Question 1

Research shows that firms using a hybrid strategy (i.e., integrated cost leadership/differentation) often outperform firms using pure strategies ( i.e., cost leadership or differentation).

Accepted Answer

The answer of Research shows that firms using a hybrid...

Question 2

Amazon has built capabilities around Internet technology and e-commerce to facilitate information exchanges with its customers in a cost effective manner. This represents which of the three service dimension?
A) Reach
B) Richness
C) Affiliation
D) None of the these

Accepted Answer

The richness dimension refers to the amount of information that can be transmitted in a communication. Amazon's use of internet technology and e-commerce allows for a high level of information exchange, indicating a high level of richness.

Question 3

Because of its focus on innovation and quality manufacturing, Total Quality Management is not useful for firms which follow a cost leadership strategy.

Accepted Answer

Total Quality Management can be useful for firms following a cost leadership strategy because it can improve operational efficiency and reduce waste, ultimately leading to cost reductions. TQM also emphasizes continuous improvement, which can help companies to maintain a cost leadership position over time.

Question 4

Business-level strategies detail commitments and actions taken to provide value to customers and gain competitive advantage by exploiting core competencies in
A) the selection of industries in which the firm will compete.
B) specific product markets.
C) primary value chain activities.
D) particular geographic locations.

Accepted Answer

Business-level strategies focus on specific product markets where a company can excel and gain a competitive advantage by leveraging its core competencies. The selection of industries or geographical locations may not be relevant to the company's competitive advantage. Primary value chain activities are an important part of a company's operations, but they do not necessarily constitute a business-level strategy on their own.

Question 5

A risk of a focus strategy is that the needs of the customer within a narrow competitive segment may become more similar to those needs of customers in the whole market.

Accepted Answer

This is because as the market evolves and competition increases, customers within a narrow segment may start to demand more diverse products and services, making it harder for a company that focuses solely on that segment to meet their needs. This can lead to a loss of market share and ultimately, lower profits.

Question 6

The Li Ning Company's move from a cost leadership strategy to an integrated cost leadership/differentation strategy in the sportswear industry was so successful in China that both Nike and Adidas exited the Chinese market (Chapter 4 Strategic Focus).

Accepted Answer

There is no evidence or mention in Chapter 4 Strategic Focus that Nike and Adidas exited the Chinese market due to Li Ning's successful strategy. In fact, both Nike and Adidas remain major players in the Chinese sportswear market.

Question 7

Zara offers current and desirable fashion goods at relatively low prices. To implement this strategy, Zara has sophisticated designers and effective means of managing costs. Zara is an example of the integrated cost leadership/differentiation strategy.

Accepted Answer

Zara offers both cost leadership and differentiation by having sophisticated design and effective cost management strategies, which allows it to offer current and desirable fashion goods at relatively low prices. This is an example of an integrated cost leadership/differentiation strategy.

Question 8

When selecting a business level strategy, the firm must determine all of the following EXCEPT
A) How will the customer's needs be satisfied?
B) Who is the customer?
C) What are the customers' needs?
D) Why should these customers' needs be satisfied?

Accepted Answer

The firm must determine how the customer's needs will be satisfied, who the customer is, and what their needs are in order to choose a business level strategy. The only option that does not need to be determined is why these customers' needs should be satisfied, as this is generally assumed to be in order to generate profits and maintain a sustainable business.

Question 9

One of the benefits of the integrated cost leadership/differentiation strategy is that it is less risky than either the cost leadership or differentiation strategies.

Accepted Answer

The answer of One of the benefits of the integrated...

Question 10

A flexible manufacturing system is a computer-controlled process used to produce a variety of products in moderate, flexible quantities with minimal manual intervention.

Accepted Answer

A flexible manufacturing system (FMS) is a modern approach to manufacturing that is computer-controlled and can produce a variety of products in moderate, flexible quantities with minimal manual intervention. FMS can quickly switch between products and adapt to changing customer demands, making it an efficient and cost-effective manufacturing process.

Question 11

Although it is a cost leader, IKEA also offers differentiated features that appeal to its target customers, including its unique furniture designs, in-store playrooms for children, wheelchairs for customer use, and extended hours.

Accepted Answer

The statement accurately describes the differentiated features offered by IKEA in addition to being a cost leader.

Question 12

A firm's core strategy is its ____ strategy.
A) corporate
B) business
C) pricing
D) international

Accepted Answer

A firm's core strategy is its business strategy, which outlines how it will compete within a specific industry or market. Corporate strategy refers to the overall approach and direction of the entire company, while pricing and international strategies are specific tactics used within a business strategy.

Question 13

The three dimensions of a firm's relationships with customers include all the following EXCEPT
A) exclusiveness.
B) affiliation.
C) richness.
D) reach.

Accepted Answer

The three dimensions of a firm's relationships with customers are richness, reach, and affiliation. Exclusiveness is not one of the dimensions.

Question 14

Starbuck's (Chapter 4 Opening Case) was able to revolutionize the coffee drining experience throug its business level strategy of
A) focused cost.
B) cost leadership.
C) differentiation.
D) stuck-in-the-middle.

