Question 1

More recent work in the area of strategic management regarding assertions about being stuck in the middle
A)supports the argument that firms that attempt to simultaneously pursue cost leadership and product differentiation will find themselves at a competitive disadvantage.
B)contradicts the argument and finds that firms that successfully pursue cost leadership and product differentiation simultaneously can often expect to gain a sustained competitive advantage.
C)partially contradicts the argument and finds that firms that successfully simultaneously pursue cost leadership and product differentiation can only expect to gain a temporary competitive advantage.
D)partially contradicts the argument and finds that only firms in certain select industries can successfully simultaneously pursue cost leadership and product differentiation and gain a temporary competitive advantage.

Accepted Answer

More recent work in strategic management suggests that firms can successfully pursue both cost leadership and product differentiation strategies simultaneously and gain a sustained competitive advantage. This is often referred to as a "hybrid" strategy and involves leveraging a unique set of resources and capabilities to provide customers with differentiated products or services at a lower cost than competitors. Examples of firms successfully pursuing a hybrid strategy include Southwest Airlines and Toyota.

Question 2

The Lockheed Corporation Skunk Works is an example of a(n)
A)cross-divisional or cross-functional team.
B)M-form structure.
C)U-form structure.
D)multidivisional structure.

Accepted Answer

The Lockheed Corporation Skunk Works is an example of a cross-divisional or cross-functional team, designed to work on advanced or secret projects by bringing together diverse expertise and skills from across the organization.

Question 3

A ________ exists when firms are committed to engage in several related product-differentiation strategies simultaneously.
A)policy of substitution
B)policy of extrapolation
C)policy of exploration
D)policy of experimentation

Accepted Answer

A policy of experimentation involves firms committing to engage in several related product-differentiation strategies simultaneously, allowing them to explore various market segments and adapt their offerings based on consumer response and market dynamics.

Question 4

Firms pursuing a differentiation strategy often use temporary cross-divisional and cross-functional teams to manage the development and implementation of new,innovative and highly differentiated products.

Accepted Answer

This is true, as temporary cross-divisional and cross-functional teams can bring together a diverse set of skills and expertise to effectively manage and execute a differentiation strategy.

Question 5

While the U-form structure for a firm pursuing cost leadership is relatively simple,the U-form structure for a firm implementing a product-differentiation strategy can be somewhat more complex.

Accepted Answer

A product-differentiation strategy typically requires more departments and functions, such as research and development, marketing, and design, to create and promote unique products or services. This can lead to a more complex U-form structure.

Question 6

While cost leadership requires rewards for cost reduction,product differentiation requires rewards for ________.
A)creative flair
B)efficiency
C)quantitative goals
D)production goals

Accepted Answer

Product differentiation is all about standing out from the competition by offering unique and creative products or services. Therefore, rewards for product differentiation should be given to employees who show creative flair and come up with innovative ideas to differentiate the company's products. Option B, C, and D do not align with the concept of product differentiation.

Question 7

Firms able to successfully differentiate their products and services are likely to see a decrease in their volume of sales.

Accepted Answer

Firms that successfully differentiate their products and services are likely to see an increase in their sales volume. This is because differentiation creates a unique selling proposition, making the product or service more attractive to customers and reducing competition.

Question 8

Cross-functional product development teams are suitable for a firm pursuing a ________ strategy.
A)cost-leadership
B)confrontation
C)product-differentiation
D)stuck-in-the-middle

Accepted Answer

Cross-functional product development teams are a key aspect of a product differentiation strategy, as they help bring together expertise and knowledge from different functional areas to create innovative and unique products that stand out in the market. Cost-leadership strategy focuses on reducing costs and increasing efficiency, while confrontation strategy involves directly challenging competitors. Stuck-in-the-middle strategy refers to a situation where a company is unable to effectively pursue either a cost leadership or product differentiation strategy.

