Question 1

Offensive competitive tactics include:
A)Threat of retaliation
B)Creating barriers to imitation
C)Seeking first-mover advantages
D)Collaborative tactics
E)Avoiding direct competition

Accepted Answer

The answer of Offensive competitive tactics include:
A)Threat of retaliation
B)Creating barriers...

Question 2

During the decline stage of the industry life cycle:
A)Tight cost controls leading to efficiency are essential
B)Products are highly differentiated
C)Competition is no longer based on price
D)New entrants are common
E)Demand is increasing

Accepted Answer

During the decline stage, sales and profits decrease as demand for the product declines. In order to maintain profitability, tight cost controls and efficiency measures are necessary to reduce expenses and maximize profits. This may involve reducing staff, cutting back on marketing campaigns, and streamlining operations as much as possible. Therefore, the best choice among the given options is A.

Question 3

A multidomestic approach to international markets:
A)Involves the production and marketing of one product design throughout the world
B)Involves custom tailoring of products and services around individual market needs
C)Is almost always preferable to a global strategy
D)Is almost always less costly than a global strategy
E)Is only appropriate when economic efficiencies are possible

Accepted Answer

A multidomestic approach involves adapting products and services based on individual market needs, rather than offering a standardized product worldwide. This approach recognizes cultural, economic, and regulatory differences across countries and tailors strategies accordingly. While it may require additional costs for adaptation, it can often lead to greater success in local markets.

Question 4

An organization would like to expand overseas.Its managers have considered pursing the expansion through a joint venture,but they are concerned that using a joint venture would limit the amount of profits they can make and also limit their control of the venture.Which of the following global expansion tactics should you suggest to these managers?
A)Exporting
B)Transnational symbiotic venturing
C)A greenfield venture
D)Franchising
E)Licensing

Accepted Answer

A greenfield venture would allow the organization to have complete control over the new business and the potential to earn high profits. While a joint venture may have its benefits, it may not be the best option if the managers are concerned about control and profit limitations. Exporting, franchising, and licensing involve partnering with established businesses, and may not provide the level of control or potential for high profits that the organization is looking for. Transnational symbiotic venturing is not a commonly utilized expansion tactic and may not be suitable for this particular organization.

Question 5

Describe the strategic flexibility tactic and how it is pursued.

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Question 6

During the maturity stage of the industry life cycle:
A)Product differentiation becomes easier to establish
B)Customers focus on product quality and availability
C)Firms have an opportunity to create entry barriers
D)High-volume production tends to dominate manufacturing strategy
E)First-mover advantages are commonly available

Accepted Answer

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Question 7

What is a cost leadership strategy? How might a firm pursue it? What are some of the risks associated with this strategy?

Accepted Answer

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Question 8

How can a firm be successful by pursuing a differentiation strategy? What are some of the risks associated with a differentiation strategy?

Accepted Answer

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Question 9

A firm pursuing a "blue ocean" strategy:
A)Will collaborate with competitors to create a stronger market position
B)Will utilize a best cost generic strategy,but in a completely unique way
C)Will threaten to retaliate against competitive actions
D)Will erect huge barriers to competition
E)Will pursue political lobbying

Accepted Answer

A "blue ocean" strategy involves creating uncontested market space and making the competition irrelevant by creating a new market space. To do that, a firm needs to differentiate itself from competitors and offer something completely unique. Utilizing a best cost generic strategy in a unique way can help a firm do that. Collaborating with competitors or erecting huge barriers to competition are more traditional strategies associated with a "red ocean" approach. Pursuing political lobbying is not directly related to creating new market space or making competition irrelevant. Threatening to retaliate against competitive actions is a defensive strategy, which does not align with the proactive nature of a "blue ocean" approach.

Question 10

The risks associated with pursuing a cost leadership strategy include all of the following except:
A)Preoccupation with costs may lead a firm not to detect required product changes
B)The firm's products are likely to become targets for imitators
C)Efforts to cut costs could lead to unsafe products
D)Cost cutting could lead to products of very poor quality
E)Large investments could cause reluctance to change

Accepted Answer

Imitation is a common risk for all business strategies, not just cost leadership. Cost leadership primarily involves minimizing costs to offer products at competitive prices, but this doesn't inherently make products more susceptible to imitation than other strategies.

Question 11

What are the key elements in defining a business model?

