Question 1

Orphagenix,a small biotech firm,avoids head-to-head competition with large pharmaceutical companies by developing orphan drugs to target diseases that affect fewer than 200,000 people.This is an example of which of Porter's generic strategies?
A) differentiation
B) cost leadership
C) differentiation focus
D) competitive advantage
E) cost focus

Accepted Answer

Orphagenix is using differentiation focus by targeting a specific niche market with unique needs, which is diseases that affect fewer than 200,000 people. They are not competing directly with larger pharmaceutical companies, but instead are focused on serving the needs of a specific group of patients.

Question 2

One of the first steps in good strategy design should include crafting the mission statement for the organization.

Accepted Answer

Crafting a mission statement is typically one of the first steps in strategy design as it helps to define the purpose and direction of the organization.

Question 3

What are the common elements of a well-crafted mission statement?

Accepted Answer

The answer of What are the common elements of a...

Question 4

What are the three generic competitive strategies that Porter promotes as the means for outperforming other corporations in a particular industry?
A) competitive scope, differentiation, and focus
B) diversification, concentration, and competitive scope
C) cost, competitive scope, and focus
D) concentration, cost leadership, and differentiation
E) cost leadership, differentiation, and focus

Accepted Answer

Porter promotes three generic competitive strategies: cost leadership, differentiation, and focus. Cost leadership involves achieving the lowest cost of production and distribution in the industry. Differentiation involves creating a unique product or service that is perceived as superior to competitors. Focus involves targeting a specific segment of the market and tailoring products or services to meet their needs. These strategies can be used alone or in combination to outperform other corporations in a particular industry.

Question 5

According to Porter,the generic competitive strategy that reflects the ability to provide unique and superior value to the buyer in terms of product quality,special features,or after-sale service is called
A) competitive scope.
B) differentiation.
C) focus.
D) diversification.
E) cost leadership.

Accepted Answer

The generic competitive strategy that reflects the ability to provide unique and superior value to the buyer in terms of product quality, special features, or after-sale service is called differentiation. This strategy focuses on creating a unique and desirable product or service that sets the company apart from its competitors. This can be achieved through innovation, quality control, and customer service.

Question 6

The SFAS Matrix summarizes an organization's strategic factors by combining the external factors from the IFAS Table with the internal factors from the EFAS Table.

Accepted Answer

The SFAS Matrix is used to summarize an organization's strategic factors by combining the external factors from the IFAS (Internal Factor Analysis Summary) Table with the internal factors from the EFAS (External Factor Analysis Summary) Table.

Question 7

Business strategy is composed of
A) corporate and competitive strategy.
B) functional and divisional strategy.
C) competitive and cooperative strategy.
D) corporate and cooperative strategy.
E) divisional and competitive strategy.

Accepted Answer

The answer of Business strategy is composed of
A) corporate and...

Question 8

Which of the following is true of an organization's mission statement?
A) should be crafted late in the strategic implementation stage
B) articulates how the organization will take advantage of opportunities by overcoming weaknesses
C) does not have to be unique to the organization
D) should be short so every employee can remember it
E) does not provide direction for employees, but rather informs outsiders of what the organization does

Accepted Answer

A mission statement should be concise and memorable, enabling employees to easily remember and align with the organization's core purpose and direction.

Question 9

An effective mission statement not only needs to be specific to that organization; it must enable a common thread to highlight and focus the energy of everyone in the organization in the direction that the top management team believes is best for the business.

Accepted Answer

An effective mission statement should be specific to the organization and also provide a clear direction for everyone in the organization to work towards.

Question 10

According to Porter,the term that applies to the breadth of a company's or business unit's target market is called
A) competitive scope.
B) differentiation.
C) focus.
D) diversification.
E) cost leadership.

Accepted Answer

Competitive scope refers to the range of a company's target market, including both the breadth of products and services offered as well as the geographic range of customers served. This concept is a key component of Porter's Five Forces framework, which helps businesses evaluate their competitive position within their industry.

Question 11

In manufacturing toilet paper for grocery store chains (and avoiding competing directly against Charmin),Potlach has followed which of Porter's generic competitive strategies?
A) differentiation
B) cost leadership
C) differentiation focus
D) competitive advantage
E) cost focus

Accepted Answer

The answer of In manufacturing toilet paper for grocery store...

Question 12

Which of Porter's competitive strategies concentrates on seeking differentiation in a particular buyer group,product line segment,or geographic market?
A) segmentation focus
B) cost leadership
C) differentiation focus
D) competitive advantage
E) cost focus

Accepted Answer

The differentiation focus strategy involves targeting a specific buyer group, product line segment, or geographic market and seeking differentiation within that segment. This strategy focuses on creating a unique product or service that is perceived as valuable and desirable to the targeted segment, which allows the company to charge a premium price and gain a competitive advantage.

Question 13

According to Porter,the generic competitive strategy that reflects the ability of the corporation or its business unit to design,produce,and market a comparable product more efficiently than its competitors is called
A) competitive scope.
B) differentiation.
C) cost leadership.
D) diversification.
E) focus.

Accepted Answer

The generic competitive strategy that reflects the ability to produce a comparable product more efficiently than competitors is called cost leadership. This strategy is achieved through producing goods or services at lower costs without sacrificing quality, which allows the company to offer lower prices to customers and/or earn higher profits than its competitors.

