Cost Advantage in Business Strategy

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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?

Annulment of the experience effect Signup and view all the answers

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

Variety of consumer tastes and needs Signup and view all the answers

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

Perceived value is higher than price Signup and view all the answers

What is a key requirement for a competitive advantage?

Related to a key factor of success Signup and view all the answers

What is the main goal of a competitive strategy?

To create a defendable position in an industry Signup and view all the answers

What is a characteristic of a cost leadership strategy?

Low costs Signup and view all the answers

What is a condition for applying a cost advantage strategy?

Customers are price-sensitive Signup and view all the answers

What is a source of cost advantage?

Economies of scale Signup and view all the answers

What is a characteristic of a differentiation strategy?

Unique products Signup and view all the answers

What is a type of competitive advantage?

Sustained competitive advantage Signup and view all the answers

What is a factor for creating a competitive advantage?

Ability to detect changes Signup and view all the answers

What is a barrier to imitation?

Causal ambiguity Signup and view all the answers

What is a result of a cost leadership strategy?

Lower costs Signup and view all the answers

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

Innovation Signup and view all the answers

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

Internal vs. external variable Signup and view all the answers

What is the main goal of a hybrid strategy?

To achieve a quality-price ratio Signup and view all the answers

What is a barrier to imitation of a differentiated product?

Complex interrelations of proprietary resources and capabilities Signup and view all the answers

What is a risk of pursuing a differentiation advantage?

All of the above Signup and view all the answers

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

They are not mutually exclusive Signup and view all the answers

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

To target a specific group of customers Signup and view all the answers

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

Low price with minimal features Signup and view all the answers