Question 1

An overall low-cost position enables a firm to achieve ________ returns despite strong competition.

Accepted Answer

A)   below average
B)   average
C)   no
D)   above averageE) A) and B)
F) All of the above

Question 2

A platform business is like a matchmaker in that it can bring together buyers and sellers.An example of a successful platform provider is Facebook.By attracting and retaining users through expanding services it differentiates itself from more narrowly-focused competitors such as Twitter.

Accepted Answer

A) True 
 B)False

Question 3

A need for turnaround occurs only during the maturity or declining stage of the life cycle.

Accepted Answer

A) True 
 B)False

Question 4

Airlines such as Emirates exploit the profit pool for competitive advantage by adding fees for a variety of services such as access to airport lounges.

Accepted Answer

A) True 
 B)False

Question 5

Zulily protects itself from buyer power and intense rivalry from competitors by

Accepted Answer

A)   increasing the bargaining power of its customers.
B)   paying close attention to costs.
C)   increasing costs.
D)   increasing the buyer power.E) B) and C)
F) None of the above

Question 6

Ryanair and Spirit Airlines depend upon revenue from services not related to the actual flight.These services increase their

Accepted Answer

A)   costs.
B)   services.
C)   profit pool.
D)   difficulties.E) A) and B)
F) C) and D)

Question 7

Which of the following is not a potential pitfall of an integrated overall low cost and differentiation strategy?

Accepted Answer

A)   Firms that target too large a market that causes unit costs to increase.
B)   Firms that underestimate the expenses associated with coordinating value-creating activities in the extended value chain.
C)   Firms that fail to attain both strategies may end up with neither and become stuck-in-the-middle.
D)   Firms that miscalculate sources of revenue and profit pools in the company industry.E) None of the above
F) All of the above

Question 8

Most turnarounds require a firm to carefully analyze its relevant environments.The ________ analysis leads to identification of market segments or customer groups that may still find the product attractive.

Accepted Answer

A)   external
B)   internal
C)   global
D)   environmentalE) All of the above
F) B) and D)

Question 9

A platform business such as Airbnb leverages data analytics to differentiate its offer from that of competitors such as VRBO.

Accepted Answer

A) True 
 B)False

Question 10

Piecemeal productivity improvements can be used by a mature business in need of a turnaround.

Accepted Answer

A) True 
 B)False

Question 11

Proctor and Gamble announced that it would sell off or close down up to 100 of its brands.This is an example of which turnaround strategy used by successful companies?

Accepted Answer

A)   asset and cost surgery
B)   selective product and market pruning
C)   piecemeal productivity improvements
D)   global expansionE) C) and D)
F) All of the above

Question 12

BlackBerry lost its competitive advantage by 2016 because it

Accepted Answer

A)   did not deliver innovations to respond to changing market demand.
B)   developed a highly performant just-in-time delivery system.
C)   did not reward its employees.
D)   let suppliers have dominant power.E) B) and C)
F) None of the above

Question 13

The experience curve is a factor central to an overall cost leadership strategy and refers to how business learns to increase costs as it gains experience with production processes.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements about the introduction stage of the market life cycle is true?

Accepted Answer

A)   It produces relatively large, positive cash flows.
B)   Strong brand recognition seldom serves as an important switching cost.
C)   Market share gains by pioneers are usually easily sustained for many years.
D)   Products offered by pioneers may be perceived as differentiated because they are new.E) A) and B)
F) A) and D)

Question 15

The market life cycle should be used for short-run forecasting because it provides a conceptual framework for understanding what changes typically occur over the life of an industry.

Accepted Answer

A) True 
 B)False

Question 16

Outright sales or sale and leaseback free up considerable cash and improve returns.This is an example of which turnaround strategy used by successful companies?

