BBA 499C Exam 2 Study Set With Verified Answers
Which of the following is a risk of a focus strategy?
a. Industry-wide competitors use their resources to serve a wider range of customers' needs than the focuser has been serving.
b. Focused competitors use their resources to serve a wider range ...
BBA 499C Exam 2 Study Set With Verified
Answers
Which of the following is a risk of a focus strategy?
a. Industry-wide competitors use their resources to serve a wider range of customers' needs than the
focuser has been serving.
b. Focused competitors use their resources to serve a wider range of customer needs.
c. Core competencies of a competitor attract a more broadly defined segment.
d. Core competencies of a competitor are used to focus on an even more narrowly defined segment,
thereby skimming off the most desired customers.
d. Core competencies of a competitor are used to focus on an even more narrowly defined segment,
thereby skimming off the most desired customers.
_____ is an especially critical dimension for social networking sites in that the value these firms create
for users is to connect them with others.
a. Reach
b. Richness
c. Affiliation
d. Effective management
a. Reach
Which of the following statements about a flexible manufacturing system (FMS) is NOT true?
a. Used properly, an FMS allows the firm to increase its effectiveness in responding to changes in its
customers' needs, while retaining low-cost advantages and consistent product quality.
b. An FMS is a computer-controlled process that allows firms to produce a variety of products in
moderate, flexible quantities with a minimum of manual intervention.
c. The goal of an FMS is to eliminate the "low cost versus product variety" trade-off that is inherent in
traditional manufacturing technologies.
d. An FMS allows a manufacturer to connect with its suppliers, distributors, and customers, which
enables it to satisfy customer expectations in terms of product quality and delivery speed.
d. An FMS allows a manufacturer to connect with its suppliers, distributors, and customers, which
enables it to satisfy customer expectations in terms of product quality and delivery speed.
When selecting a business-level strategy geared toward customers, the firm determines all of the
following EXCEPT:
a. what needs those target customers have that it will satisfy.
b. when to start implementing the strategy.
c. how the needs of target customers will be satisfied.
d. who will be served.
b. when to start implementing the strategy.
The owner of an upscale, online children's clothing boutique would most likely use _____ factors as
the basis for segmenting her customers.
a. consumption
b. geographic
c. psychological
d. demographic
d. demographic
A business model is a _____ for how the firm will create, deliver, and capture value while a business-
level strategy is the set of commitments and actions that yields the _____ the firm intends to follow
to gain a competitive advantage by exploiting its core competencies in a specific product market.
,a. path; framework
b. high-level strategy; path
c. framework; path
d. high-level strategy; map
c. framework; path
A _____ describes what a firm does to create, deliver, and capture value for its stakeholders.
a. business model
b. strategic plan
c. business-level strategy
d. corporate-level strategy
a. business model
Which of the following statements about focus strategies is true?
a. They are subject to more failure than industry-wide strategies.
b. They can avoid global risk by focusing on pointed national or regional markets.
c. They are protected from risks associated with industry-wide strategies due to a position focus.
d. They are faced with more risks than are industry-wide strategies.
d. They are faced with more risks than are industry-wide strategies.
Conrad Cabinets Company implements a cost leadership strategy to produce its cabinets with
features that are acceptable to its customers at the lowest cost relative to that of its competitors.
Conrad Cabinets' value-creating activities might include all of the following EXCEPT:
a. having a specially trained unit to provide after-sales service.
b. building economies of scale and efficient operations.
c. using low-cost modes of transporting its products.
d. offering lower prices for high sales volumes.
a. having a specially trained unit to provide after-sales service.
