Chapter5—Business-Level Strategy.doc

Chapter5Business-Level StrategyTRUE/FALSE1. The goal of business-level strategy is to earn above-average returns.ANS:TPTS:1DIF:MediumREF:982. A business-level strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage in specific product markets.ANS:TPTS:1DIF:MediumREF:983. A low-cost position in the industry is not a valuable defense against rivals when competing on the basis of price.ANS:FPTS:1DIF:MediumREF:106-1094. A risk of the differentiation strategy is that the firms means of differentiation may eventually not provide value to the customer.ANS:TPTS:1DIF:EasyREF:110-1135. A flexible manufacturing system is a computer-controlled process used to produce a variety of products in moderate, flexible quantities with minimal manual intervention.ANS:TPTS:1DIF:MediumREF:1196. A customer relationship management system will allow firms to identify the trade-offs that customers are willing to make between differentiated features and low cost.ANS:TPTS:1DIF:EasyREF:119-120MULTIPLE CHOICE1. A firms core strategy is its _ ernationalANS:CPTS:1DIF:EasyREF:982. When selecting a business level strategy, the firm must determine all of the following EXCEPTa.How will the customers needs be satisfied?b.Who is the customer?c.What are the customers needs?d.Why should these customers needs be satisfied?ANS:DPTS:1DIF:MediumREF:993. Before the firm decides what products to offer and what benefits and features they will have, the firm must decide all the following questions EXCEPTa.who the firm should serve.b.what core competencies are needed to satisfy customer needs.c.what needs the firm should satisfy.d.when the customers needs should be satisfied.ANS:DPTS:1DIF:MediumREF:101-1034. Business-level strategies are concerned specifically witha.creating differences between the firms position and its rivals.b.selecting the industries in which the firm will compete.c.how functional areas will be organized within the firm.d.how a business with multiple physical locations will operate one of those locations.ANS:APTS:1DIF:MediumREF:1035. Which value creating strategies best satisfy customer needs?a.Firm resourcesb.Capabilitiesc.None of the above.d.Core competenciesANS:DPTS:1DIF:MediumREF:103-1046. A cost leadership strategy provides goods or services with features that area.acceptable.b.unique.c.substandard.d.mediocre.ANS:APTS:1DIF:EasyREF:1067. A company pursuing the differentiation or focused differentiation strategy would tend toa.have highly efficient systems linking suppliers products with the firms production processes.b.have strong capabilities in basic research.c.use economies of scale.d.make investments in easy-to-use manufacturing technologies.ANS:BPTS:1DIF:Medium8. When a products unique attributes provide value to customers, the firm is implementinga.a differentiation strategy.b.a cost leadership strategy.c.an integrated cost leadership/differentiation strategy.d.a single-product strategy.ANS:APTS:1DIF:MediumREF:1109. 54.The focused differentiation strategy differs from the differentiation strategy in thata.the focused differentiators have a broader competitive scope.b.the value-creating activities of focused differentiators are more constrained.c.there are fewer risks with the focused differentiation strategy.d.focused differentiators target a narrower customer market.ANS:DPTS:1DIF:MediumREF:116-11710. The integration of a cost leadership and a differentiation strategya.is challenging because of the inherent difficulties in balancing primary and support activities.b.forces a firm to adapt more slowly to changes in its envi