Question 1

A firm achieves differentiation parity ideally when

Accepted Answer

A)   it creates the same customer value as its competitors.
B)   its cost of production is higher than that of its competitors.
C)   it successfully sells its products and services at a higher price than its competitors.
D)   its product features and services are better than that of its competitors.E) B) and D)
F) A) and B)

Question 2

Which of the following best explains why a blue ocean strategy is difficult to implement?

Accepted Answer

A)   It requires the combination of fundamentally similar strategic positions-differentiation and low cost.
B)   It requires the reconciliation of fundamentally different strategic positions-differentiation and low cost.
C)   It requires the combination of fundamentally similar strategic positions-differentiation and strategic trade-offs.
D)   It requires the reconciliation of fundamentally different strategic positions-differentiation and strategic trade-offs.E) A) and D)
F) None of the above

Question 3

As it takes less and less time to produce the same output,learning curves usually

Accepted Answer

A)   go up.
B)   go down.
C)   stay the same.
D)   fluctuate.E) All of the above
F) A) and D)

Question 4

At a certain output level,the per-unit cost incurred by a firm to manufacture a product was $60.Once the cumulative output doubled,the cost per unit reduced to $54.All other factors remaining constant,the firm has been able to achieve a(n)

Accepted Answer

A)   80 percent learning curve.
B)   90 percent learning curve.
C)   60 percent learning curve.
D)   54 percent learning curve.E) None of the above
F) A) and B)

Question 5

While Aros Inc.incurs a cost of $20 for a pair of shoes,Shoes Cult Inc.,its competitor,manufactures a pair of shoes at $22.Both the companies are able to sell their shoes for a maximum of $30 per pair.Which of the following statements is true in this scenario?

Accepted Answer

A)   Both Aros and Shoes Cult have achieved differentiation parity.
B)   Aros is a cost-leader when compared to Shoes Cult.
C)   Aros has created a greater economic value than Shoes Cult.
D)   Shoes Cult has a competitive advantage over Aros.E) A) and B)
F) A) and C)

Question 6

A successfully implemented blue ocean strategy allows a firm to

Accepted Answer

A)   charge a higher price than the cost-leader in the industry.
B)   create lesser economic value than the differentiator in the industry.
C)   reduce its value gap beyond that created by the cost-leader in the industry.
D)   increase its price above that of the differentiator in the industry.E) A) and B)
F) A) and C)

Question 7

To initiate a strategic move that allows a firm to open up new and uncontested market space through value innovation,managers must address four key questions when formulating a blue ocean business strategy.These questions focus on

Accepted Answer

A)   increasing cost and maintaining perceived customer benefits.
B)   lowering cost and maintaining perceived customer benefits.
C)   lowering cost and increasing perceived customer benefits.
D)   increasing cost and increasing perceived customer benefits.E) A) and B)
F) A) and C)

Question 8

Which of the following is more of a value driver than a cost driver?

Accepted Answer

A)   superior customer service
B)   economies of scale
C)   learning-curve effects
D)   experience-curve effectsE) B) and D)
F) B) and C)

Question 9

When a firm combines experience based learning and process innovation,the firm

Accepted Answer

A)   jumps to a steeper learning curve.
B)   experiences an increase in per-unit cost.
C)   loses its competitive advantage.
D)   moves down the existing learning curve.E) A) and D)
F) A) and B)

Question 10

Which of the following statements accurately brings out the difference between economies of scale and economies of scope?

Accepted Answer

A)   Economies of scale refer to the decreases in per-unit cost with decreases in output, whereas economies of scope refer to the increases in per-unit cost with increases in output.
B)   Economies of scale result in decreasing returns to scale, and economies of scope result in constant returns to scale.
C)   Economies of scope are the savings that come from producing two or more outputs from the same resources, whereas economies of scale are decreases in per-unit cost with increases in output.
D)   Economies of scope are realized when a firm operates at the minimum efficient scale, whereas economies of scale are realized when the firm operates beyond the minimum efficient scale.E) B) and D)
F) A) and B)

Question 11

Help Yourself Inc.publishes many types self-help books.Recently,the consumer demand for winter gardening books has increased significantly.Although Help Yourself has limited production facilities,it has increased the production of these books to meet this demand.It hopes to get books to the market faster than its closest competitor,who is also increasing the production of winter gardening books.Which of the following aspects of business-level strategy has Help Yourself accomplished?