Accepted Answer

A)   asset and cost surgery
B)   selective product and market pruning
C)   piecemeal productivity improvements
D)   global expansionE) None of the above
F) B) and D)

Question 17

Atlas Door created competitive advantages in overall low cost and differentiation by creating ________ among value-chain activities.

Accepted Answer

A)   substitutes
B)   advantages
C)   disadvantages
D)   linkagesE) A) and C)
F) All of the above

Question 18

An overall ________ position enables a firm to achieve above-average returns because it protects firms against powerful buyers.

Accepted Answer

A)   differentiation
B)   low-cost
C)   focused
D)   high-costE) B) and D)
F) All of the above

Question 19

Which of the following is not a potential pitfall of a differentiation strategy?

Accepted Answer

A)   Uniqueness that is not valuable.
B)   The price premium is too high.
C)   All rivals share a common input or raw material.
D)   Perceptions of differentiation may vary between buyers and sellers.E) None of the above
F) All of the above

Question 20

Caterpillar uses data analytics to differentiate itself from competitors by providing information services.

Accepted Answer

A) True 
 B)False

Exam 5: Business-level Strategy: Creating and Sustaining Competitive Advantages

Piecemeal productivity improvements can be used by a mature business in need of a turnaround.

Correct AnswerverifiedShow Answer

Zulily protects itself from buyer power and intense rivalry from competitors by

Correct AnswerverifiedShow Answer

Which of the following is not a potential pitfall of an integrated overall low cost and differentiation strategy?

Correct AnswerverifiedShow Answer

Which of the following is not a potential pitfall of a differentiation strategy?

Correct AnswerverifiedShow Answer

An overall low-cost position enables a firm to achieve ________ returns despite strong competition.

Correct AnswerverifiedShow Answer

The experience curve is a factor central to an overall cost leadership strategy and refers to how business learns to increase costs as it gains experience with production processes.

Correct AnswerverifiedShow Answer

Outright sales or sale and leaseback free up considerable cash and improve returns.This is an example of which turnaround strategy used by successful companies?

Correct AnswerverifiedShow Answer

Ryanair and Spirit Airlines depend upon revenue from services not related to the actual flight.These services increase their

Correct AnswerverifiedShow Answer

A platform business is like a matchmaker in that it can bring together buyers and sellers.An example of a successful platform provider is Facebook.By attracting and retaining users through expanding services it differentiates itself from more narrowly-focused competitors such as Twitter.

Correct AnswerverifiedShow Answer

Atlas Door created competitive advantages in overall low cost and differentiation by creating ________ among value-chain activities.

Correct AnswerverifiedShow Answer

Which of the following statements about the introduction stage of the market life cycle is true?

Correct AnswerverifiedShow Answer

The market life cycle should be used for short-run forecasting because it provides a conceptual framework for understanding what changes typically occur over the life of an industry.

Correct AnswerverifiedShow Answer

BlackBerry lost its competitive advantage by 2016 because it

Correct AnswerverifiedShow Answer

A need for turnaround occurs only during the maturity or declining stage of the life cycle.

Correct AnswerverifiedShow Answer

Proctor and Gamble announced that it would sell off or close down up to 100 of its brands.This is an example of which turnaround strategy used by successful companies?

Correct AnswerverifiedShow Answer

Caterpillar uses data analytics to differentiate itself from competitors by providing information services.

Correct AnswerverifiedShow Answer

A platform business such as Airbnb leverages data analytics to differentiate its offer from that of competitors such as VRBO.

Correct AnswerverifiedShow Answer

An overall ________ position enables a firm to achieve above-average returns because it protects firms against powerful buyers.

Correct AnswerverifiedShow Answer

Most turnarounds require a firm to carefully analyze its relevant environments.The ________ analysis leads to identification of market segments or customer groups that may still find the product attractive.

Correct AnswerverifiedShow Answer

Airlines such as Emirates exploit the profit pool for competitive advantage by adding fees for a variety of services such as access to airport lounges.

Correct AnswerverifiedShow Answer

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