Strategic Management Chapter 4

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Business-level strategies detail commitments and actions taken to provide value to customers and gain competitive advantage by exploiting core competencies in

specific product markets.

A firm's core strategy is its _____ strategy.

business

When selecting a business level strategy, the firm must determine all of the following EXCEPT

Why should these customers' needs be satisfied?

The three dimensions of a firm's relationships with customers include all the following EXCEPT

exclusiveness.

Which of the following is TRUE?

Customer loyalty has a positive relationship with firm profitability.

The ____ dimension of relationships with customers is particularly important for social networking site such as Facebook and MySpace.

reach

Viewing the world through the customer's eyes and constantly seeking ways to create more value for the company enhances

affiliation with the customer

Before the firm decides what products to offer and what benefits and features they will have, the firm must decide all the following questions EXCEPT

When the customer's needs should be satisfied.

In order to meet and exceed customer's expectations, firms must

continuously improve, innovate, and upgrade their core competencies.

Business-level strategies are concerned specifically with

creating differences between the firm's position and its competition.

Which of the following are central to implementing value-creating strategies and thereby satisfying customers' needs?

Core competencies

Strategic fit among many activities (in an activity map) is fundamental to

sustainability of a firm's competitive advantage.

All of the following are considered generic business-level strategies EXCEPT

product diversification.

A company using a narrow target market in its business strategy is

limiting the group of customer segments served.

As the television industry has changed in the last few decades from just three major networks to a multiplicity of networks, one of the major aspects of business strategy for the newer networks is _____ than the traditional networks.

narrower target market

The effectiveness of any of the generic business-level strategies is contingent upon

the match between the opportunities and threats in its external market and the strengths of its internal environment.

A cost leadership strategy provides goods or services with features that are

acceptable.

A cost leadership strategy targets the industry's _____ customers.

most typical

Research suggests that having a competitive advantage in _____ creates more value in the cost leadership strategy than it does in the differentiation strategy.

logistics

A company pursuing the differentiation or focused differentiation strategy would tend to

develop flexible systems that allow rapid response to customers changing needs.

When the costs of supplies increase in an industry, the low-cost leader

may be the only firm able to pay the higher prices and continue to earn average or above-average returns.

Ever improving levels of efficiency enhance profit margins for a cost leader.This effects which of the five forces of industry structure most directly?

Potential entrants

The typical risks of a cost leadership strategy include

production and distribution processes becoming obsolete.

When a firm is able to produce non-standardized (that is, distinctive) products for customers who value differentiated features more than they value low cost, the firm is successfully implementing

a differentiation strategy.

A firm successfully implementing a differentiation strategy would expect

to charge premium prices.

The products or services that are differentiated from others have qualities that are

perceived by the customer to add value for which they will pay a premium.

All of the following are examples of differentiated products EXCEPT

store brand beef and pork.

The use of a differentiation strategy would be expected to be LEAST effective in which of the following markets?

Commodity goods

All of the following are ways that a good or service can be differentiated EXCEPT

Economies of scale and efficient operations

The differentiation strategy can be effective in controlling the power of rivalry with existing competitors in an industry because

customers are loyal to brands that are differentiated in meaningful ways.

Which of the following is NOT a value-creating activity associated with the differentiation strategy?

Develop policies to ensure efficient hiring and retention to keep costs low and implement training to ensure high employee efficiency

A differentiation strategy can be effective in controlling the power of substitutes in an industry because

customers develop brand loyalty

The typical risks of a differentiation strategy do NOT include which of the following?

Suppliers of raw materials erode the firm's profit margin with price increases.

When implementing a focus strategy, the firms seeks to

serve the specialized needs of a market segment.

The focused differentiation strategy differs from the differentiation strategy in that

focused differentiators target a narrower customer market.

The risks of a focus strategy include

a competitor's ability to use its core competencies to out-focus the focuser by serving an even more narrowly defined segment.

Focus strategies are

faced with additional types of risks than are industry-wide strategies.

Firms use the integrated cost leadership/differentiation strategy because

most consumers want to pay a low price for products with somewhat highly differentiated features.

The integration of a cost leadership and a differentiation strategy

is challenging because it increases the number of value chain activities and support functions in which the firm must become competent

Target's brand promise "Expect More. Pay Less" and appeal to higher-income, fashion conscious discount shoppers illustrates the _______ strategy.

integrated cost leadership/differentiation

Three sources of flexibility in completing primary and support activities are particularly useful for firms using the integrated strategy. These are

Flexible Manufacturing Systems, Total Quality Management, and Information Networks.

The benefit of a flexible manufacturing system is that

the lot size needed to manufacture a firm's product efficiently is reduced.

A flexible manufacturing system is

a computer-controlled process that is used to produce a variety of products in moderate, flexible quantities with minimal human intervention.

By linking companies with their suppliers, distributors, and customer, _____ provide a company with flexibility.

Information networks

TQM is most helpful to firms following the _____ business strategy.

integrated cost-leadership/differentiation

The term "stuck in the middle"

means that the firm's cost structure is not low enough to allow it to attractively price its products and that its products are not sufficiently differentiated to create value for its target customer.

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