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75 Cards in this Set
- Front
- Back
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Starbuck’s (Chapter 4 Opening Case) was able to revolutionize the coffee drining experience throug its business level strategy of
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Differentiation
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According to the Chapter 4 Opening Case, part of Starbuck’s success in 2011 was the decision to
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emphasize innovation by introducing new products
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Business-level strategies detail commitments and actions taken to provide value to customers and gain competitive advantage by exploiting core competencies in
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specific product markets
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A firms core strategy is its____ strategy
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business
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when selecting a business level strategy, the firm must determine all of the following except
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why should these customers needs be satisfied?
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the three dimensions of a firms relationships with customers include all the following except
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exclusiveness
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which of the following is true
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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. B |
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the ___ dimension of relationships with customers is particularly important for social networking sites such as Facebook and myspace
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reach
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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?
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richness
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viewing the world through the customers eyes and constantly seeking ways to create more value for the company enhances
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affiliation with the customer
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before the firm decides what products to offer and what benefits and features they will have, the firm must decide all the following questions except
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when the customers needs should be satisfied
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In the animal food products business, food-product needs of owners of companion animals pets (e.g., dogs and cats) differ from the needs for food and health-related products of those owning production animals (e.g., livestock). Which of the following aspects of managing customer relationships does this choice refer to?
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who: determining the customers to serve
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starbucks determined that all of the following customer needs were important except
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the actual product of service(cup with coffee) not the experience
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Hyundai allows customers to return their cars if they lose their job within 12 months of purchase. Which of the following aspects of managing customer relationships is Hyundai engaged in?
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what: determining which customer needs to satisfy
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An interior decorator has moved his business from Los Angeles to St. Paul, Minnesota, because his spouse’s company transferred her to St. Paul. The decorator is distressed because the customers in his target market have, in his words, “banal and bourgeois taste.” What is the decorator’s problem?
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the decorator does not understand that customer needs are neither right nor wrong, good nor bad
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in order to meet and exceed customers expectations, firms must
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continuously improve, innovate, and upgrade their core competencies
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Business level strategies are concerned specifically with
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creating differences between the firms position and its competitors
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An entrepreneur is investigating starting a company that provides tax advice to small companies. In order to position his company differently from the existing competitors, the entrepreneur must
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provide tax advice either in a different manner or provide a different kind of tax service than competitors
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which of the following are central to implementing value-creating strategies and thereby satisfying customer needs
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core competencies
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the analysis of the activity map of a successful company such as southwest airlines emphasizes how
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it it hard for rivals to match a configuration of integrated activities than to imitate a single activity
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by examining the ___ of southwest airlines, one can identify the strategic themes around which it has developed its business strategy. these themes include limited passenger service, high aircraft utilization, highly productive ground and gate crews, and so forth
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activity map
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if southwest airlines employees lost their high enthusiasm and commitment to the company,
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southwest would have lost one of its competitive advantages and its performance would be threatened
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strategic fit among many activities (in an activity map) is fundamental to
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sustainability of a firms competitive advantage
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all of the following are considered generic business level strategies except
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product diversification
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A company using a narrow target market in its business strategy is
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limiting the group of customer segments served
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as the television industry has changes in the last few decades from just three major networks to a multiplicity of networks, one of the major aspects of business strategy for the newer networks is___than the traditional networks
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narrower tager market
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the effectiveness of any of the generic business level strategies is contingent upon
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the match between the opportunities and threats in its external market and the strengths of its internal environment
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cost leadership strategy provides goods or services with features that are
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acceptable
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a cost leadership strategy targets industry's ___cusotmers
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most typical
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Durable Ceramics, Inc., provides inexpensive ceramic tile to builders of institutional buildings such as schools, prisons, and public administration buildings. It has always competed on a cost leadership basis. Most of its products are purchased by a few commercial construction firms, so it is fairly dependent on these construction firms for selling its product. Durable Ceramic’s next most-efficient competitor, Cost-Less Ceramics, Inc., earns average returns, while Durable earns above-average returns. The commercial construction firms are putting pressure on Durable to reduce its prices. If Durable reduces its prices below those of Cost-Less’s prices, it is likely that
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cost less will go out of business and durable will gain higher power over its customers
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research suggests that having a competitive advantage in__ creates more value in the cost leadership strategy than it does in the differentiation strategy
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logistics
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A river barge company can offer cheaper, although slower, per pound transportation of products to companies when compared with transportation by air, truck, or rail. The river barge company should first target customers whose companies use
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the cost leaderships strategy
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In the Chapter 4 Strategic Focus, Walmart made changes to attract upscale customers. These changes had which of the following results?
