30 Questions
What does a firm's competitive strategy primarily focus on?
Positioning the company in the marketplace
Which factor is NOT used to distinguish one strategy from another according to the text?
Strength of the company's brand image
What does a broad, low-cost strategy aim to achieve?
Underpricing rivals with lower overall costs
Which aspect of a company's resources and capabilities is crucial for gaining a competitive advantage?
Most important resources and capabilities
What should a company evaluate to determine its competitive strength relative to key rivals?
Whether it is stronger or weaker than key rivals
In pursuing a broad, low-cost strategy, what does the company aim to attract with its lower costs?
A broad spectrum of buyers
What does capturing all available economies of scale mean?
The more you produce, the lower the unit cost.
What is the key concept behind operating facilities at full or near-full capacity?
Efficiency increases as facilities approach maximum capacity.
How does improving supply chain efficiency contribute to cost reduction?
By getting ingredients and supplies quickly and inexpensively.
What is the purpose of substituting lower-cost inputs without sacrificing quality?
To find cheaper ingredients without compromising quality.
How does a company benefit from using online systems and sophisticated software?
It achieves operating efficiencies by streamlining processes.
What does employing advanced production technology aim to achieve?
Discover more effective ways to produce goods.
Why is signaling value important in product differentiation?
When the differentiation is based on intangible features that are subjective and hard to quantify.
Why is signaling value especially important for first-time purchases of new products?
Customers are unsure about their experience with a new product.
In what situation might buyers be considered unsophisticated according to the text?
When they lack knowledge and experience in purchasing a specific type of product.
Which factor makes signaling value important for products with invisible and intangible differentiation?
Subjectivity and difficulty in quantifying the intangible features by buyers
How can signaling value influence customer behavior in regard to trying a new product?
By highlighting the intangible benefits and reducing uncertainty for customers.
Why do products with invisible differentiating features require signaling value according to the text?
Because customers may have varying opinions on the value of these features.
What is a common pitfall to avoid in pursuing a low-cost strategy?
Engaging in aggressive price cutting without increasing unit sales
In the context of differentiation strategies, what approach should a company take to create a distinctive product offering?
Study buyer needs and willingness to pay for unique features
What defines buyers who are price-sensitive or have the power to bargain down prices?
They prioritize getting the cheapest deal
Why is it hard for companies to make their products seem special or better than others?
There are limited ways to differentiate industry products
What is a risk of relying on a cost advantage that is not sustainable?
Rival firms can copy or overcome the advantage
How can companies effectively differentiate their products in the market?
By studying buyer needs and incorporating appealing features
What type of differentiation strategy involves creating substantial switching costs that lock in buyers?
Patent-protected product innovation
In what market circumstances does a differentiation strategy work best?
When customer needs and preferences are diverse
What aspect makes differentiation difficult for rivals to duplicate or imitate?
Company reputation
Which circumstance is favorable for a differentiation strategy according to the text?
Rapid change in the product's technology and features
What type of differentiation involves long-standing relationships with buyers?
Company reputation
When does differentiation offer a clear advantage over competitors according to the text?
When competitors are all offering similar products
Learn about the five generic competitive strategies and how to assess a company's present strategy, strengths, weaknesses, resources, and capabilities. Understand how a company's value chain activities impact its cost structure.
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