Which of the following are types of competitive strategies? Show a. linked advantage b. value chain activities c. focused low-cost d. broad low-cost e. broad differentiation C, D, E In gaining a cost advantage over competitors, a low-cost provider must offer a. services and features that buyers think are essential. b. regular opportunities for consumers to win special prizes and cash bonuses. c. nonessential services and features to increase the perceived value of a product. d. a rival competitor's products at higher prices than the competitor. a. services and features that buyers think are essential. One of the most effective ways to manage a value chain efficiently is to a. attend value chain meetings. b. hire more employees. c. work with rivals to provide better service. d. find innovative ways to keep costs down. d. find innovative ways to keep costs down. Which companies are noted for their successful use of low-cost provider strategies? a. Walmart b. Nature's Path c. Bic d. Uber e. Starbucks A, C, D Which of the following are good opportunities for a company to pursue a low-cost provider strategy? a. when competitors go out of business b. when rivals offer virtually identical products c. when consumers use a product offered by rival companies in the same way d. when price competition among competitors is vigorous e. when there is a shortage of high-priced brands B, C, D A company's competitive strategy is an effort to do which of the following? a. ignore the company's target market b. ward off competitors c. achieve competitive advantage d. ward off customers e. please customers B, C, E Which of the following is a typical course of action for companies that pursue low-cost leadership? a. offering higher prices than their rivals b. offering lower prices than their rivals c. offering niche products with a higher price tag d. merging with rival companies to sell higher-priced products b. offering lower prices than their rivals Low-cost providers need to be especially careful not to make the mistake of a. cutting prices too aggressively. b. amassing too many customers. c. angering their competitors. d. being too concerned about employees. a. cutting prices too aggressively. A factor that has a strong influence on a company's costs is called a. a cost driver. b. a cost edge. c. a cost advantage. d. a cost leader. a. a cost driver. Successful differentiation strategies allow companies to a. command cheaper prices for their products. b. cultivate buyer loyalty. c. increase unit sales. d. find cheaper distribution methods. B, C Although successful low-cost providers continually look for ways to save money, they also understand the importance of spending money on a. frequent, extensive remodeling. b. expensive perks for managers and employees. c. resources that further eliminate costs. d. large inventories as a threat to rival companies. c. resources that further eliminate costs. A low-cost provider can use low prices to a. offer premium features and services for its customers. b. increase its number of employees. c. encourage best-cost providers to change competitive strategies. d. persuade potential customers to switch brands. d. persuade potential customers to switch brands. Which strategies are recommended for enhancing differentiation based on value drivers? a. Create product features that appeal to a wide range of buyers. b. Avoid innovative strategies that are hard to replicate. c. Pursue quality improvement. d. Strive to achieve technological advances. e. Reduce the functional attributes of a product. A, C, D What pitfalls should low-cost providers avoid? a. fixating on cost reduction to the exclusion of product features b. advertising the low prices of the products they sell c. using employee training as an approach to cost reduction d. relying on a cost-reduction approach that is easy to copy e. regularly assessing overall company performance A, D
What can a company do to make its products more economical for customers? a. Increase product reliability. b. Incorporate energy-efficient features. c. Decrease product reliability. d. Increase maintenance requirements. A, B Companies use differentiation strategies when consumers' preferences are a. too diverse for a standardized product offering. b. fixated on cost reduction. c. too sophisticated for technological breakthroughs. d. indifferent to the needs of the company. a. too diverse for a standardized product offering. In a market where buyer preferences are diverse, how can industry rivals differentiate their products? a. Offer products that appeal to specific buyers. b. Offer free products to lure customers away from competitors. c. Offer competitors advice on customer service. d. Offer the same products that competitors have. a. Offer products that appeal to specific buyers. True or false: If a company's efforts to differentiate its products are met with consumer disinterest, the company puts itself at risk for lower profits. true Improving customer service or adding extra services are ways to manage the value chain to create product _______. differentiation Companies can provide superior customer value by offering products with features that a. reduce product safety for easier handling. b. reduce product usability. c. are cheaper for a consumer to use. d. increase the overall cost to the consumer.