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it made walmart vulnerable to dollar store and amazon
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In the Chapter 4 Strategic Focus, Walmart’s same store sales have been declining and those of rivals Family Dollar and Amazon have been increasing. What explains this recent change?
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walmart changes its strategy to attract more upscale customers
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a company pursuing the differentiation or focused differentiation strategy would tend to
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develop flexible systems that allow rapid response to customers changing needs
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when the costs of supplies increase in an industry, the low cost leader
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may be the only firm able to pay the higher prices and continue to earn above average returns
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Ever improving levels of efficiency enhance profit margins for a cost leader. This effects which of the five forces of industry structure most directly?
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potential entrants
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the typical risk of a cost leadership strategy include
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production and distribution processes becoming obsolete
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When a firm is able to produce nonstandardized (that is, distinctive) products for customers who value differentiated features more than they value low cost, the firm is successfully implementing
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a differentiation strategy
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a firm successfully implementing a differentiation strategy would expect
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to charge premium prices
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the products or services that are differentiated from other have qualities that are
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perceived by the customer to add value for which they will pay a premium
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Blind taste-tests have shown that the taste of premium-priced vodkas and inexpensive vodkas are indistinguishable even to regular drinkers of vodka. But the sales of premium vodkas are thriving. This is an example of
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the perception of perceived prestige and status as a means of differentiating a product
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all of the following are examples of differentiated products except
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store brand beef and pork
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the use of a differentiation strategy would be expected to be least effective in which of the following markets
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commodity goods
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all of the following are ways that a good or service can be differentiated except
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economies of scale and efficient operations
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The differentiation strategy can be effective in controlling the power of rivalry with existing competitors in an industry because
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customers are loyal to brands that are differentiated in meaningful ways
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Wholesome Pet Food has successfully specialized for 20 years in high-quality pet food made from all-natural ingredients and organically-raised lamb. This brand has a strong following and is recommended by veterinarians who practice in affluent neighborhoods. Wholesome’s main supplier of lamb has announced that the price for lamb will be 15 percent higher next year.
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wholesome will probably be able to pass the cos on to its customers because they are less sensitive to price increases than the average buyer
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which of the following is not a value creating activity associated with the differentiation strategy
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develop policies to ensure efficient hiring and retention to keep costs low and implement truing to ensure high employee efficiency
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a differentiation strategy can be effective in controlling the power of subsidies in an industry because
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customer develop brand loyalty
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Recently, the only type of car available for Anthony to rent on a business trip was a compact, fuel-efficient Japanese import. Anthony was surprised at the comfort and performance of the car. He is in the market for a new car and had previously considered only buying another luxury SUV. Now, he is thinking about the significant cost savings he would have if he bought the compact vehicle rather than a new SUV. This is an example of the competitive risk that
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experience can narrow a customers perceptions of the value of a products differentiated features
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A manufacturer of jewelry imitates the style of a popular and expensive brand using manufactured stones rather than real gemstones and lesser grade metals rather than silver and gold. The manufacturer packages the jewelry in boxes of the same color imprinted with an almost identical logo. About 85 percent of the company’s sales are through Internet sales. This example illustrates the competitive risk
of ____ that threatens companies that use the differentiation strategy. |
counterfeiting
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the typical risks of differentiation strategy do not include which of the following
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suppliers of raw material erode the firms profit margin with price increases
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when implementing a focus strategy, the firm seeks to
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serve the specialized needs of a market segment
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Ikea offers young customers a selection of home furnishings featuring good design, function, and acceptable quality at low prices. Ikea is using which business level strategy?
