Question 1

Flexible manufacturing systems, information networks, and total quality management are three techniques that make it possible for firms to implement the focused differentiation strategy.

Accepted Answer

The answer of Flexible manufacturing systems, information networks, and total...

Question 2

Amazon has built capabilities around Internet technology and e-commerce to facilitate information exchanges with its customers in a cost effective manner. This represents which of the three service dimension?
A) Reach
B) Richness
C) Affiliation
D) None of the these

Accepted Answer

Richness dimension refers to the amount and quality of information that can be exchanged between the service provider and the customer. Amazon's capabilities in internet technology and e-commerce enable it to provide rich information and facilitate effective exchanges with its customers.

Question 3

Zara offers current and desirable fashion goods at relatively low prices. To implement this strategy, Zara has sophisticated designers and effective means of managing costs. Zara is an example of the integrated cost leadership/differentiation strategy.

Accepted Answer

Zara's strategy combines cost leadership (offering low prices) with differentiation (offering desirable and fashionable goods) through their use of sophisticated designers and cost management processes.

Question 4

Although it is a cost leader, IKEA also offers differentiated features that appeal to its target customers, including its unique furniture designs, in-store playrooms for children, wheelchairs for customer use, and extended hours.

Accepted Answer

The statement is true. Although IKEA is known for its cost leadership strategy, it also offers unique features that provide added value to its customers, such as innovative designs, in-store amenities like playrooms and wheelchairs, and extended hours of operation. These differentiators help to attract and retain customers who are looking for affordable, but quality furniture and home decor options.

Question 5

Which of the following is TRUE?
A) As customer loyalty increases, customers are more sensitive to price increases.
B) Customer loyalty has a positive relationship with firm profitability.
C) Customer loyalty is fragile and cannot reliably be considered a factor in firm success.
D) Customer loyalty is of importance only to firms using the differentiation strategy.

Accepted Answer

Customer loyalty has been found to have a positive relationship with firm profitability. As customers become more loyal, they are more likely to continue doing business with the firm and purchase additional products or services. Additionally, loyal customers are more likely to recommend the firm to others, which can lead to new customers and increased sales.

Question 6

A firm's core strategy is its ____ strategy.
A) corporate
B) business
C) pricing
D) international

Accepted Answer

A firm's core strategy refers to its business strategy, which defines how it will compete within a specific industry and create value for its customers. Corporate strategy, pricing strategy, and international strategy are all important components of a firm's overall strategy, but they are not necessarily core strategies.

Question 7

Because of its focus on innovation and quality manufacturing, Total Quality Management is not useful for firms which follow a cost leadership strategy.

Accepted Answer

Total Quality Management can be useful for firms following a cost leadership strategy as it helps in reducing waste, improving efficiency, and enhancing customer satisfaction. TQM emphasizes continuous improvement, which can help businesses reduce costs and improve their competitive advantage.

Question 8

The Li Ning Company's move from a cost leadership strategy to an integrated cost leadership/differentation strategy in the sportswear industry was so successful in China that both Nike and Adidas exited the Chinese market (Chapter 4 Strategic Focus).

Accepted Answer

There is no evidence to support this claim. Nike and Adidas continue to be major players in the Chinese sportswear market.

Question 9

A risk of a focus strategy is that the needs of the customer within a narrow competitive segment may become more similar to those needs of customers in the whole market.

Accepted Answer

This is true because as competitors in the narrow segment adapt to changing customer needs, they may inadvertently start offering similar products or services, making it harder for the focused company to differentiate itself and maintain its competitive advantage.

Question 10

Research shows that firms using a hybrid strategy (i.e., integrated cost leadership/differentation) often outperform firms using pure strategies ( i.e., cost leadership or differentation).

Accepted Answer

The answer of Research shows that firms using a hybrid...

Question 11

Business-level strategies detail commitments and actions taken to provide value to customers and gain competitive advantage by exploiting core competencies in
A) the selection of industries in which the firm will compete.
B) specific product markets.
C) primary value chain activities.
D) particular geographic locations.

Accepted Answer

Business-level strategies are focused on the actions a company takes to gain competitive advantage in specific product markets. This includes leveraging core competencies to provide more value to customers than competitors. Selecting industries, geographic locations, and primary value chain activities are all important considerations, but they are not the main focus of business-level strategies.

Question 12

The hazard of getting "stuck in the middle" applies to firms using any business strategy.

Accepted Answer

Getting "stuck in the middle" can happen to firms using any business strategy, as they may not have a clear differentiation or cost leadership advantage, leaving them vulnerable to competition from both sides.

Question 13

A flexible manufacturing system is a computer-controlled process used to produce a variety of products in moderate, flexible quantities with minimal manual intervention.

