Questions and Answers
Which of the following are business strategies JetBlue pursued in order to gain a competitive advantage? (Select all that apply)
A ______ outlines the steps a manager will take to achieve competitive advantage in a single product market.
business-level strategy
The perceived value that a company creates for consumers less the company's costs to create the value equals ______.
the economic value created
Which type of strategy is being used if a company offers a product at a lower cost than its competitors?
Signup and view all the answers
A manufacturer of electronic components can use its manufacturing machines to produce many different components such as semiconductors, sensors, and capacitors. In this case, the firm benefits from an economy of ______.
Signup and view all the answers
The most significant challenge JetBlue faced in implementing its business strategy was ______.
Signup and view all the answers
Two important features that managers can adjust in an effort to improve the firm's strategic position are ______.
Signup and view all the answers
Business-level strategy addresses which overarching question?
Signup and view all the answers
Unique features and attributes that differentiate a product from competitors' offerings allow the firm to ______.
Signup and view all the answers
Which two of the following variables can managers primarily manipulate in order to answer the question, 'How should we compete?' (Select all that apply)
Signup and view all the answers
The Ritz-Carlton provides a personalized customer experience based on sophisticated analysis of data gathered about each guest. This focus on ______ allows the hotel to increase its perceived value.
Signup and view all the answers
A ______ strategy aims to create higher value for customers by offering products with unique features but a similar level of costs to those of competing products.
Signup and view all the answers
Bundling of products and services that are consumed in tandem to create value is an example of ______.
Signup and view all the answers
Economies of ______ are the savings that come from producing two or more different outputs at a lower cost than producing each output individually.
Signup and view all the answers
What are the three most important value drivers that managers can use to create a competitive advantage? (Select all that apply)
Signup and view all the answers
A company that achieves differentiation parity at a lower cost has implemented a successful cost-leadership strategy.
Signup and view all the answers
Which capability is required to create superior product features?
Signup and view all the answers
An auto manufacturer that has access to cheaper labor and raw materials than its rivals will have a competitive advantage regarding lower cost of ______ factors.
Signup and view all the answers
Which of the following are examples of ways that a large retailing firm can increase the perceived value of its offerings by focusing on customer service? (Select all that apply)
Signup and view all the answers
Economies of scale are ______.
Signup and view all the answers
A tablet manufacturer that includes a free stylus with every purchase is using ______ to enhance users' experiences and increase the perceived value of its tablets.
Signup and view all the answers
Economies of scale present an opportunity to increase profits because as the number of units within the relevant range increases, fixed costs ______.
Signup and view all the answers
Why does the learning curve go down when productivity is considered?
Signup and view all the answers
The goal of a ______ strategy is to achieve expenses below those of competitors while maintaining similar value.
Signup and view all the answers
If two firms produce very similar products at the same rate of output, and firm A is able to achieve lower per-unit costs than firm B by taking advantage of a new manufacturing technology, firm A is benefiting from ______.
Signup and view all the answers
Which of the following are input factors? (Select all that apply)
Signup and view all the answers
What is one of the benefits of pursuing a differentiation strategy when it comes to the power of suppliers?
Signup and view all the answers
A firm that increases its output of a given product and experiences a simultaneous decrease in per unit costs is taking advantage of ______.
Signup and view all the answers
A(n) ______ strategy attempts to increase the perceived value of a product while controlling costs.
Signup and view all the answers
What is the relationship between fixed costs and economies of scale?
Signup and view all the answers
A ______ strategy requires achieving the lowest costs in the industry while maintaining a level of value that is acceptable to customers.
Signup and view all the answers
In terms of productivity, learning curves go down.
Signup and view all the answers
Products in the affordable 'business-casual' clothing market have largely become commoditized, and most retailers have begun to compete mainly on price rather than product features. This is an example of a ______ ocean.
Signup and view all the answers
The concept of a(n) ______ attempts to combine both learning effects and process improvements.
Signup and view all the answers
Implementing a blue ocean strategy requires making competition irrelevant and creating a new market space, otherwise known as ______.
Signup and view all the answers
Which of the following competitive forces can result in the erosion of margins for both differentiation and cost-leadership business strategies? (Select all that apply)
Signup and view all the answers
A struggling retailer seeking to implement a blue ocean strategy is likely to experience difficulty with what?
Signup and view all the answers
A producer of consumer headphones that successfully differentiates its products with a patented noise-canceling technology and celebrity endorsements will enjoy which of the following benefits? (Select all that apply)
Signup and view all the answers
In addition to having the lowest cost, a low-cost leader is likely to have what?
Signup and view all the answers
Formulating a business strategy is a relatively easy task because only a few strategic options are available.
Signup and view all the answers
In terms of business strategy, blue oceans represent which of the following? (Select all that apply)
Signup and view all the answers
A firm that manages to avoid competition entirely by offering a product or service that creates an uncontested market space is engaging in ______.
Signup and view all the answers
Why do many firms fail to successfully implement a blue ocean strategy?
Signup and view all the answers
What must strategic leaders keep in mind if they are going to achieve successful strategic positioning?
Signup and view all the answers
Study Notes
Business Strategies and Competitive Advantage
- JetBlue pursued differentiation and cost-leadership strategies to gain a competitive edge.
- A business-level strategy outlines steps a manager will take to achieve competitive advantage in a single product market.
Economic Value Creation
- Economic value created is the perceived value to consumers minus the costs incurred by the company.
- Cost-leadership strategy involves offering products at a lower cost than competitors.
Economy of Scope
- Economies of scope relate to producing multiple outputs at a lower cost than if produced individually.
- Firms benefit from economies of scope by finding multiple uses for production facilities and components.
Business Strategy Implementation Challenges
- JetBlue's most significant challenge was reconciling cost-cutting with the delivery of superior service.
- Managers can adjust product features and customer service as key features for improving strategic position.
Competitive Questions and Factors
- Business-level strategy addresses how to compete effectively in the market.
- Key variables that managers manipulate for competition include cost and value.
Differentiation and Value Increase
- Unique features enable firms to charge premium prices.
- A differentiation strategy aims to create higher value through unique product features while maintaining similar costs to competitors.
Value Drivers and Complements
- Important value drivers include complements, customer service, and product features.
- Bundling products and services that are consumed together enhances perceived value.
Economies of Scale and Learning Curve
- Economies of scale lead to decreased costs per unit as output increases due to fixed costs remaining constant.
- The learning curve decreases costs as workers gain efficiency through repetition of tasks.
Strategic Cost Management
- A cost-leadership strategy aims to minimize expenses while maintaining acceptable value.
- Firms that achieve differentiation parity at lower costs successfully implement cost-leadership.
Competitive Forces and Market Space
- Competitive forces like the threat of entry, power of suppliers, and power of buyers can erode margins for both differentiation and cost-leadership strategies.
- Blue ocean strategies create new market spaces, making competition irrelevant through value innovation.
Challenges in Strategy Implementation
- Retailers face challenges in implementing blue ocean strategies by needing to cut costs while increasing value.
- Formulating a business strategy is complex, as numerous strategic options abound.
Blue Oceans vs. Red Oceans
- Blue oceans signify untapped market spaces with increased demand.
- A company successfully engaging in value innovation can avoid competition entirely.
Strategic Leaders and Trade-offs
- Strategic leaders must recognize the importance of trade-offs to achieve successful strategic positioning.
- Firms risk being "stuck in the middle," unable to achieve both increased value and reduced costs.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge on strategic management concepts with these flashcards designed for MGT 498. Learn about business strategies, competitive advantages, and more in a quick and effective manner. Perfect for exam preparation and enhanced understanding of strategic frameworks.