Question 9

Recent research shows that firms can simultaneously implement cost-leadership and product-differentiation strategies if they learn how to manage the ________ inherent in these two strategies.
A)consistencies
B)similarities
C)contradictions
D)superfluousness

Accepted Answer

Cost-leadership and product-differentiation strategies are often seen as contradictory as one focuses on reducing costs while the other emphasizes creating unique products that justify premium prices. Therefore, firms that can effectively manage these contradictions can achieve both strategies simultaneously.

Question 10

More recent work contradicts the argument about being "stuck in the middle" and suggests that firms that are successful in both cost leadership and product differentiation often can expect to gain a sustained competitive advantage.

Accepted Answer

Recent work suggests that firms can achieve sustained competitive advantage by being successful in both cost leadership and product differentiation, contrary to the argument about being "stuck in the middle".

Question 11

McDonald's is an excellent example of a firm that simultaneously employs both a product-differentiation and a cost-leadership strategy since their product differentiation based on cleanliness,consistency and fun in its fast food outlets allowed the company to become the market share leader in the industry and to reduce its costs.

Accepted Answer

McDonald's has successfully implemented a product differentiation strategy through its consistent and fun brand image, while also utilizing cost-leadership techniques such as standardized food preparation processes and efficient supply chain management. This has allowed them to remain a leader in the fast food industry while keeping costs low.

Question 12

According to Coach's website, the company has built a distinctive style and prestigious image over the past 40 years to develop a reputation as "America's preeminent designer, producer, and marketer of fine accessories and gifts for women and men including handbags, business cases, luggage and travel accessories, wallets, outerwear, eyewear, gloves, scarves and fine jewelry." Coach employs a multi-channel distribution channel to reach its customers, including company-owned stores and boutiques in the stores of prominent specialty retailers both within the United States and abroad, and the company operates an online store. Consumers who purchase coach products are generally willing to pay the premium price due to the superior quality of Coach's products as well as the perceived prestige of owning a Coach product. Coach stresses these features in its advertising campaigns and regularly allows movies and television shows to favorably feature Coach products in appropriate scenes. Over the last five years. Coach has partnered with automobile manufacturers such as Lexus to produce automobiles with Coach interiors. In an effort to expand its international reach, Coach intends to increase its international distribution and is expanding into Japan through Coach Japan, Inc., a joint venture with a local company that will allow Coach to control international distribution and to maintain a consistent brand strategy domestically and abroad.
-If Coach had an organizational structure that used cross-functional teams,the members of which reported not only to their functional boss (i.e.the head of production)but also to the head of the team,Coach could be said to be using which organizational structure?
A)product divisional
B)matrix
C)U-form
D)multi-domestic

Accepted Answer

The use of cross-functional teams where members report to both their functional boss and the team leader indicates a matrix organizational structure.

Question 13

Is it possible for a firm to implement a cost-leadership and product-differentiation strategy simultaneously?

Accepted Answer

The answer of Is it possible for a firm to...

Question 14

Discuss the similarities and differences of the organizational structures used by firms pursuing a cost-leadership and a product-differentiation strategy and discuss the importance of broad decision-making authority within a product-differentiation strategy.

Accepted Answer

The answer of Discuss the similarities and differences of the...

Question 15

According to Coach's website, the company has built a distinctive style and prestigious image over the past 40 years to develop a reputation as "America's preeminent designer, producer, and marketer of fine accessories and gifts for women and men including handbags, business cases, luggage and travel accessories, wallets, outerwear, eyewear, gloves, scarves and fine jewelry." Coach employs a multi-channel distribution channel to reach its customers, including company-owned stores and boutiques in the stores of prominent specialty retailers both within the United States and abroad, and the company operates an online store. Consumers who purchase coach products are generally willing to pay the premium price due to the superior quality of Coach's products as well as the perceived prestige of owning a Coach product. Coach stresses these features in its advertising campaigns and regularly allows movies and television shows to favorably feature Coach products in appropriate scenes. Over the last five years. Coach has partnered with automobile manufacturers such as Lexus to produce automobiles with Coach interiors. In an effort to expand its international reach, Coach intends to increase its international distribution and is expanding into Japan through Coach Japan, Inc., a joint venture with a local company that will allow Coach to control international distribution and to maintain a consistent brand strategy domestically and abroad.
-One feature of Coach's compensation policies is likely to be
A)rewards for cost reduction.
B)rewards for efficiency.
C)rewards for creative flair.
D)rewards for manufacturing efficiency.