Accepted Answer

A)   It has enhanced its internal strengths.
B)   It has eliminated its weaknesses.
C)   It has exploited external opportunities.
D)   It has avoided external threats.E) None of the above
F) A) and C)

Question 12

Both Blue Horizons Electronics Inc.and CLR Inc.have achieved cost parity in the television market.To gain and sustain a competitive advantage against CLR,Blue Horizons Electronics should

Accepted Answer

A)   achieve differentiation parity with CLR.
B)   keep its value gap lower than that of CLR.
C)   create greater perceived economic value than CLR.
D)   increase its cost of production to more than that of CLR.E) None of the above
F) A) and D)

Question 13

A firm experiences diseconomies of scale when it

Accepted Answer

A)   has a constant return to scale.
B)   moves down the experience curve.
C)   produces at an output level beyond the minimum efficient scale.
D)   has a steep learning curve when compared to its competitors.E) A) and B)
F) A) and C)

Question 14

In the multiplex industry,Vibrant Movies Inc.is an upscale multiplex that focuses on superior customer experience.The firm charges premium prices for its movie tickets and services.Global Cine Inc.,in contrast,charges the lowest price in the industry with its no-frills approach.In between these two segments is True Movies Inc.,which offers a customer experience comparable to that of Vibrant Movies at a price almost as low as that of Global Cine.What strategy is True Movies pursuing in this scenario?

Accepted Answer

A)   liquidation strategy
B)   product diversification strategy
C)   market penetration strategy
D)   blue ocean strategyE) A) and B)
F) A) and C)

Question 15

Which of the following scenarios would threaten a firm that uses a differentiation strategy?

Accepted Answer

A)   The firm increases the uniqueness of its product without increasing its price.
B)   The firm adds product features that raise cost and perceived value.
C)   The firm's focus shifts to price rather than value-creating features.
D)   The firm's product has not established an acceptable standard of quality.E) A) and D)
F) C) and D)

Question 16

AccuroDisk Inc.manufactures external hard disks for $32 per unit,and the maximum price customers are willing to pay is $47 per unit.TD Storage Inc.is a competitor of AccuroDisk Inc.that produces external hard disks for $37 per unit,and customers are willing to pay a maximum price of $50 per unit.What does this imply?

Accepted Answer

A)   AccuroDisk and TD Storage share differentiation parity.
B)   TD Storage has a competitive advantage over AccuroDisk in terms of perceived value.
C)   AccuroDisk creates a greater economic value than TD Storage.
D)   TD Storage is a cost-leader when compared to AccuroDisk.E) All of the above
F) None of the above

Question 17

When a firm makes choices between a cost or value position to achieve competitive advantage,it is primarily involved in

Accepted Answer

A)   collective bargaining.
B)   strategic trade-offs.
C)   arbitration.
D)   mediation.E) A) and D)
F) All of the above

Question 18

Home Smart Inc.is a chain of supermarkets that sells its products at higher prices than its competitors.Yet,the supermarket chain has a large customer base due to its wide product portfolio and superior customer service.Which of the following generic business strategies has Home Smart adopted in this scenario?

Accepted Answer

A)   cost-leadership
B)   differentiation
C)   market penetration
D)   product diversificationE) A) and D)
F) None of the above

Question 19

To be cost-competitive,a firm should

Accepted Answer

A)   position itself below the productivity frontier.
B)   operate at the minimum efficient scale.
C)   attain the highest cost position.
D)   avoid moving on to a steeper experience curve.E) A) and D)
F) B) and D)

Question 20

Both BioThink Inc.and GD Pharma Inc.have discovered similar vaccines to prevent cancer.While GD Pharma's vaccine sells at $100 per unit,BioThink sells its vaccine at $90 per unit.This price differentiation has mainly been attributed to the companies' capital decisions.While BioThink used its retained earnings to develop the vaccine,GD Pharma borrowed funds from banks to develop the vaccine.Thus,GD Pharma pays a higher interest on its capital,which makes it necessary to price its vaccine higher.Thus,the key driver for BioThink's competitive advantage is