Accepted Answer

Starbucks' business level strategy was differentiation, which is evident in its unique coffee brewing methods, high-quality ingredients, personalized customer service, and comfortable ambiance. Starbucks differentiated itself from other coffee shops by offering a premium experience, which justified its higher prices and allowed it to capture a loyal customer base.

Question 15

Which of the following is TRUE?
A) As customer loyalty increases, customers are more sensitive to price increases.
B) Customer loyalty has a positive relationship with firm profitability.
C) Customer loyalty is fragile and cannot reliably be considered a factor in firm success.
D) Customer loyalty is of importance only to firms using the differentiation strategy.

Accepted Answer

Customer loyalty has a positive relationship with firm profitability, as loyal customers tend to make repeat purchases and may even recommend the company to friends and family. A) is false, as loyal customers are often willing to pay a premium for the brand or company they are loyal to. C) is false, as customer loyalty can be fostered through various means such as loyalty programs, excellent customer service, and quality products. D) is false, as customer loyalty is important for all types of firms, regardless of their chosen business strategy.

Question 16

The ________dimension of relationships with customers is particularly important for social networking sites such as Facebook and MySpace.
A) reach
B) richness
C) affiliation
D) social

Accepted Answer

The answer of The ________dimension of relationships with customers is...

Question 17

According to the Chapter 4 Opening Case, part of Starbuck's success in 2011 was the decision to
A) cease introducing new products.
B) emphasize innovation by introducing new products.
C) cut back on the number of stores it operates.
D) discontinue unternational expansion.

Accepted Answer

The opening case states that part of Starbuck's success in 2011 was due to their emphasis on innovation by introducing new products. This is in contrast to option A, which suggests they ceased introducing new products, option C, which suggests they cut back on the number of stores, and option D, which suggests they discontinued international expansion.

Question 18

A risk of The Li Ning Company's integrated cost leadership/differentation strategy is that it may end up "stuck-n-the-middle," i.e., not having either a low cost or a uniqueness advantage (Chapter 4 Strategic Focus).

Accepted Answer

The answer of A risk of The Li Ning Company's...

Question 19

The hazard of getting "stuck in the middle" applies to firms using any business strategy.

Accepted Answer

The hazard of getting "stuck in the middle" refers to a situation where a firm tries to simultaneously pursue both a low-cost strategy and a differentiation strategy, resulting in not achieving either strategy effectively. This hazard can apply to any business strategy, not just specific ones.

Question 20

Flexible manufacturing systems, information networks, and total quality management are three techniques that make it possible for firms to implement the focused differentiation strategy.

Accepted Answer

The answer of Flexible manufacturing systems, information networks, and total...

Quiz 4: Business Level Strategy

Research shows that firms using a hybrid strategy (i.e., integrated cost leadership/differentation) often outperform firms using pure strategies ( i.e., cost leadership or differentation).

Amazon has built capabilities around Internet technology and e-commerce to facilitate information exchanges with its customers in a cost effective manner. This represents which of the three service dimension?

Because of its focus on innovation and quality manufacturing, Total Quality Management is not useful for firms which follow a cost leadership strategy.

Business-level strategies detail commitments and actions taken to provide value to customers and gain competitive advantage by exploiting core competencies in

A risk of a focus strategy is that the needs of the customer within a narrow competitive segment may become more similar to those needs of customers in the whole market.

The Li Ning Company's move from a cost leadership strategy to an integrated cost leadership/differentation strategy in the sportswear industry was so successful in China that both Nike and Adidas exited the Chinese market (Chapter 4 Strategic Focus).

Zara offers current and desirable fashion goods at relatively low prices. To implement this strategy, Zara has sophisticated designers and effective means of managing costs. Zara is an example of the integrated cost leadership/differentiation strategy.

When selecting a business level strategy, the firm must determine all of the following EXCEPT

One of the benefits of the integrated cost leadership/differentiation strategy is that it is less risky than either the cost leadership or differentiation strategies.

A flexible manufacturing system is a computer-controlled process used to produce a variety of products in moderate, flexible quantities with minimal manual intervention.

Although it is a cost leader, IKEA also offers differentiated features that appeal to its target customers, including its unique furniture designs, in-store playrooms for children, wheelchairs for customer use, and extended hours.

A firm's core strategy is its ____ strategy.

The three dimensions of a firm's relationships with customers include all the following EXCEPT

Starbuck's (Chapter 4 Opening Case) was able to revolutionize the coffee drining experience throug its business level strategy of

Which of the following is TRUE?

The ________dimension of relationships with customers is particularly important for social networking sites such as Facebook and MySpace.

According to the Chapter 4 Opening Case, part of Starbuck's success in 2011 was the decision to

A risk of The Li Ning Company's integrated cost leadership/differentation strategy is that it may end up "stuck-n-the-middle," i.e., not having either a low cost or a uniqueness advantage (Chapter 4 Strategic Focus).

The hazard of getting "stuck in the middle" applies to firms using any business strategy.

Flexible manufacturing systems, information networks, and total quality management are three techniques that make it possible for firms to implement the focused differentiation strategy.