Question 1

One of the five forces of industry analysis is understand the bargaining power of customers.

Accepted Answer

Understanding the bargaining power of customers is indeed one of the 5 forces of industry analysis. The other 4 forces are the threat of new entrants, the bargaining power of suppliers, the threat of substitute products or services, and the intensity of competitive rivalry.

Question 2

Cost-leadership strategy usually focuses productivity and efficiency improvements , elimination of waste along with effective cost control systems.

Accepted Answer

Cost-leadership strategy aims to achieve the lowest cost of production possible through productivity improvements, elimination of waste, and effective cost control systems.

Question 3

Which of the following involves a fundamental rethinking and redesign of business processes to achieve improvements in critical measures of performance?

Accepted Answer

Reengineering involves a fundamental rethinking and redesign of business processes to achieve improvements in critical measures of performance. It is a comprehensive approach that involves analyzing and optimizing workflows, systems, and structures to achieve improved efficiency, productivity, and quality. Strategy, product differentiation, and product designing may involve some changes to business processes, but they do not necessarily involve the fundamental rethinking and redesign that is characteristic of reengineering.

Question 4

What is the term for an organization's ability to achieve lower costs relative to competitors through productivity and efficiency improvements, elimination of waste, and tight cost control?

Accepted Answer

The term for an organization's ability to achieve lower costs relative to competitors through productivity and efficiency improvements, elimination of waste, and tight cost control is cost leadership. Cost leadership is a business-level strategy that aims to achieve the lowest production or operational costs and, therefore, be able to offer the lowest prices compared to competitors while maintaining a reasonable profit margin.

Question 5

Magic Corporation manufactures water toys. It plans to grow by producing high-quality water toys that are delivered in a timely manner. There are a number of other manufacturers who produce similar water toys. Magic believes that continuously improving its manufacturing processes and re-engineering processes to downsize and eliminate excess capacity are critical to implementing its strategy. Which of the following best describes Magic's strategy?

Accepted Answer

Magic Corporation's strategy is best described as cost leadership. The company plans to grow by producing high-quality water toys that are delivered in a timely manner, and it believes that continuously improving its manufacturing processes and re-engineering processes to downsize and eliminate excess capacity are critical to implementing its strategy. This focus on cost reduction and efficiency is characteristic of a cost leadership strategy.

Question 6

An organization which uses product differentiation strategy will charge higher prices.

Accepted Answer

Product differentiation is a marketing strategy used to make a product more attractive compared to competitors. This differentiation can be achieved through various methods like quality improvements, design changes, unique features, or better customer service. As a result, the product becomes more valuable in the eyes of the consumers, and hence the organization can charge a higher price. Hence, the statement is true.

Question 7

Strategy describes how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its overall objectives.

Accepted Answer

This statement accurately describes the purpose and definition of strategy.

Question 8

Stewart Corporation plans to grow by offering a sound system, the SS3000, that is superior and unique from the competition. Stewart believes that putting additional resources into R&D and staying ahead of the competition with technological innovations is critical to implementing its strategy. Which of the following terms best describes Stewart's strategy?

Accepted Answer

Stewart Corporation's strategy focuses on offering a unique and superior product, which aligns with product differentiation.

Question 9

Bosely Corporation is reviewing its business strategy. The first step for Bosely is to perform an industry analysis. You have been hired to help the company go through the strategy formulation process.
Required:
To perform the industry analysis, what areas should Bosely focus on and give at least one example of how Bosely can effectively deal with each area.

Accepted Answer

The answer of Bosely Corporation is reviewing its business strategy....

Question 10

What is the term that describes an organization's ability to offer products or services that are perceived by its customers as being superior and unique relative to those of its competitors?

Accepted Answer

Product differentiation refers to an organization's ability to offer products or services that are different and perceived as superior or unique by its customers, which gives it a competitive advantage over its rivals. Strategy refers to the overall plan or approach adopted by an organization to achieve its goals, while cost leadership refers to a strategy that involves offering products or services at a lower price than competitors. The balanced scorecard is a management tool used to measure an organization's performance against its strategic objectives.

Question 11

The cost leadership strategy is for products and services that are similar to a competitors products and services.

Accepted Answer

The cost leadership strategy focuses on offering products or services at a lower cost than competitors, even if they are similar.

Question 12

Which of the following statements best define strategy?

Accepted Answer

Strategy is about creating value for customers and differentiation from competitors. Option A captures this definition accurately. Options B and C capture important components of strategy, but are not comprehensive enough. Option D is incorrect and irrelevant to the definition of strategy.

Question 13

Which of the following focuses on these five factors: competitors, potential entrants to the market, equivalent products, bargaining power of customers, and bargaining power of suppliers?

Accepted Answer

Industry analysis is the examination of the five forces that affect competition in a particular industry, namely competitors, potential entrants to the market, equivalent products, bargaining power of customers, and bargaining power of suppliers. The other options are not directly related to this type of analysis.

Question 14

Explain the term cost leadership. What are the possible ways through which a company would try to become a cost leader? How far is it desirable to implement cost reduction measures?

Accepted Answer

The answer of Explain the term cost leadership. What are...

Question 15

An organization that is using the product differentiation approach would most likely do which of the following?

Accepted Answer

An organization using the product differentiation approach focuses on creating unique and innovative products and developing effective promotional campaigns to increase customer loyalty and charge higher prices. This approach involves emphasizing the unique features and benefits of the product to differentiate it from competitors and justify a higher price point.

Question 16

In general, profit potential of an organization decreases with ________.

Accepted Answer

Greater competition within an industry and the presence of stronger potential entrants both contribute to reducing the profit potential of an organization. High competition pressures margins and prices, while strong potential entrants threaten market share and can intensify competition further.

Question 17

The cost leadership strategy is best for a company if the engineering staff is more skilled at creatively designing new products than at making process improvements.

Accepted Answer

The cost leadership strategy is best for a company if the engineering staff is more skilled at making process improvements than at creatively designing new products.

Question 18

Higher selling prices, rather than unique products or services, provide a competitive advantage for the cost leader companies.

Accepted Answer

Lower selling prices, rather than unique products or services, provide a competitive advantage for the cost leader companies.

Question 19

Which of the following statements best define a product differentiation strategy?

Accepted Answer

Product differentiation strategy focuses on differentiating an organization's products or services from its competitors by offering unique and superior perceived value to customers. This leads to a competitive advantage and increased customer loyalty. Options A and C talk about differentiation through prices, which is not the focus of product differentiation strategy. Option B describes a cost leadership strategy, which is different from a product differentiation strategy.

Question 20

An organization that is using the cost leadership approach would ________.

Accepted Answer

An organization using the cost leadership approach focuses on productivity through efficiency improvements to offer products or services at a lower cost than competitors. It does not incur costs for innovative R&D or provide products at a higher cost than competitors. Bringing products to market rapidly may be a strategy, but it does not necessarily align with cost leadership.

Quiz 12: Strategy, Balanced Scorecard, and Strategic Profitability Analysis