Question 14

Which of Porter's competitive strategies recommends that a company emphasize a particular buyer group or geographic market and attempts to seek a cost advantage in its targeted segment?
A) differentiation
B) cost leadership
C) differentiation focus
D) competitive advantage
E) cost focus

Accepted Answer

Cost focus strategy involves targeting a specific market segment and aiming to be the lowest-cost producer in that segment, which matches the description given.

Question 15

Which of the following is not cited as one of the questions that development of a competitive strategy should raise?
A) Should we compete on the basis of lower cost?
B) Should we compete head-to-head with major competitors?
C) Should we differentiate our products or services on some basis other than cost?
D) Should we compete by garnering political support of influential leaders?
E) Should we compete in a niche market that we can satisfy which is superior to that of the competition?

Accepted Answer

The development of a competitive strategy should raise questions related to cost, differentiation, market niche, and head-to-head competition with major competitors. However, garnering political support of influential leaders is not typically considered a key factor in competitive strategy.

Question 16

Walmart,as a discount retailer,is an example of a company following which of Porter's competitive strategies?
A) differentiation
B) cost leadership
C) differentiation focus
D) competitive advantage
E) cost focus

Accepted Answer

Walmart follows a cost leadership strategy, which focuses on offering products at lower prices than its competitors to attract price-sensitive customers. Walmart achieves this by optimizing its supply chain, using economies of scale, and implementing efficient cost structures throughout its operations.

Question 17

What is a propitious niche? Provide an example of a firm that has been able to occupy a propitious niche successfully.

Accepted Answer

The answer of What is a propitious niche? Provide an...

Question 18

Business strategy focuses on
A) ensuring that the company maintains the existing market share that it has historically enjoyed.
B) improving the competitive position of a corporation's products or services within the industry or market segment served.
C) providing adequate shareholders' return on investment.
D) preventing the competition from gaining a competitive edge by undermining their marketing plan.
E) recovering the competitive lead by using all available resources that the company can provide.

Accepted Answer

Business strategy focuses on improving the competitive position of a corporation's products or services within the industry or market segment served. While ensuring market share, providing shareholders' return on investment, and preventing competition from gaining an edge may all be important elements of a business strategy, improving competitiveness is the primary focus. Recovering the competitive lead is also a potential element of a business strategy, but this is only relevant if the company has lost its previous competitive advantage.

Question 19

Apple is an example of a company following which of Porter's generic competitive strategies?
A) cost leadership
B) differentiation
C) cost focus
D) competitive scope
E) diversification

Accepted Answer

Apple follows a differentiation strategy by offering unique and innovative products that stand out from competitors in design, functionality, and brand image. They do not focus on cost leadership or cost focus, as they typically price their products higher than their competitors. They also have a narrow competitive scope, primarily focusing on the premium segment of the markets for smartphones, computers, and other devices rather than trying to compete across all price points. While they do have some diversification in their product offerings, such as with the Apple Watch and AirPods, these still fit within their overarching strategy of offering differentiated and innovative products.

Question 20

Which strategy raises the questions of whether to compete on the basis of lower cost or differentiation and whether to compete for the biggest market or a niche market?
A) business
B) corporate
C) competitive
D) functional
E) focus

Accepted Answer

The competitive strategy examines how a company can differentiate itself from its competitors and whether it should focus on cost or differentiation. It also looks at whether the company should target a large or niche market. The other strategies (business, corporate, functional, focus) do not specifically address these questions.

Quiz 6: Strategy Formulation: Business Strategy

Orphagenix,a small biotech firm,avoids head-to-head competition with large pharmaceutical companies by developing orphan drugs to target diseases that affect fewer than 200,000 people.This is an example of which of Porter's generic strategies?

One of the first steps in good strategy design should include crafting the mission statement for the organization.

What are the common elements of a well-crafted mission statement?

What are the three generic competitive strategies that Porter promotes as the means for outperforming other corporations in a particular industry?

According to Porter,the generic competitive strategy that reflects the ability to provide unique and superior value to the buyer in terms of product quality,special features,or after-sale service is called

The SFAS Matrix summarizes an organization's strategic factors by combining the external factors from the IFAS Table with the internal factors from the EFAS Table.

Business strategy is composed of

Which of the following is true of an organization's mission statement?

An effective mission statement not only needs to be specific to that organization; it must enable a common thread to highlight and focus the energy of everyone in the organization in the direction that the top management team believes is best for the business.

According to Porter,the term that applies to the breadth of a company's or business unit's target market is called

In manufacturing toilet paper for grocery store chains (and avoiding competing directly against Charmin) ,Potlach has followed which of Porter's generic competitive strategies?

Which of Porter's competitive strategies concentrates on seeking differentiation in a particular buyer group,product line segment,or geographic market?

According to Porter,the generic competitive strategy that reflects the ability of the corporation or its business unit to design,produce,and market a comparable product more efficiently than its competitors is called

Which of Porter's competitive strategies recommends that a company emphasize a particular buyer group or geographic market and attempts to seek a cost advantage in its targeted segment?

Which of the following is not cited as one of the questions that development of a competitive strategy should raise?

Walmart,as a discount retailer,is an example of a company following which of Porter's competitive strategies?

What is a propitious niche? Provide an example of a firm that has been able to occupy a propitious niche successfully.

Business strategy focuses on

Apple is an example of a company following which of Porter's generic competitive strategies?

Which strategy raises the questions of whether to compete on the basis of lower cost or differentiation and whether to compete for the biggest market or a niche market?