Accepted Answer

The passage does not provide information about Coach's compensation policies, but it does suggest that creativity is valued in the company's products, as they are known for their distinctive style and prestige. Therefore, it is reasonable to assume that rewards for creative flair may be a feature of Coach's compensation policies.

Question 16

In developing a compensation policy used to implement a product-differentiation strategy,firms will
A)hold individuals responsible for experiments that fail.
B)punish individuals for taking risks when their projects are not successful.
C)simultaneously use multiple dimensions to examine employee performance.
D)provide appropriate incentives for managers and employees to reduce costs.

Accepted Answer

In a product-differentiation strategy, it is important to evaluate employee performance on multiple dimensions, such as creativity, innovation, and customer satisfaction. These dimensions may not be easily quantifiable, and therefore, require a comprehensive evaluation system that includes both financial and non-financial rewards. Punishing individuals for taking risks and holding them responsible for experiments that fail could create a fear of failure and stifle creativity. Providing appropriate incentives for managers and employees to reduce costs may be more appropriate for a cost-leadership strategy.

Question 17

Firms that are stuck in the middle attempt to sell
A)high-priced products and gain small market share.
B)low-priced products and gain large market share.
C)high-priced products and gain a large market share.
D)medium-priced products and gain medium market share.

Accepted Answer

Firms that are stuck in the middle attempt to offer medium-priced products and gain a medium market share. This strategy is often unsuccessful because it fails to differentiate the firm's products from those of its competitors, and it does not offer the low prices or high quality that would attract a large share of the market.

Question 18

Product differentiation can lead to high market share and low costs.

Accepted Answer

Product differentiation allows a company to create a unique offering that stands out from competitors, giving it a competitive advantage and potentially attracting more customers. This can lead to increased market share and the ability to charge higher prices, which can offset any additional costs associated with creating a differentiated product. Additionally, if the differentiation is successful, it can create barriers to entry for other competitors, further solidifying the company's market position and reducing competition, which can ultimately lead to lower costs.

Question 19

Recent research suggests that ________ firms must have competitive levels of cost to survive.
A)low-cost
B)all
C)domestic
D)product-differentiation

Accepted Answer

The answer of Recent research suggests that ________ firms must...

Quiz 5: Product Differentiation

More recent work in the area of strategic management regarding assertions about being stuck in the middle

The Lockheed Corporation Skunk Works is an example of a(n)

A ________ exists when firms are committed to engage in several related product-differentiation strategies simultaneously.

Firms pursuing a differentiation strategy often use temporary cross-divisional and cross-functional teams to manage the development and implementation of new,innovative and highly differentiated products.

While the U-form structure for a firm pursuing cost leadership is relatively simple,the U-form structure for a firm implementing a product-differentiation strategy can be somewhat more complex.

While cost leadership requires rewards for cost reduction,product differentiation requires rewards for ________.

Firms able to successfully differentiate their products and services are likely to see a decrease in their volume of sales.

Cross-functional product development teams are suitable for a firm pursuing a ________ strategy.

Recent research shows that firms can simultaneously implement cost-leadership and product-differentiation strategies if they learn how to manage the ________ inherent in these two strategies.

More recent work contradicts the argument about being "stuck in the middle" and suggests that firms that are successful in both cost leadership and product differentiation often can expect to gain a sustained competitive advantage.

Is it possible for a firm to implement a cost-leadership and product-differentiation strategy simultaneously?

Discuss the similarities and differences of the organizational structures used by firms pursuing a cost-leadership and a product-differentiation strategy and discuss the importance of broad decision-making authority within a product-differentiation strategy.

In developing a compensation policy used to implement a product-differentiation strategy,firms will

Firms that are stuck in the middle attempt to sell

Product differentiation can lead to high market share and low costs.

Recent research suggests that ________ firms must have competitive levels of cost to survive.