Question 1

An organization attempts to succeed by distinguishing its products from those of the competition; this is a(n)________ strategy.

Accepted Answer

Differentiation is a strategy that focuses on distinguishing a company's products or services from those of its competitors.

Question 2

Cheng-En has just completed a study for his company, NewElectronics, Inc., which produces wireless earbuds. This study focuses on the major threats to NewElectronics. Cheng-En has found that his company has one major rival, MagicSounds, Inc., which has developed impressive brand loyalty. Cheng-En's company uses a specific type of metal that only a few suppliers offer. However, NewElectronics's earbuds would still be affordable for many customers. Furthermore, Cheng-En does not see any products that can be used in place of New Electronics earbuds. Based on what you know about Michael Porter's five forces model, which of the following would Cheng-En claim is the greatest threat to NewElectronics?

Accepted Answer

The greatest threat is the high price of the metal used to make the earbuds, as there are only a few suppliers, which increases supplier power and can significantly impact production costs.

Question 3

The planning and strategy making necessary to increase the efficiency and effectiveness of a particular function are the responsibility of a

Accepted Answer

Functional managers are responsible for planning and strategizing to improve the efficiency and effectiveness of their specific function within an organization.

Question 4

The decision of a company to invest in state-of-the-art European production facilities is an example of a ________-level strategy.

Accepted Answer

The answer of The decision of a company to invest...

Question 5

An advantage of the differentiation strategy is

Accepted Answer

Differentiation strategy creates unique products or services, which can lead to greater brand loyalty and customer preference, thus creating greater barriers to entry for competitors.

Question 6

Concentration on a single industry, vertical integration, diversification, and international expansion are principal strategies of the ________ level of an organization.

Accepted Answer

These strategies are typically associated with the corporate level of an organization, which focuses on overall scope and direction.

Question 7

The motorcycle company EasyRider, Inc., finds itself stuck in the middle. To make this situation profitable, EasyRider decides to

Accepted Answer

By honing its production process to become more efficient, EasyRider can reduce production costs while maintaining high quality, making the situation profitable.

Question 8

Coca-Cola spends an enormous amount of money on advertising to distinguish, and create a unique image for, their products. Coca-Cola is pursuing a ________ strategy.

Accepted Answer

Coca-Cola is using a differentiation strategy by spending heavily on advertising to create a unique image and distinguish its products from competitors.

Question 9

Olav is the CEO for Blue Stone, Ltd., which makes costume jewelry designed by a Spanish artist named Valeria. As a result, this jewelry has strong appeal in areas of the United States with a large Latino population. However, the U.S. market already has two companies that make high-quality costume jewelry, which are popular with people who have a mid-to-high range income. Considering all of these elements, what should Olav do to ensure Blue Stone gains market share and is profitable?

Accepted Answer

The answer of Olav is the CEO for Blue Stone,...

Question 10

Digicom Corp. attempts to gain a competitive advantage by driving down its production costs per unit below those of its competitors. Digicom is pursuing a(n)________ strategy.

Accepted Answer

Digicom is pursuing a low-cost strategy by driving down its production costs per unit below those of its competitors.

Question 11

The corporate-level strategy that involves a company reinvesting its profits to strengthen its competitive position in the industry in which it is currently operating is

Accepted Answer

Concentration on a single industry involves reinvesting profits to enhance the company's competitive position within its current industry, rather than diversifying or expanding into new markets.

Question 12

What is the plan of action for a business-level strategy based on SWOT analysis?

Accepted Answer

A business-level strategy based on SWOT analysis aims to take advantage of favorable opportunities by leveraging strengths and addressing weaknesses to improve competitive positioning.

Question 13

Which of the following is most likely to require a short-term plan?

Accepted Answer

Functional goals often require short-term plans as they are specific objectives set for departments or teams to achieve within a limited timeframe.

Question 14

What happens when there are only a few large customers in the market?

Accepted Answer

When there are only a few large customers in the market, they have significant bargaining power and can drive down the price of the output by negotiating better terms with suppliers.

Question 15

EnergyPlus, Ltd., produces nutritional fruit bars, but is having trouble staying in business. Considering Michael Porter's five force model, which of the following is most likely the greatest threat for this company?

Accepted Answer

The introduction of a new granola bar to the market represents a threat of substitute products, which is one of Porter's five forces. This could directly impact EnergyPlus, Ltd.'s market share and profitability.

Question 16

Sterling, Inc., pursues a low-cost strategy by

Accepted Answer

A low-cost strategy involves minimizing production costs to offer products at a lower price than competitors.

Question 17

Best Grounds Coffee wants to pursue a vertical integration corporate level strategy. To accomplish this, it

Accepted Answer

Vertical integration involves acquiring or merging with suppliers or distributors to control the supply chain. By purchasing the supplier in Brazil, Best Grounds Coffee is integrating vertically by controlling its supply of coffee beans.

Question 18

Clark is the new CEO of Stonehedge, Inc. He wants to pursue a focused low-cost strategy for his company, which sells weapons and gear to hunters. To accomplish this, he will

Accepted Answer

A focused low-cost strategy involves offering products at lower prices than competitors to attract cost-conscious customers.

Question 19

A company that is serving only a few market segments has most likely adopted a ________ strategy.

Accepted Answer

A focused differentiation strategy is one in which a company focuses on serving a few market segments and differentiates its products or services from those of its competitors.

Question 20

BMW produces cars exclusively for high-income customers. BMW is pursuing a ________ strategy.

Accepted Answer

BMW targets a specific market segment (high-income customers) with unique, high-quality products, which is characteristic of a focused differentiation strategy.

Quiz 6: Planning, Strategy, and Competitive Advantage

An organization attempts to succeed by distinguishing its products from those of the competition; this is a(n) ________ strategy.