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</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</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</p> Signup and view all the answers

    What is a key requirement for a competitive advantage?

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

    What is a characteristic of a cost leadership strategy?

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

    What is a condition for applying a cost advantage strategy?

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

    What is a source of cost advantage?

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

    What is a characteristic of a differentiation strategy?

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

    What is a type of competitive advantage?

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

    What is a factor for creating a competitive advantage?

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

    What is a barrier to imitation?

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

    What is a result of a cost leadership strategy?

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

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

    <p>Innovation</p> Signup and view all the answers

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

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

    What is the main goal of a hybrid strategy?

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

    What is a risk of pursuing a differentiation advantage?

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

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

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

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

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

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