Which of the following approaches to differentiation would present a high-end, luxury handbag and
footwear designer with the best opportunity to differentiate itself from competitors?
a. Responsive customer service
b. Technological leadership
c. Perceived prestige and status
d. Rapid product innovations
c. Perceived prestige and status
Why are the five business-level strategies considered to be generic in nature?
a. Because they are not listed in any certain order
b. Because they can be used in any organization competing in any industry
c. Because they are risk-free
d. Because they all incorporate the value chain
b. Because they can be used in any organization competing in any industry
Powerful customers can force a cost leader to reduce its prices, but not below the level at which the
cost leader's:
a. next-most-efficient industry competitor can earn average returns.
b. least efficient industry competitor can earn average returns.
c. next-most-efficient industry competitor can earn above-average returns.
d. next-most-efficient industry competitor can earn below-average returns.
a. next-most-efficient industry competitor can earn average returns.
,For just $3 a month, Dollar Shave Club ships high-quality razors and blades, plus occasional sample
products, to its customers. Dollar Shave Club is an example of which type of business model?
a. Franchise
b. Subscription
c. Freemium
d. Advertising
b. Subscription
When selecting a business-level strategy, firms evaluate two types of potential competitive
advantages: _____ or _____.
a. the cost leadership strategy; the number of competitors
b. lower cost than rivals; the ability to differentiate and command a premium price that exceeds the
extra cost of doing so
c. internal resources; the ability to command a premium price for value-added capabilities
d. the industry as a whole; the core competencies of competitors
b. lower cost than rivals; the ability to differentiate and command a premium price that exceeds the
extra cost of doing so
How firms integrate the activities they complete within each business-level strategy demonstrates:
a. how they differ from one another.
b. how profitable they will be.
c. what their cost structure is.
d. whether they will have the lowest costs.
a. how they differ from one another.
As their loyalty to a brand increases, customers become:
a. more aware of imitation efforts by rivals.
b. less accepting of price increases.
c. more aware of price decreases.
d. less sensitive to price increases.
d. less sensitive to price increases.
Starla Mfg. has pioneered "cheap chic" pens that resemble Mont Blanc pens and offers them at
relatively low prices. To expand its products into more businesses to be used as advertising
promotions, Starla uses sophisticated designers and effective means of managing costs. These are all
characteristics of which business-level strategy?
a. Differentiation
b. Cost leadership
c. Focus
d. Integrated cost leadership/differentiation
d. Integrated cost leadership/differentiation
Airbnb is an online service that connects property owners who have rooms to rent with travelers who
want to stay in accommodations other than traditional hotels and motels. Airbnb is an example of
which type of business model?
a. Franchise
b. Subscription
c. Advertising
d. Peer-to-peer
d. Peer-to-peer
, A product substitute becomes a concern for the cost leader when
a. increased margins of competitors are above the cost leader.
b. there is no differentiation strategy available.
c. the cost leader has no flexibility to reduce the price of its goods.
d. its features and characteristics, in terms of cost and differentiation, are potentially attractive to the
firm's customers.
d. its features and characteristics, in terms of cost and differentiation, are potentially attractive to the
firm's customers.
Each business-level strategy can help the firm establish and exploit a particular competitive _____ as
the basis for how it will create value for customers within a particular competitive _____.
a. advantage; scope
b. scope; advantage
c. geographic area; market
d. cost; activity
a. advantage; scope
The amount of rivalry between competitors can be reduced when firms form:
a. labor unions.
b. cost leaders.
c. joint ventures.
d. entry barriers.
c. joint ventures.
Delilah's Delicacies, a food truck that specializes in organic foods, sets up in "high-end" designated
areas for street cuisine. What type of strategy is Delilah's implementing?
a. Differentiation
b. Cost leadership
c. Focused differentiation
d. Integrated cost leadership/differentiation
c. Focused differentiation
Which of the following strategies helps a firm concentrate on understanding its customers and their
needs with greater clarity as a foundation for innovation?
a. Market segmentation strategy
b. Business model strategy
c. Digital strategy
d. Cost leadership strategy
c. Digital strategy
From a strategic perspective, a basic need of all customers is to buy products that create _____ for
them.
a. value
b. challenges
c. questions
d. encounters
a. value
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