accepted Answer

This is true because a market that is best suited to the corporation's strengths and competencies would allow it to differentiate itself from the competition and provide better value to customers.

Question 11

Corporate objectives are defined as what is to be accomplished within a specific period.

Accepted Answer

Corporate objectives are specific goals and targets that a company sets for itself to achieve within a defined time frame. These objectives help to provide direction and focus for the organization's efforts and resources.

Question 12

Firms adopting a focus strategy tend to concentrate their efforts by selling a few products to a single market and compete primarily on price.

Accepted Answer

Firms adopting a focus strategy concentrate their efforts on a narrow market segment by offering specialized products or services that meet the unique needs of that segment. They compete by providing better quality, superior service, or other unique features that set them apart from competitors, not necessarily by price.

Question 13

The evolution of the growth of a product can be characterized in four stages: embryonic, growth, maturity, and decline. This description is called a business attractiveness matrix.

Accepted Answer

The description of the evolution of the growth of a product in four stages is not called a business attractiveness matrix. It is called the product life cycle.

Question 14

A cost leadership strategy can be highly destructive to the firm with the largest market share if pursued concurrently by a number of firms with very different market shares.

Accepted Answer

The answer of A cost leadership strategy can be highly...

Question 15

A differentiation strategy is one in which customers believe that various competitors have significantly different cost structures.

Accepted Answer

A differentiation strategy involves a company developing unique products or services to stand out from competitors, not about customers perceiving different cost structures among competitors.

Question 16

An acquisition plan defines the objectives to be achieved by acquiring another firm, management's preferences as to how the acquisition process should be managed, resources required, and the roles and responsibilities of those responsible for implementing the plan.

Accepted Answer

This statement is true. An acquisition plan does indeed define the objectives to be achieved, management's preferences for the process, required resources, and roles and responsibilities of those involved.

Question 17

A price or cost leader in an industry is usually the firm with the largest market share.

Accepted Answer

The price or cost leader in an industry is usually the firm with the largest market share because they have economies of scale and bargaining power with suppliers that allow them to offer competitive prices while maintaining high profits.

Question 18

A competitive self-assessment involves an analysis of the firm's absolute strengths and weaknesses.

Accepted Answer

Competitive self-assessment involves an analysis of the firm's relative strengths and weaknesses, compared to those of its competitors.

Question 19

A competencies should be defined as narrowly as possible.

Accepted Answer

Competencies should be defined broadly enough to encompass a range of skills and behaviors that contribute to successful performance in a job or role, allowing for flexibility and adaptability in different situations.

Question 20

The experience curve is most important in analyzing industries with low fixed costs.

Accepted Answer

The experience curve is important in analyzing industries with high fixed costs. As cumulative production increases, the average cost per unit decreases due to economies of scale. This is particularly important in industries such as manufacturing and energy, where there are high levels of fixed costs associated with setting up production facilities.

Quiz 4: Planning: Developing Business and Acquisition Plans: Phases 1 and 2 of the Acquisition Process