Accepted Answer

A flexible manufacturing system is designed for versatility and can adapt to different product types and production volumes. It is automated and reduces the need for manual labor, making it a cost-effective solution for producing moderate quantities of products.

Question 14

Starbuck's (Chapter 4 Opening Case) was able to revolutionize the coffee drining experience throug its business level strategy of
A) focused cost.
B) cost leadership.
C) differentiation.
D) stuck-in-the-middle.

Accepted Answer

Starbucks was able to differentiate itself from competitors by offering a unique coffee drinking experience through its upscale ambiance, personalized and customized drinks, and premium ingredients. This allowed them to charge higher prices and attract a loyal customer base.

Question 15

A risk of The Li Ning Company's integrated cost leadership/differentation strategy is that it may end up "stuck-n-the-middle," i.e., not having either a low cost or a uniqueness advantage (Chapter 4 Strategic Focus).

Accepted Answer

The answer of A risk of The Li Ning Company's...

Question 16

One of the benefits of the integrated cost leadership/differentiation strategy is that it is less risky than either the cost leadership or differentiation strategies.

Accepted Answer

The answer of One of the benefits of the integrated...

Question 17

According to the Chapter 4 Opening Case, part of Starbuck's success in 2011 was the decision to
A) cease introducing new products.
B) emphasize innovation by introducing new products.
C) cut back on the number of stores it operates.
D) discontinue unternational expansion.

Accepted Answer

The opening case states that Starbucks' success in 2011 was due to their emphasis on innovation by introducing new products. Therefore, choice B is the best answer.

Question 18

The three dimensions of a firm's relationships with customers include all the following EXCEPT
A) exclusiveness.
B) affiliation.
C) richness.
D) reach.

Accepted Answer

The three dimensions of a firm's relationships with customers are affiliation, richness, and reach. Exclusiveness is not one of the dimensions.

Question 19

The ________dimension of relationships with customers is particularly important for social networking sites such as Facebook and MySpace.
A) reach
B) richness
C) affiliation
D) social.

Accepted Answer

The answer of The ________dimension of relationships with customers is...

Question 20

When selecting a business level strategy, the firm must determine all of the following EXCEPT
A) How will the customer's needs be satisfied?
B) Who is the customer?
C) What are the customers' needs?
D) Why should these customers' needs be satisfied?

Accepted Answer

The firm must determine all of the following when selecting a business level strategy- How will the customer's needs be satisfied? Who is the customer? What are the customers' needs? and, Why should these customers' needs be satisfied? Therefore, the answer is D which is the option that is not included in the list of things that the firm must determine.

Quiz 4: Business Level Strategy

Flexible manufacturing systems, information networks, and total quality management are three techniques that make it possible for firms to implement the focused differentiation strategy.

Amazon has built capabilities around Internet technology and e-commerce to facilitate information exchanges with its customers in a cost effective manner. This represents which of the three service dimension?

Zara offers current and desirable fashion goods at relatively low prices. To implement this strategy, Zara has sophisticated designers and effective means of managing costs. Zara is an example of the integrated cost leadership/differentiation strategy.

Although it is a cost leader, IKEA also offers differentiated features that appeal to its target customers, including its unique furniture designs, in-store playrooms for children, wheelchairs for customer use, and extended hours.

Which of the following is TRUE?

A firm's core strategy is its ____ strategy.

Because of its focus on innovation and quality manufacturing, Total Quality Management is not useful for firms which follow a cost leadership strategy.

The Li Ning Company's move from a cost leadership strategy to an integrated cost leadership/differentation strategy in the sportswear industry was so successful in China that both Nike and Adidas exited the Chinese market (Chapter 4 Strategic Focus).

A risk of a focus strategy is that the needs of the customer within a narrow competitive segment may become more similar to those needs of customers in the whole market.

Research shows that firms using a hybrid strategy (i.e., integrated cost leadership/differentation) often outperform firms using pure strategies ( i.e., cost leadership or differentation).

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

The hazard of getting "stuck in the middle" applies to firms using any business strategy.

A flexible manufacturing system is a computer-controlled process used to produce a variety of products in moderate, flexible quantities with minimal manual intervention.

Starbuck's (Chapter 4 Opening Case) was able to revolutionize the coffee drining experience throug its business level strategy of

A risk of The Li Ning Company's integrated cost leadership/differentation strategy is that it may end up "stuck-n-the-middle," i.e., not having either a low cost or a uniqueness advantage (Chapter 4 Strategic Focus).

One of the benefits of the integrated cost leadership/differentiation strategy is that it is less risky than either the cost leadership or differentiation strategies.

According to the Chapter 4 Opening Case, part of Starbuck's success in 2011 was the decision to

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

The ________dimension of relationships with customers is particularly important for social networking sites such as Facebook and MySpace.

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