Deck 5: Strategy Formulation at the Business-Unit Level

Question 1

An organization's approach to competing in its chosen markets is _____.

A) generic business strategy
B) competitive dynamics
C) business level strategy
D) low-cost leadership strategy
E) differentiation strategy

Answer 1

business level strategy

Question 2

The strategy for Etap and Motel 6 can best be described as _____.

A) low-cost leadership strategy
B) differentiation
C) business level strategy
D) best-value strategy
E) competitive

Answer 2

low-cost leadership strategy

Question 3

The moves and countermoves of firms and their competitors are _____.

A) generic business strategies
B) competitive dynamics
C) business level strategy
D) low-cost leadership strategy
E) differentiation strategy

Answer 3

competitive dynamics

Question 4

The classification system for business-level strategies based on common strategic characteristics is _____.

A) generic business strategy
B) competitive dynamics
C) business level strategy
D) low-cost leadership strategy
E) differentiation strategy

Question 5

The strategy used when a firm pursues competitive advantage through efficient cost production is _____.

A) focus strategy
B) business level strategy
C) generic business strategy
D) differentiation
E) low-cost leadership strategy

Question 6

_____ is the strategy used when a firm pursues competitive advantage by distinguishing its products or services on the basis of an attribute.

A) low-cost leadership
B) focus
C) business level strategy
D) generic business strategy
E) differentiation

Question 7

The strategy used when a firm pursues competitive advantage by pursuing both cost leadership and differentiation strategies is _____.

A) best-value strategy
B) business level strategy
C) generic business strategy
D) competitive advantage
E) low-cost leadership strategy

Question 8

The extent to which the assets of an organization are associated with plants, equipment, and other fixed assets is _____.

A) entry barriers
B) exit barriers
C) capital intensity
D) high capacity utilization
E) economies of scale

Question 9

In some industries production costs per unit are less in a large facility than in a small facility. This concept is called _____.

A) high capacity utilization
B) economies of technology
C) outsourcing
D) economies of scale
E) learning effects

Question 10

If technological improvements result in lower total unit costs then firms have achieved a cost advantage due to _____.

A) high capacity utilization
B) economies of technology
C) outsourcing
D) learning effects
E) economies of scale

Question 11

The term used to describe when one firm contracts with another firm to provide goods or services that were previously supplied from within the company is _____.

A) high capacity utilization
B) economies of technology
C) outsourcing
D) learning effects
E) economies of scale

Question 12

The concept that the time required to complete a task will decrease as a predictable function of the number of times the task is repeated demonstrates _____.

A) high capacity utilization
B) economies of technology
C) outsourcing
D) the learning curve
E) economies of scale

Question 13

When pursuing differentiation strategies which are more likely to lead to a sustainable advantage?

A) Tangible resources
B) Intangible resources
C) Firm reputation
D) Brand names
E) Customer service

Question 14

A differentiation strategy could have sustainable differentiation based on _____.

A) brand or reputation
B) cost control
C) efficient manufacturing
D) cost saving technology
E) outsourcing

Question 15

The essence of a best-value strategy is _____.

A) finding a uniqueness that will bring a premium price at a reasonable cost
B) emphasizing the creation of extra value
C) stressing cost cutting measures
D) maximizing high capacity utilization
E) targeting a broader market

Question 16

The key to a best-value strategy is _____.

A) control of costs
B) product differentiation
C) supply and demand economics
D) a clear mission
E) a consistent structure

Question 17

A cost leader does _____.

A) need to cut costs in every aspect of the firm at all times
B) not need to be a price leader
C) not need to worry about imitation
D) not need to focus on the potential cutting of costs too deeply
E) need to make sure the product is unique

Question 18

The strategy used when a firm targets a particular market segment is called

A) Low-cost leadership strategy
B) Differentiation
C) Focus strategy
D) Best-value strategy
E) Market strategy

Question 19

The _____ portrays how sales volume for a product category changes over time.

A) product life cycle
B) production volume cycle
C) learning curve
D) industry life cycle
E) strategy life cycle

Question 20

Which term best describes the inevitable decline of leading firms due to competitive moves and countermoves?

A) Competitive advantage
B) Generic strategy
C) Business level strategy
D) Competitive dynamics
E) Creative destruction

Question 21

The strategy used when firms use every available resource in an effort to overwhelm rivals and reduce the change that countermoves will be successful is _____.

A) first mover advantage
B) aggressive strategy
C) collaboration strategy
D) retaliation strategy
E) strategic flexibility

Question 22

Firms that stay at the forefront of technological advances in their industries are said to have a(n) _____.

A) aggressive strategy
B) first mover advantage
C) collaboration strategy
D) retaliation strategy
E) strategic flexibility

Question 23

Domino's Pizza has done well using which approach to gain the market share in the pizza industry?

A) aggressive strategy
B) collaboration strategy
C) retaliation strategy
D) first mover advantage
E) strategic flexibility

Question 24

_____ is used when firms combine resources in an effort to gain a stronger resource position.

A) aggressive strategy
B) first mover advantage
C) collaboration strategy
D) retaliation strategy
E) strategic flexibility

Question 25

The strategy used to prevent competitors from imitating sources of cost savings or differentiation, is called _____.

A) avoidance strategy
B) barriers to entry
C) barriers to imitation
D) exit barriers
E) strategic flexibility

Question 26

_____ is used when a firm moves its resources out of declining markets into more prosperous ones in a short amount of time.

A) aggressive strategy
B) collaboration strategy
C) retaliation strategy
D) avoidance strategy
E) strategic flexibility

Question 27

_____ occurs when a firm focuses completely on a particular market niche in which other firms have little interest.

A) aggressive strategy
B) collaboration strategy
C) retaliation strategy
D) avoidance strategy
E) strategic flexibility

Question 28

A strategic group map categorizes _____.

A) competitors into groups by size
B) competitors into regions around the country
C) competitors into groups by the price charged
D) competitors into groups that follow similar strategies
E) different industries into groups based on competitive success

Question 29

List and discuss factors that firms use to create their low-cost positions:

Question 30

Discuss the risks associated with pursuing a cost-leadership strategy.