Cost Advantage in Business Strategy

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Questions and Answers

What hinders competitors from accessing certain cost factors, leading to a cost advantage?

  • Changes in demand
  • The experience effect
  • Inflation of costs related to production factors
  • The scarcity of certain cost sources (correct)

What is the result of a complex combination of multiple cost sources?

  • Reduced quality of products or services
  • Differentiation advantage
  • Constant monitoring of costs
  • Impossibility of imitating complex cost sources (correct)

What is the outcome when a product or service is perceived as unique by customers?

  • Cost advantage
  • Hybrid strategy
  • Market segmentation
  • Differentiation advantage (correct)

What is a possible risk associated with excessive use of the experience effect?

<p>Annulment of the experience effect (D)</p> Signup and view all the answers

What is one of the market characteristics that can influence product differentiation?

<p>Variety of consumer tastes and needs (B)</p> Signup and view all the answers

What is the relationship between perceived value and price in a differentiation advantage?

<p>Perceived value is higher than price (C)</p> Signup and view all the answers

What is a key requirement for a competitive advantage?

<p>Related to a key factor of success (B)</p> Signup and view all the answers

What is the main goal of a competitive strategy?

<p>To create a defendable position in an industry (A)</p> Signup and view all the answers

What is a characteristic of a cost leadership strategy?

<p>Low costs (A)</p> Signup and view all the answers

What is a condition for applying a cost advantage strategy?

<p>Customers are price-sensitive (C)</p> Signup and view all the answers

What is a source of cost advantage?

<p>Economies of scale (B)</p> Signup and view all the answers

What is a characteristic of a differentiation strategy?

<p>Unique products (A)</p> Signup and view all the answers

What is a type of competitive advantage?

<p>Sustained competitive advantage (C)</p> Signup and view all the answers

What is a factor for creating a competitive advantage?

<p>Ability to detect changes (C)</p> Signup and view all the answers

What is a barrier to imitation?

<p>Causal ambiguity (D)</p> Signup and view all the answers

What is a result of a cost leadership strategy?

<p>Lower costs (D)</p> Signup and view all the answers

What is a key factor in industries with rapid technological changes?

<p>Innovation (A)</p> Signup and view all the answers

What is the main difference between 'low cost' and 'low price'?

<p>Internal vs. external variable (C)</p> Signup and view all the answers

What is the main goal of a hybrid strategy?

<p>To achieve a quality-price ratio (B)</p> Signup and view all the answers

What is a barrier to imitation of a differentiated product?

<p>Complex interrelations of proprietary resources and capabilities (A)</p> Signup and view all the answers

What is a risk of pursuing a differentiation advantage?

<p>All of the above (D)</p> Signup and view all the answers

What is the main limitation of Porter's competitive strategies?

<p>They are not mutually exclusive (D)</p> Signup and view all the answers

What is the main goal of a firm pursuing a market segmentation strategy?

<p>To target a specific group of customers (D)</p> Signup and view all the answers

What is the main characteristic of a 'no frills' strategy?

<p>Low price with minimal features (C)</p> Signup and view all the answers

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