Question 1

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)   firm infrastructure
C)   operations
D)   marketing and salesE) A) and B)
F) A) and C)

Question 2

Which of the following is a risk (or potential pitfall) of cost leadership?

Accepted Answer

A)   Cost cutting in one area of the value chain might increase costs in another.
B)   Attempts to stay ahead of the competition may lead to gold plating.
C)   Cost differences increase as the market matures.
D)   Producers are more able to withstand increases in supplier costs.E) None of the above
F) A) and D)

Question 3

Rivals would find it difficult to challenge Atlas Door in the short run because of

Accepted Answer

A)   weak customer loyalty.
B)   high barriers to entry.
C)   high threat of substitution.
D)   low buyer switching costs.E) A) and D)
F) A) and C)

Question 4

Outside the flight experience itself,airlines are generating revenue by charging fees for credit cards,frequent-flyer programs,and access to airport lounges.This serves to

Accepted Answer

A)   increase competition.
B)   expand the profit pool.
C)   provide better customer service.
D)   satisfy regulators.E) C) and D)
F) B) and D)

Question 5

When Cindy Grossman turned around HSN successfully in 2014,which of the following was not one of the practices she used?

Accepted Answer

A)   engaging stakeholders in the discussion
B)   developing a skilled, committed management team
C)   redesigning the company offerings
D)   making all best efforts to offer something for everyoneE) A) and B)
F) C) and D) D

Question 6

As markets mature,

Accepted Answer

A)   costs continue to increase.
B)   application for patents increase.
C)   differentiation opportunities increase.
D)   there is increasing emphasis on efficiency.E) B) and D)
F) A) and D)

Question 7

Piecemeal productivity improvements during a turnaround typically do not involve

Accepted Answer

A)   business process reengineering.
B)   increased capacity utilization.
C)   benchmarking.
D)   expansion of company product market scope.E) B) and D)
F) A) and B)

Question 8

Andersen Windows lowered costs,enhanced quality and variety,and improved its response time to customers by

Accepted Answer

A)   creating a new paper-based catalog.
B)   creating an interactive computer version of its paper catalogs.
C)   creating an integrated computer system of catalogs, products, orders, and manufacturing.
D)   creating a manufacturing system for ordering parts.E) All of the above
F) A) and B)

Question 9

If the overall cost leadership strategy is to provide sustainable competitive advantage,all activities in the value-chain need to be evaluated including the relationships among the value-chain activities.

Accepted Answer

A) True 
 B)False  True

Question 10

In evaluating the sustainability of the Atlas Door competitive advantages over the long run,it is important to evaluate the ability of rivals to

Accepted Answer

A)   easily imitate its strategy.
B)   communicate with its customers.
C)   consistently overprice their products.
D)   find new suppliers.E) B) and C)
F) B) and D)

Question 11

In the ________ stage of the industry life cycle,there are many segments,competition is very intense,and the emphasis on process design is high.

Accepted Answer

A)   growth
B)   introduction
C)   decline
D)   maturityE) A) and C)
F) None of the above

Question 12

Porsche has enhanced power over buyers because its strong reputation makes buyers more willing to pay a premium price.This ________ rivalry,since buyers become ________ price-sensitive.

Accepted Answer

A)   increases; more
B)   lessens; more
C)   lessens; less
D)   increases; lessE) B) and D)
F) B) and C)

Question 13

Value-chain support activities that involve excellent applications engineering support (technology development) and facilities that promote a positive firm image (firm infrastructure) characterize which generic strategy?

Accepted Answer

A)   overall cost leadership
B)   differentiation focus
C)   differentiation
D)   stuck-in-the middleE) B) and C)
F) B) and D)

Question 14

Most turnarounds require a firm to carefully analyze its relevant environments.________ analysis results in actions aimed at reduced costs and higher efficiency.

Accepted Answer

A)   External
B)   Internal
C)   Global
D)   EnvironmentalE) B) and D)
F) B) and C)

Question 15

Overall cost leadership is a generic strategy unlike others that does not require a tight set of interrelated tactics.