Accepted Answer

A)   low-cost input factors.
B)   economies of scale.
C)   superior customer service.
D)   availability of complements.E) None of the above
F) A) and B)

Exam 6: Business Strategy: Differentiation, Cost Leadership, and Blue Oceans

When a firm combines experience based learning and process innovation,the firm

Correct Answer
verified

Correct Answer
verified

A firm achieves differentiation parity ideally when

Correct Answer
verified

To be cost-competitive,a firm should

Correct Answer
verified

A successfully implemented blue ocean strategy allows a firm to

Correct Answer
verified

Correct Answer
verified

Which of the following scenarios would threaten a firm that uses a differentiation strategy?

Correct Answer
verified

Which of the following statements accurately brings out the difference between economies of scale and economies of scope?

Correct Answer
verified

Both Blue Horizons Electronics Inc.and CLR Inc.have achieved cost parity in the television market.To gain and sustain a competitive advantage against CLR,Blue Horizons Electronics should

Correct Answer
verified

At a certain output level,the per-unit cost incurred by a firm to manufacture a product was $60.Once the cumulative output doubled,the cost per unit reduced to $54.All other factors remaining constant,the firm has been able to achieve a(n)

Correct Answer
verified

A firm experiences diseconomies of scale when it

Correct Answer
verified

To initiate a strategic move that allows a firm to open up new and uncontested market space through value innovation,managers must address four key questions when formulating a blue ocean business strategy.These questions focus on

Correct Answer
verified

When a firm makes choices between a cost or value position to achieve competitive advantage,it is primarily involved in

Correct Answer
verified

Correct Answer
verified

Which of the following best explains why a blue ocean strategy is difficult to implement?

Correct Answer
verified

While Aros Inc.incurs a cost of $20 for a pair of shoes,Shoes Cult Inc.,its competitor,manufactures a pair of shoes at $22.Both the companies are able to sell their shoes for a maximum of $30 per pair.Which of the following statements is true in this scenario?

Correct Answer
verified

Correct Answer
verified

Which of the following is more of a value driver than a cost driver?

Correct Answer
verified

Correct Answer
verified

As it takes less and less time to produce the same output,learning curves usually

Correct Answer
verified

Exam 6: Business Strategy: Differentiation, Cost Leadership, and Blue Oceans

When a firm combines experience based learning and process innovation,the firm

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A firm achieves differentiation parity ideally when

Correct AnswerverifiedShow Answer

To be cost-competitive,a firm should

Correct AnswerverifiedShow Answer

A successfully implemented blue ocean strategy allows a firm to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following scenarios would threaten a firm that uses a differentiation strategy?

Correct AnswerverifiedShow Answer

Which of the following statements accurately brings out the difference between economies of scale and economies of scope?

Correct AnswerverifiedShow Answer

Both Blue Horizons Electronics Inc.and CLR Inc.have achieved cost parity in the television market.To gain and sustain a competitive advantage against CLR,Blue Horizons Electronics should

Correct AnswerverifiedShow Answer

At a certain output level,the per-unit cost incurred by a firm to manufacture a product was $60.Once the cumulative output doubled,the cost per unit reduced to $54.All other factors remaining constant,the firm has been able to achieve a(n)

Correct AnswerverifiedShow Answer

A firm experiences diseconomies of scale when it

Correct AnswerverifiedShow Answer

To initiate a strategic move that allows a firm to open up new and uncontested market space through value innovation,managers must address four key questions when formulating a blue ocean business strategy.These questions focus on

Correct AnswerverifiedShow Answer

When a firm makes choices between a cost or value position to achieve competitive advantage,it is primarily involved in

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following best explains why a blue ocean strategy is difficult to implement?

Correct AnswerverifiedShow Answer

While Aros Inc.incurs a cost of $20 for a pair of shoes,Shoes Cult Inc.,its competitor,manufactures a pair of shoes at $22.Both the companies are able to sell their shoes for a maximum of $30 per pair.Which of the following statements is true in this scenario?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is more of a value driver than a cost driver?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

As it takes less and less time to produce the same output,learning curves usually

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified