Question 1

Hybrid strategies that combine differentiation and cost leadership are increasingly popular because they are easily implemented.

Accepted Answer

Hybrid strategies that combine differentiation and cost leadership are not easily implemented. They require a significant investment in resources and a thorough understanding of both the target market and the industry. Furthermore, it can be difficult to balance the two strategies effectively and maintain a competitive advantage.

Question 2

Generic marketing strategies are typically categorized along any of the following dimensions EXCEPT ________.
A) brand loyalty
B) cost leadership
C) competitive scope
D) product differentiation

Accepted Answer

The four dimensions used to categorize generic marketing strategies are cost leadership, product differentiation, competitive scope, and focus/niche. Brand loyalty is not a dimension used to categorize these strategies.

Question 3

A firm that follows a differentiation strategy would most likely have an organizational structure that is ________.
A) organic
B) centralized
C) hierarchical
D) mechanistic

Accepted Answer

A differentiation strategy focuses on offering unique and high-quality products or services to a specific target market. To achieve this, the firm needs to be flexible, innovative, and able to respond quickly to changes in the market. An organic structure promotes decentralized decision-making, encourages innovation, and allows for quick responses to changes. Therefore, an organic structure is more suitable for a firm that follows a differentiation strategy.

Question 4

Which of the following is a characteristic associated with a cost leadership strategy?
A) flexible automation
B) stable financial structure
C) unique product qualities
D) new product development

Accepted Answer

A cost leadership strategy typically focuses on achieving low costs and high efficiency, which often requires a stable financial structure to support ongoing investments in productivity improvements and cost-saving initiatives. Flexible automation, new product development, and unique product qualities are more commonly associated with differentiation strategies.

Question 5

In which of the following situations is a niche strategy most common and successful?
A) product differentiation and mass market
B) cost leadership and mass market
C) product differentiation and narrow market
D) cost leadership and narrow market

Accepted Answer

A niche strategy is most commonly and successfully used in a narrow market with product differentiation. This allows the company to focus on meeting the specific needs and preferences of a smaller target audience, without the pressure of competing with larger, more established firms. By offering unique and specialized products, the company can create a loyal customer base and charge a premium price, resulting in higher profits. Cost leadership may not be effective in a niche market as customers are willing to pay a higher price for a unique product.

Question 6

For a firm to maintain a position of cost leadership,________ is critical.
A) market share
B) product innovation
C) brand personality
D) labor specialization

Accepted Answer

The answer of For a firm to maintain a position...

Question 7

What characteristics are associated with firms that follow a cost leadership strategy and a differentiation strategy? Illustrate your answer with examples of firms that follow these two different strategies.

Accepted Answer

The answer of What characteristics are associated with firms that...

Question 8

Which of the following is a source of differentiation?
A) economies of scale
B) standard design
C) low-cost inputs
D) aesthetics

Accepted Answer

Aesthetics is a source of differentiation as it involves the design and appearance of the product, which can set it apart from competitors who may have a standard design. Factors such as color, shape, packaging and branding can all contribute to the aesthetic differentiation of a product.

Question 9

An employee of a firm that follows a differentiation strategy would most likely be encouraged to share creative ideas and experiment with innovative concepts.

Accepted Answer

A differentiation strategy focuses on creating a unique product or service with features that are perceived as valuable by customers. To maintain this differentiation, firms would encourage employees to generate creative and innovative ideas to improve their offerings.

Question 10

A firm can gain competitive advantage through a marketing strategy of either ________ or ________.
A) product differentiation; globalization
B) curve effects; process innovation
C) cost leadership; differentiation
D) integration; standardization

Accepted Answer

Cost leadership and differentiation are two marketing strategies that can give a firm a competitive advantage. Cost leadership involves offering products or services at a lower cost than competitors, while differentiation involves offering unique features or benefits that set the product apart from competitors. By successfully implementing one of these strategies, a firm can attract customers and gain a larger market share than competitors. The other choices (product differentiation, globalization, curve effects, process innovation, integration, and standardization) are either not marketing strategies or do not necessarily lead to a competitive advantage.

Question 11

The size and breadth of the market that a strategy intends to serve is known as the ________.
A) product leadership scale
B) competitive scope
C) niche category
D) cost focus

Accepted Answer

The size and breadth of the market that a strategy aims to serve is referred to as the competitive scope. This includes the range of customers, geographic areas, product categories, and other relevant factors that the strategy intends to target. Option A (product leadership scale) doesn't reflect the market served, option C (niche category) is too specific, and option D (cost focus) refers to a specific approach to cost management rather than the market size and breadth.

Question 12

Which type of strategy is used by IKEA?
A) cost leadership
B) differentiation
C) customer focus
D) hybrid

Accepted Answer

IKEA uses a hybrid strategy that combines elements of cost leadership and differentiation. They offer stylish and unique furniture at affordable prices, which appeals to customers who want both quality and affordability. Additionally, the company focuses on sustainability, which is a unique selling point that sets them apart from competitors.

Question 13

Cost leaders typically implement a top-down approach,produce goods for mass markets,and operate efficiently.

Accepted Answer

Cost leaders typically implement a top-down approach to decision making, produce goods in high volumes for mass markets, and strive for maximum efficiency in all aspects of their operations. This is often achieved through standardized processes, centralized control, and economies of scale.

Question 14

Walmart is an example of a firm that follows a strategy of ________.
A) product differentiation
B) flexible automation
C) brand personality
D) cost leadership

Accepted Answer

Walmart is known for its cost leadership strategy where it aims to provide goods and services at a lower cost than its competitors while maintaining quality. This is evident in their everyday low pricing (EDLP) strategy and efficient supply chain management.

Quiz 17: Note : Generic Strategies - Advantage and Scope

Hybrid strategies that combine differentiation and cost leadership are increasingly popular because they are easily implemented.

Generic marketing strategies are typically categorized along any of the following dimensions EXCEPT ________.

A firm that follows a differentiation strategy would most likely have an organizational structure that is ________.

Which of the following is a characteristic associated with a cost leadership strategy?

In which of the following situations is a niche strategy most common and successful?

For a firm to maintain a position of cost leadership,________ is critical.

What characteristics are associated with firms that follow a cost leadership strategy and a differentiation strategy? Illustrate your answer with examples of firms that follow these two different strategies.

Which of the following is a source of differentiation?

An employee of a firm that follows a differentiation strategy would most likely be encouraged to share creative ideas and experiment with innovative concepts.

A firm can gain competitive advantage through a marketing strategy of either or .

The size and breadth of the market that a strategy intends to serve is known as the ________.

Which type of strategy is used by IKEA?

Cost leaders typically implement a top-down approach,produce goods for mass markets,and operate efficiently.

Walmart is an example of a firm that follows a strategy of ________.