Question 1

The five business level strategies include all except
A) cost leadership.
B) differentiation.
C) focused integration.
D) integrated cost leadership/differentiation.

Accepted Answer

The five business level strategies are cost leadership, differentiation, focused cost leadership, focused differentiation, and integrated cost leadership/differentiation. Therefore, the option not included in the list is C, focused integration.

Question 2

Ralph Lauren produces products that are
A) too expensive.
B) differentiated.
C) standardized.
D) appealing to a very small niche market.

Accepted Answer

Ralph Lauren is known for producing products that are differentiated from other brands, often associated with high quality and a luxurious lifestyle. While some may consider the products to be expensive, this is a subjective determination and not necessarily representative of the overall market perception. The brand has a broad appeal and is not limited to a very small niche market. The products are not standardized, as they often incorporate unique designs and materials.

Question 3

The key to implementing the integrated cost leadership/differentiation strategy is flexibility.

Accepted Answer

Flexibility allows a company to adapt to changes in the market and continue to provide differentiated products or services while also maintaining a low cost structure. This is critical for a successful implementation of the integrated cost leadership/differentiation strategy.

Question 4

JetBlue's early success can be attributed to the solid execution of the cost leadership strategy

Accepted Answer

JetBlue's early success can be attributed to its focus on cost leadership, which included offering competitive prices, low operating costs, and efficient operations. By executing this strategy effectively, JetBlue was able to differentiate itself from other airlines and gain a competitive edge in the market.

Question 5

A factor contributing to the poor performance of some large, diversified firms is their unwillingness to use a single, corporate-wide business-level strategy for each of their business units.

Accepted Answer

The answer of A factor contributing to the poor performance...

Question 6

A ____ strategy describes how it will compete in the marketplace on a day-by-day basis.
A) corporate
B) limited
C) competitive
D) business

Accepted Answer

A business strategy outlines how a company plans to achieve its goals and objectives in a specific market. It involves developing a plan for how the company will compete with other businesses in the market on a regular basis, such as by offering unique products or services, pricing competitively, or focusing on specific customer needs. A competitive strategy is a narrower concept that specifically focuses on how a company will differentiate itself from its competitors in the market, such as by offering better quality, lower prices, or more convenient services. A corporate strategy, on the other hand, is a broader plan that outlines how a company will achieve its overall mission and vision across all its different business units and markets. A limited strategy may refer to a specific aspect of a company's operations or marketing, rather than a comprehensive plan for achieving its overall goals.

Question 7

In general, firms with a standardized product should narrowly segment their market.

Accepted Answer

Standardized products are designed to appeal to a broad audience, so firms typically target a wide market segment rather than narrowly segmenting their market.

Question 8

A firm following a cost leadership strategy would invest heavily in product R&D.

Accepted Answer

A cost leadership strategy focuses on minimizing costs to offer products at lower prices compared to competitors. Investing heavily in product R&D would increase costs and go against the strategy. Instead, a firm following this strategy would focus on minimizing costs in all areas, including R&D.

Question 9

Competitive scope describes the breadth of the target market the organization wishes to serve.

Accepted Answer

Competitive scope determines the range of customers or markets that a company wants to reach, compete and serve effectively.

Question 10

Wal-Mart's history shows that
A) business-level strategy is constantly subject to change.
B) business-level strategy can remain unchanged for a long time.
C) business-level strategy is overrated.
D) corporate-level strategy is more important than business-level strategy.

Accepted Answer

Wal-Mart's business-level strategy has evolved multiple times throughout its history, from focusing on rural areas to expanding globally and incorporating e-commerce. This demonstrates that business-level strategy is constantly subject to change.

Question 11

A business-level strategy is a "big picture," highly-generalized action plan that will move an organization toward achievement of its general vision.

Accepted Answer

A business-level strategy is more specific, focusing on how a company will compete in a particular industry or market segment, rather than the overarching, general vision of the organization.

Question 12

The integrated cost leadership/differentiation strategy must target a narrow market.

Accepted Answer

The integrated cost leadership/differentiation strategy is a broad market approach that targets both cost-conscious customers as well as those who are looking for unique and differentiated products or services. The goal is to appeal to a wide range of consumers while still maintaining a competitive advantage in terms of cost and differentiation.

Question 13

The dominant function in the structure for the cost-leadership strategy is Accounting.

Accepted Answer

The dominant function in the structure for the cost-leadership strategy is often Operations, as this strategy focuses on optimizing production and operational processes to minimize costs.

Question 14

Typically, the customers of organizations using the cost-leadership strategy are not highly loyal.

Accepted Answer

Customers who are attracted to the cost-leadership strategy are often price-sensitive and may switch to a competitor offering a lower price. Therefore, they tend to have lower brand loyalty compared to customers attracted by other strategies such as differentiation or focus.

Question 15

A generic business strategy is one that can be used in all industries and by all types of firms.

Accepted Answer

The answer of A generic business strategy is one that...

Question 16

Wal-Mart has not adjusted its business model since the mid 1990s.

Accepted Answer

Wal-Mart has made several changes to its business model since the mid 1990s, including expanding into e-commerce, introducing new store formats, and investing in sustainability initiatives.

Question 17

One of the benefits of the functional structure is that its elements are the same across different business-level strategies.

Accepted Answer

The functional structure, while offering benefits such as specialization and efficiencies within departments, does not guarantee that its elements are the same across different business-level strategies. Different strategies may require different functional alignments and priorities.

Question 18

Of the three organizational structures, only the simple structure and the functional structure can be used to implement business-level strategies.

Accepted Answer

Both the simple structure and the functional structure are suitable for implementing business-level strategies, whereas the multidivisional structure is more appropriate for implementing corporate-level strategies.

Question 19

In general, customers are satisfied when the firm's product
A) is produced according to any corporate code of ethics.
B) costs less than similar products offered by competing firms.
C) is unique in the marketplace.
D) creates value for them.

Accepted Answer

Ultimately, customers are satisfied when they feel that the firm's product has created value for them. This could be through meeting their needs, solving a problem, or providing a benefit that outweighs the cost. While factors such as ethical production and low cost may contribute to customer satisfaction, they are not the primary drivers. Unique products may also contribute to customer satisfaction, but only if they still create value for the customer.

Question 20

An action plan the firm develops to produce goods or services to serve the needs of a specific market segment is called a focus strategy.

Accepted Answer

This statement accurately describes the definition of a focus strategy.

Quiz 5: Business-Level Strategy

The five business level strategies include all except

Ralph Lauren produces products that are