Question 1

In the textbook example of Atlas Door,it created low entry barriers for new entrants through its development of competitive advantages.

Accepted Answer

A) True 
 B)False

Question 2

Due to its size with over 475 billion USD in sales in 2014,Walmart has enormous bargaining power over its suppliers.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not a reason for the possible erosion of company competitive advantage?

Accepted Answer

A)   rapid change in technology
B)   globalization
C)   actions by rivals from within and outside of the industry
D)   company commitment to innovationE) A) and C)
F) A) and B)

Question 4

A firm can attain an overall cost leadership position by increasing the management layers in order to reduce overhead costs.

Accepted Answer

A) True 
 B)False

Question 5

Atlas Door relies on technologies that are rather well known and non-proprietary.This opens it up to the potential of

Accepted Answer

A)   imitation by rivals.
B)   customer abandonment.
C)   increased supplier power.
D)   government regulation.E) B) and D)
F) All of the above

Question 6

The size of pricing and differentiation advantages between competitors decreases in which stage of the market life cycle?

Accepted Answer

A)   introduction
B)   growth
C)   maturity
D)   declineE) C) and D)
F) A) and B)

Question 7

Overhead costs associated with the number of layers of management in a firm are part of the _________ activities of the value chain.

Accepted Answer

A)   human resources management
B)   operations
C)   firm infrastructure
D)   marketing and salesE) A) and B)
F) None of the above

Question 8

With reverse positioning,a strategy to be used during the mature stage of the industry life cycle,a product escapes its category by deliberately associating with a different one.

Accepted Answer

A) True 
 B)False

Question 9

Many firms have achieved success by integrating activities throughout the extended value chain by using _______ to link their own value chain with the value chains of their customers and suppliers.

Accepted Answer

A)   customization
B)   information technology
C)   human resources
D)   competitive advantageE) All of the above
F) A) and B)

Question 10

The Yugo car was cheap,but it was poorly made.Consumers did not purchase it.This is an example of failure to attain parity on the basis of differentiation.

Accepted Answer

A) True 
 B)False

Question 11

A firm can achieve differentiation through all of the following means except

Accepted Answer

A)   improving brand image.
B)   better customer service.
C)   offering lower prices to frequent customers.
D)   adding additional product features.E) B) and C)
F) A) and D)

Question 12

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) All of the above
F) C) and D)

Question 13

A __________ can be defined as the total profits in an industry at all points along the industry value chain.

Accepted Answer

A)   profit maximizer
B)   revenue enhancer
C)   profit pool
D)   profit outsourcingE) A) and B)
F) All of the above

Question 14

Which of the following is most often true of mature markets?

Accepted Answer

A)   Some competitors enjoy a significant operating advantage due to increasing experience effects.
B)   The market supports premium pricing, which attracts additional competitors.
C)   Advantages that cannot be duplicated by other competitors are difficult to achieve.
D)   The magnitude of pricing differences and product differentiation is larger than in the growth stage.E) All of the above
F) A) and B)

Question 15

Which of the following is FALSE regarding how a differentiation strategy can help a firm to improve its competitive position relative to the Porter five forces model?

Accepted Answer

A)   Firms will enjoy high customer loyalty.
B)   By increasing firm margins, it avoids the need for a low cost position.
C)   It reduces buyer power because buyers lack comparable alternatives.
D)   Supplier power is increased, because suppliers will be able to charge higher prices for their inputs.E) A) and C)
F) B) and C)

Question 16

Which statement regarding competitive advantages is true?

Accepted Answer

A)   With an overall cost leadership strategy, firms need not be concerned with parity on differentiation.
B)   In the long run, a business with one or more competitive advantages is probably destined to earn normal profits.
C)   If several competitors pursue similar differentiation tactics, they may all be perceived as equals in the mind of the consumer.
D)   Attaining multiple types of competitive advantage is a recipe for failure.E) A) and B)
F) All of the above

Question 17

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) B) and C)
F) B) and D)

Question 18

A differentiation strategy enables a business to address the five competitive forces by

Accepted Answer

A)   having brand-loyal customers become more sensitive to prices.
B)   increasing economies of scale.
C)   providing protection against rivalry.
D)   serving a broader market segment.E) None of the above
F) C) and D)

Question 19

Focus,by itself,often constitutes a competitive advantage.

Accepted Answer

A) True 
 B)False

Question 20

In the textbook example of Atlas Door,the threat of new rivals who could bring new technologies and processes to a similar business model diminishes the sustainability of the Atlas Door just-in-time model.

Accepted Answer

A) True 
 B)False

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

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

A __________ can be defined as the total profits in an industry at all points along the industry value chain.

Correct AnswerverifiedShow Answer

Which of the following is FALSE regarding how a differentiation strategy can help a firm to improve its competitive position relative to the Porter five forces model?

Correct AnswerverifiedShow Answer

A firm can attain an overall cost leadership position by increasing the management layers in order to reduce overhead costs.

Correct AnswerverifiedShow Answer

Which of the following is not a reason for the possible erosion of company competitive advantage?

Correct AnswerverifiedShow Answer

Many firms have achieved success by integrating activities throughout the extended value chain by using _______ to link their own value chain with the value chains of their customers and suppliers.

Correct AnswerverifiedShow Answer

Atlas Door relies on technologies that are rather well known and non-proprietary.This opens it up to the potential of

Correct AnswerverifiedShow Answer

In the textbook example of Atlas Door,the threat of new rivals who could bring new technologies and processes to a similar business model diminishes the sustainability of the Atlas Door just-in-time model.

Correct AnswerverifiedShow Answer

A differentiation strategy enables a business to address the five competitive forces by

Correct AnswerverifiedShow Answer

A firm can achieve differentiation through all of the following means except

Correct AnswerverifiedShow Answer

The Yugo car was cheap,but it was poorly made.Consumers did not purchase it.This is an example of failure to attain parity on the basis of differentiation.

Correct AnswerverifiedShow Answer

Focus,by itself,often constitutes a competitive advantage.

Correct AnswerverifiedShow Answer

Overhead costs associated with the number of layers of management in a firm are part of the _________ activities of the value chain.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the textbook example of Atlas Door,it created low entry barriers for new entrants through its development of competitive advantages.

Correct AnswerverifiedShow Answer

The size of pricing and differentiation advantages between competitors decreases in which stage of the market life cycle?

Correct AnswerverifiedShow Answer

Due to its size with over 475 billion USD in sales in 2014,Walmart has enormous bargaining power over its suppliers.

Correct AnswerverifiedShow Answer

Which of the following is most often true of mature markets?

Correct AnswerverifiedShow Answer

With reverse positioning,a strategy to be used during the mature stage of the industry life cycle,a product escapes its category by deliberately associating with a different one.

Correct AnswerverifiedShow Answer

Which statement regarding competitive advantages is true?

Correct AnswerverifiedShow Answer

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