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focused cost leadership
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The focused differentiation strategy differs from the differentiation strategy in that
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focuses differentiators target a narrower customer market
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Chico’s is a clothing retailer that targets middle-aged women who want stylish and appealing clothes that are suitable for the mature figure. Chico’s has an extensive customer list, a frequent-buyer discount card, and frequent sales promotions to Chico’s customers based on their spending levels. Chico’s uses a ____ strategy.
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focused differentiation based on a buyer group
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The new generation of lunch trucks serving high-end fare in cities such as New York, San Francisco, and Los Angeles share which of the following a business strategies?
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focused differentiation
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Denver-based Kazoo Toys uses the __________ strategy to create value for parents and children interested in purchasing unique toys while simultaneously having access to unique services
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focused differentiation
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The Monteleone Company pays large fees to a highly-recognizable, prestigious individual to be the spokesperson for the company’s products, luxury private jets. Monteleone is probably following the
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focused differentiation strategy
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the risks of a focus strategy include
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a competitors ability to use its core competencies to out focus the focuser by serving an even more narrowly defined segment
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focus strategies are
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faced with additional types of risks than are industry wide strategies
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New Balance Athletic Shoes target Baby Boomers’ needs for well-fitting shoes. The company is unique in that it offers a very broad range of shoe widths. A realistic potential risk New Balance runs in this focused differentiation strategy includes the possibility that:
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a competitor may be able to better use flexible manufacturing systems to make shoes with an individualized fit
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Suppose another firm found a way to offer IKEA’s customers (young buyers interested in stylish furniture at low cost) additional sources of differentiation while charging the same price or to provide the same service with the same sources of differentiation at a lower price. What category of competitive risk to a focus strategy would this be?
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focusing on a more narrowly defined segment and "out focusing" the focuser
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Zara has pioneered “cheap chic” in clothing apparel. Zara offers current and desirable fashion goods at relatively low prices. To implement the strategy, Zara uses sophisticated designers and effective means of managing costs. These are all characteristics of which business level strategy?
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integrated cost leadership/differentiation
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firms use the integrated cost leadership/ differentiation strategy because
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most consumers want to pay a low price for products with somewhat highly differentiated features
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the integration of a cost leadership and a differentiation strategy
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is challenging because it increases the number of value chain activities and support functions in which the from must become competent
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target bran promise"expect more pay less" and appeal to higher income, fashion conscious discount shoppers illustrates the _______ strategy
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integrated cost leadership/differentiation
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According to the Chapter 4 Strategic Focus, The Li Ning Company entered the Chinese sportswear market using a __________________ strategy. As it seeks to expand into new market segments, however, its strategy has changed to ____________________.
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cost leadership, integrated cost leadership/differentiation
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Three sources of flexibility in completing primary and support activities are particularly useful for firms using the integrated strategy. These are
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Flexible Manufacturing Systems, Total Quality Management, and Information Networks.
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The benefit of a flexible manufacturing system is that
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the lot size needed to manufacture a firms product efficiently is reduced
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A flexible manufacturing system is
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a computer-controlled process that is used to produce a variety of products in moderate,
flexible quantities with minimal human intervention. |
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A nationwide chain of pet stores wishes to identify the tradeoffs that its customers are willing to make between low-cost products such as generic pet foods and differentiated features such as pick-up and delivery of pets for grooming. The best technique for this firm to learn this information would be to use
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information networks.
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By linking companies with their suppliers, distributors, and customers, ____ provide a company with flexibility.
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Information networks
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TQM is most helpful to firms following the ____ business strategy
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integrated cost-leadership/differentiation
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The term "stuck in the middle"
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means that the firm’s cost structure is not low enough to allow it to attractively price its
products and that its products are not sufficiently differentiated to create value for its target customer. |