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Question 12

Market penetration entails:
A)Vertical integration combined with horizontal integration
B)Modification of existing products to create new market segments
C)Acquisition of an organization in the same line of business
D)Forming a strategic alliance with a firm in a new business
E)Increasing market share in the current business through advertising,promotions,or a stepped-up sales effort

Accepted Answer

Market penetration refers to increasing market share in the current business through various measures such as advertising, promotions, or a stepped-up sales effort. It does not involve vertical or horizontal integration, modification of existing products, acquisition of another organization or forming a strategic alliance in a new business.

Question 13

A firm that caters to a very specific segment of its market is pursuing which generic strategy?
A)Differentiation
B)Focus
C)Cost leadership
D)Best cost
E)None of the above

Accepted Answer

The focus strategy involves targeting a specific segment or niche of the market and catering to their unique needs or preferences. This allows the firm to differentiate themselves from competitors and potentially charge a premium price.

Question 14

A best cost strategy is most like which of the other generic business strategies?
A)Differentiation
B)Differentiation focus
C)Cost leadership
D)Cost focus
E)Differentiation combined with cost leadership

Accepted Answer

A best cost strategy involves providing customers with better value by focusing on both quality and cost, which aligns closely with a combination of differentiation (offering unique product attributes that are valued by customers) and cost leadership (offering products at the lowest possible cost). This strategy aims to attract customers by offering products that are not only less expensive but also of higher quality compared to competitors.

Question 15

During the introduction stage of the industry life cycle:
A)Demand for a product is fairly steady
B)Research and development activities are less important than activities to gain market share
C)Firms have an opportunity to create barriers to entry
D)Producers are generally highly profitable
E)First-mover advantages are unimportant

Accepted Answer

During the introduction stage, there are often opportunities for firms to create barriers to entry for potential competitors, such as by securing patents or developing strong brand recognition. This can help establish a dominant market position and increase profitability. A and E are incorrect because demand may be low and first-mover advantages can be important during this stage. Additionally, B is incorrect because research and development activities are still important in order to improve the product and meet customer needs.

Question 16

The most important elements in a business model include all of the following except:
A)Selecting a growth strategy
B)Verifying that sufficient demand exists for a given product at a given price in a particular market
C)Selecting unique features and technologies to be imbedded into the products or services
D)Determining how to capture a portion of the value created in terms of revenues and profits
E)Identifying market segments to be targeted

Accepted Answer

Selecting a growth strategy, while important for the development and expansion of a business, is not considered a core element of a business model. A business model primarily focuses on how a company creates, delivers, and captures value. This includes understanding the demand, unique value proposition, revenue generation, and target market segments. Growth strategies are more about scaling and expanding the business after the model has been established.

Question 17

Market development entails:
A)Seeking new market segments or new applications for existing products
B)Modification of existing products to create new market segments
C)Acquisition of an organization in the same line of business
D)Forming a strategic alliance with a firm in a new business
E)Investments in resources that may increase market share in the current business

Accepted Answer

Market development involves identifying and targeting new market segments or finding new applications for existing products. This can be done by conducting market research and analyzing customer needs and preferences. It does not involve modifying existing products, acquiring another organization, forming a strategic alliance, or investing in resources to increase market share in the current business, which are all strategies for different types of business development.

Question 18

Toward the end of the growth stage of the industry life cycle:
A)Demand for products falls
B)A competitive shakeout usually occurs
C)Entry barriers play no role
D)Competition tends to focus on tight cost controls
E)Differentiation is not possible

Accepted Answer

During the end of the growth stage, the industry becomes saturated with competitors leading to intense competition. This often results in a competitive shakeout, where weaker players are forced out of the market or acquired by stronger companies, leading to consolidation.

Question 19

When does a global approach to an international product/market strategy make the most sense?

Accepted Answer

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Quiz 5: Business-Level Strategies

Offensive competitive tactics include:

During the decline stage of the industry life cycle:

A multidomestic approach to international markets:

Describe the strategic flexibility tactic and how it is pursued.

During the maturity stage of the industry life cycle:

What is a cost leadership strategy? How might a firm pursue it? What are some of the risks associated with this strategy?

How can a firm be successful by pursuing a differentiation strategy? What are some of the risks associated with a differentiation strategy?

A firm pursuing a "blue ocean" strategy:

The risks associated with pursuing a cost leadership strategy include all of the following except:

What are the key elements in defining a business model?

Market penetration entails:

A firm that caters to a very specific segment of its market is pursuing which generic strategy?

A best cost strategy is most like which of the other generic business strategies?

During the introduction stage of the industry life cycle:

The most important elements in a business model include all of the following except:

Market development entails:

Toward the end of the growth stage of the industry life cycle:

When does a global approach to an international product/market strategy make the most sense?