c. are cheaper for a consumer to use. Hotels differentiate their services by offering a. an extensive range of guest amenities. b. locks on all guest room doors. c. larger rooms. d. dining in the hotel. A, C, D Which companies have a well-defined market niche? a. Blue Nile (online jewelry) b. Tesla Motors (electric cars) c. Fox News Channel (cable television journalism) d. Coca Cola (soft drinks and other beverages) e. Toyota (automobiles) A, B, C A differentiation strategy might fail in which situations? a. when products and services can be quickly imitated b. when consumers are interested in a company's unique product c. when consumers see little value in the unique features of a product d. when a firm searches for new ways to create product value A, C How do companies with a focused, low-cost strategy strive to secure a competitive advantage? a. putting rivals out of business b. serving niche market customers at a lower cost than rivals c. serving a broader market segment at the same cost as rivals d. offering a wide range of products and services b. serving niche market customers at a lower cost than rivals Which company offers premium products and services to upscale buyers? a. Safeway b. Target c. Rite-Aid d. Rolls-Royce d. Rolls-Royce Which situations make it more likely that a focused differentiation strategy will be successful? a. The target market niche is very small. b. Competitors find it easy to meet the needs of niche buyers. c. Industry leaders choose not to compete in the niche. d. Few rivals attempt to specialize in the same niche. e. The industry has many different niches. C, D, E Focused strategies differ from low-cost provider and differentiation strategies by a. offering free merchandise to returning customers. b. concentrating attention on a market niche. c. teaming up with rivals to create new markets. d. concentrating attention on a large segment of a particular market. b. concentrating attention on a market niche. To achieve a cost advantage in a market niche, companies must a. increase company personnel. b. offer products that appeal to all buyer groups. c. omit nonessential steps. d. use cost drivers to keep production costs low. C, D Companies that pursue a focused differentiation strategy are at risk from a. inventory complexity. b. rivals with more brands or great expertise and capabilities. c. ineffective competition by rival firms. d. personnel issues related to a narrow customer base. b. rivals with more brands or great expertise and capabilities. A company that employs a best-cost strategy achieves profitability by a. reducing its marketing and human resources budget. b. overpricing rivals whose products are similar. c. adding premium features to its products at a lower cost than rivals. d. adding features of incrementally little value to its products. c. adding premium features to its products at a lower cost than rivals. Whole Foods Market employs a focused differentiation-based strategy by offering what products? a. cheap, mostly non-organic foods b. organic, minimally processed foods c. high standards for food quality d. locally grown foods e. cash rewards for repeat customers B, C, D Best-cost providers target which consumer groups? a. price-conscious buyers b. value-conscious buyers c. sophisticated buyers d. niche market buyers b. value-conscious buyers Focusing on a single market niche is an attractive strategy for what type of firm? a. large companies that have trouble managing their finances and inventory b. medium-sized companies with the resources to pursue a broader customer base c. small companies that are on the verge of filing bankruptcy d. small companies that lack the resources to pursue a broader customer base d. small companies that lack the resources to pursue a broader customer base A company that employs a best-cost provider strategy is vulnerable to which of the following? a. companies that employ a high-end differentiation strategy b. companies that employ a niche market strategy c. companies that employ a low-cost strategy d. companies that employ a competitive strategy A, C Large companies often employ multibrand strategies to better compete with a. companies that employ a multiregional differentiation strategy. b. companies that employ an employee-focused strategy. c. companies that employ a focused differentiation strategy. d. companies that employ a mass-market advertising strategy. c. companies that employ a focused differentiation strategy. Best-cost provider strategies are intended to provide value-conscious buyers with a. a cheap product at an expensive price. b. a poorly made product at a cheap price. c. a premium product at a relatively high price. d. a quality product at a relatively low price. d. a quality product at a relatively low price. To succeed with a low-cost provider strategy, what must a company have? a. the resources to keep costs lower than its rivals b. employees who are eager to learn c. administrators who have superior negotiating skills d. superior customer-service training a. the resources to keep costs lower than its rivals Best-cost providers differ from low-cost providers by a. lowering customer-service expectations. b. minimizing employee training and initiatives. c. providing basic products at the lowest prices. d. offering attractive features at a lower cost than competitors. d. offering attractive features at a lower cost than competitors. Match the type of strategy (on the left) with its approach to gaining a competitive advantage (on the right). Low Cost - Cost Advantage over rivals Differentiation - Greater perceived value for consumers Best Cost - Better cost and value than the average rival What must a best-cost provider do to remain competitive? a. Offer products at the same price as rival companies. b. Offer rivals a reason to change their product lines. c. Offer better products at higher prices. d. Offer consumers a more attractive value proposition. d. Offer consumers a more attractive value proposition. A company that pursues a focused strategy must have the resources to a. create products that appeal to a broad range of buyers. b. satisfy the needs of its niche market. c. sell brand-name products at cheap prices. d. offer employee initiatives to please customers. b. satisfy the needs of its niche market. What are the three approaches that companies can use to gain a competitive advantage? a. best-cost b. low-cost c. low-value d. differentiation A, B, D Which of the following is one option that companies have for translating a lowWhat option do companies have for translating a low-cost advantage into profit performance? a cost driver.
What are two ways a company can translate a lowWhat are the two ways a company can translate its low-cost advantage over rivals into attractive profit performance? Eliminating or curbing nonessential activities and doing a better job than its rivals in performing essential activities.
What is lowLow-cost strategy enables the firm to sell its product/service with a lower price compared to its competitors because of lower costs of producing products/service; as a result of this, they win a competitive advantage in the industry.
What does a company have to do to achieve lowTo achieve a low-cost provider status, a company must incorporate features and services that buyers consider essential, keeping the frills down to a minimum. A company has two options for translating a low-cost advantage over rivals into attractive profit performance.
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