Accepted Answer

A) True 
 B)False

Question 16

The five-forces model suggests that with intense competition an overall low-cost position will not enable a firm to achieve above-average returns.

Accepted Answer

A) True 
 B)False

Question 17

Given the attractiveness of premium pricing during the growth stage of the market life cycle,managers should emphasize short-term results to increase profits.

Accepted Answer

A) True 
 B)False

Question 18

Research shows that which one of the following is not a strategy used by firms engaged in successful turnarounds?

Accepted Answer

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

Question 19

Primary value chain activities that involve the effective layout of receiving dock operations (inbound logistics) and support value chain activities that include expertise in process engineering (technology development) characterize which generic strategy?

Accepted Answer

A)   differentiation
B)   differentiation focus
C)   stuck-in-the-middle
D)   overall cost leadershipE) A) and B)
F) A) and D)

Question 20

A low-cost position provides ________ flexibility to cope with demands from powerful suppliers for input cost increases.

Accepted Answer

A)   less
B)   decreasing
C)   more
D)   noE) A) and B)
F) None of the above C

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

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 a risk (or potential pitfall) of cost leadership?

Correct AnswerverifiedShow Answer

Rivals would find it difficult to challenge Atlas Door in the short run because of

Correct AnswerverifiedShow Answer

Outside the flight experience itself,airlines are generating revenue by charging fees for credit cards,frequent-flyer programs,and access to airport lounges.This serves to

Correct AnswerverifiedShow Answer

When Cindy Grossman turned around HSN successfully in 2014,which of the following was not one of the practices she used?

Correct AnswerverifiedD

As markets mature,

Correct AnswerverifiedShow Answer

Piecemeal productivity improvements during a turnaround typically do not involve

Correct AnswerverifiedShow Answer

Andersen Windows lowered costs,enhanced quality and variety,and improved its response time to customers by

Correct AnswerverifiedShow Answer

If the overall cost leadership strategy is to provide sustainable competitive advantage,all activities in the value-chain need to be evaluated including the relationships among the value-chain activities.

Correct AnswerverifiedTrue

In evaluating the sustainability of the Atlas Door competitive advantages over the long run,it is important to evaluate the ability of rivals to

Correct AnswerverifiedShow Answer

In the ________ stage of the industry life cycle,there are many segments,competition is very intense,and the emphasis on process design is high.

Correct AnswerverifiedShow Answer

Porsche has enhanced power over buyers because its strong reputation makes buyers more willing to pay a premium price.This ________ rivalry,since buyers become ________ price-sensitive.

Correct AnswerverifiedShow Answer

Value-chain support activities that involve excellent applications engineering support (technology development) and facilities that promote a positive firm image (firm infrastructure) characterize which generic strategy?

Correct AnswerverifiedShow Answer

Most turnarounds require a firm to carefully analyze its relevant environments.________ analysis results in actions aimed at reduced costs and higher efficiency.

Correct AnswerverifiedShow Answer

Overall cost leadership is a generic strategy unlike others that does not require a tight set of interrelated tactics.

Correct AnswerverifiedShow Answer

The five-forces model suggests that with intense competition an overall low-cost position will not enable a firm to achieve above-average returns.

Correct AnswerverifiedShow Answer

Given the attractiveness of premium pricing during the growth stage of the market life cycle,managers should emphasize short-term results to increase profits.

Correct AnswerverifiedShow Answer

Research shows that which one of the following is not a strategy used by firms engaged in successful turnarounds?

Correct AnswerverifiedShow Answer

Primary value chain activities that involve the effective layout of receiving dock operations (inbound logistics) and support value chain activities that include expertise in process engineering (technology development) characterize which generic strategy?

Correct AnswerverifiedShow Answer

A low-cost position provides ________ flexibility to cope with demands from powerful suppliers for input cost increases.

Correct AnswerverifiedC

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D

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True

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Porsche has enhanced power over buyers because its strong reputation makes buyers more willing to pay a premium price.This rivalry,since buyers become price-sensitive.

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C