GEB 4890 Exam 2 Questions With Verified Answers

GEB 4890 Exam 2 Questions With Verified Answers Define competitive strategy - answerSpecific efforts to position yourself in the marketplace, please customers, ward off competitive threats, and achieve a competitive advantage. What is the purpose of competitive strategy? - answerTo build customer loyalty and outcompete rivals. Identify the 5 generic competitive strategies - answer-Low-cost provider -Broad differentiation -Focused low-cost provider -Focused differentiation strategy -Best-cost provider Low-cost provider strategy - answerStrives to achieve broad lower overall costs than rivals on comparable products that attract a broad spectrum of buyers, usually by underpricing rivals. Broad differentiation strategy - answerSeeks to differentiate the company's product offering from rivals' with attributes that will appeal to a broad spectrum of buyers. Focused low-cost provider strategy - answerConcentrates on the needs and requirements of a narrow buyer segment (or market niche) and strives to meet these needs at lower costs than rivals (thereby being able to serve niche members at a lower price). Focused differentiation strategy - answerConcentrates on a narrow buyer segment (or market niche) and offers niche members customized attributes that meet their tastes and requirements better than rivals' products. Best-cost provider strategy - answerStrives to incorporate upscale product attributes at a lower cost than rivals. This approach is a hybrid strategy that blends the elements of low-cost and differentiation strategies. May be focused or broad. How can the low-cost provider strategy be used to achieve a competitive advantage? - answerIt provides a defense against the 5 competitive forces, can compete based on costs/prices. Identify and describe the 2 major avenues for achieving a cost advantage in an industry - answer-Cost-efficient management of value-chain: improves how existing value chain activities are performed, identifies cost drivers to reduce costs. -Revamping value-chain system: eliminates costly work steps, bypasses cost producing value chain activities. Explain the keys to success in achieving low-cost leadership. - answer-Be proactive -Invest/spend to reduce costs -Champion frugality. Describe situations when a low-cost provider strategy works best. - answer-Price competition among rivals is vigorous -Products of rivals are essentially identical -There is difficulty to achieve product differentiation -Most buyers use the product in the same way -Buyers incur low costs in switching sellers Identify and describe pitfalls of a low-cost provider strategy. - answer-Overly aggressive price cutting -Too much fixation on cost reduction -Using cost reduction approaches that can be easily copied Explain how the differentiation strategy can be used to achieve a competitive advantage - answerProvides a defense against the 5 competitive forces, can build customer loyalty/brand preferences. Key is to offer a product that is different and for these differences to be important to buyers. Describe where in the value chain a differentiation advantage can be achieved. - answer- Managing the value-chain to create differentiation: identifies differentiation opportunities across value-chain, identifies value drivers to create differentiation. -Revamping value-chain system: coordinates with downstream value-chain allies, coordinates with suppliers. Describe situations when a differentiation strategy works best. - answer-Buyer needs and uses of the product are diverse -There are many ways to differentiate the product or service -Few rivals are following similar approaches -Technological change is fast-paced and competition revolves rapidly