CH07 Flashcards
A firm’s competitive advantage is not necessarily revealed in higher profitability; it may be reflected in: [See p.157]
a. Expanding market share
b. An aggressive quest for acquisitions
c. Increasing employee bonuses
d. Expanding market share and/or increasing employee bonuses
d
As markets become more turbulent and unpredictable, seizing opportunities to establish competitive advantage depends primarily upon: [See p.158]
a. Good forecasting
b. Quick identification of emerging changes
c. Speed of response
d Agility: quick identification of emerging changes and speed in responding to them
d
Conceiving of innovative business models typically involves:[See p.160]
a. Using analogies to transfer and adapt business models from other business sectors
b. Using brain storming to generate creative ideas
c. Deploying articficial intelligence
d. Exploring the interface between custimeer need and the firm’s resources and capabilities
a
In strategic management, the expression “blue oceans” refers to:[See p.160]
a. Radical innovation
b. The potential offered by uncontested market space
c. The campaign to reduce pollution in the world’s oceans
d. Cost reduction through offshoring production
b
Isolating mechanisms are:[See p.162]
a. Barriers to the erosion of interfirm profit differentials
b. Mechanisms that impede the equilibration of rents between industries
c. The same as “barriers to mobility”
d. Sources of disequilibrium that cause the profitability of different firms in an industry to diverge over time
a
Pre-emption strategies can help sustain a firm’s competitive advantage through:[See p.163]
a. Reducing the opportunities available to competiors to invade the firm’s strategic space
b. Threatening compeitors with retaliation
c. Engaging in limit pricing that makes entry unprofitable for would-be rivals
d. Reinforcing barriers of mobility
a
Causal ambiguity allows a firm’s competitive advantage to be sustained because potential rivals are:[See pp.163-164]
a. Deterred from directly competing with the advantaged firm
b. Unable to identify the sources of the advantaged firm’s superior performance
c. Unable to acquire the resources needed to compete against the advantaged firm
d. All the above
b
In retailing, the cost advantages of large retail chains (such as Wal-Mart in the US, Tesco in Britain, Metro in Germany, and Carrefour in France) is primarily the result of:[See pp.179-185]
a. Scale economies in operating large individual retail units
b. Lower costs of bought-in products as a result of superior bargaining power
c. Higher capacity utilization in retailing and distribution
d. Using superior bargaining power to pay lower wage rates
b
Compared with simple products like flour or toilet paper, complex products such as cars or hotels:[See p.188]
a. Fewer opportunities for differentiation
b. Greater potential for differentiation
c. Offer similar opportunities for differentiation–it all depends upon the creativity of product designers and marketers
d. Fewer incentives for differentiation because of their high costs
b
Which of the following product categories offers the greatest potential for differentiation?[See pp.188-189]
a. Clothes and restaurants
b. Cement and wheat
c. Jet fuel for airline jets
d. Sulfur and ethylene
a
What is the difference between differentiation and segmentation?[See p.189]
a. There is no difference between the two
b. Differentiation deals with the “how” a firm chooses to compete, while segmentation describes “where” inthe entire market a firm chooses to compete
c. Differentiation is a firm’s strategic choice, whereas segmentation is given by its environment
d. Segmentation is the head of the marketing department’s responsibility, whereas the CEO is in charge of differentiation
b
Banks spend more money on their head office buildings than most other large corporations because:[See p.195]
a. They tend to be located in financial centers where property prices are high
b. They offer “experience goods”, hence they need to signal wealth and stability
c. Their CEOs are more committed to the display of wealth than other CEOs
d. Because their products are essentially commodities, they need to find alternative ways of differentiating.
b
“Experience goods” are those which:[See p.194]
a. Have performance attributes that are difficult to ascertain at the moment of purchase
b. Only customers with previous experience of using these goods would rationally consider purchasing
c. Only firms with wide experience in an industry would rationally consider making
d. Have been produced by the firm furthest down the learning curve
a
Firms pursuing differentiation advantages will implement their strategies differently from those pursuing cost advantage. The implementation of differentiation strategy is likely to feature:[See p.199]
a. Employee remuneration based upon individual productivity
b. Frequent performance reporting
c. High levels of outsourcing
d. Low levels of job specialization
d
The examples of Ikea and Southwest Airlines demonstrate:[See p.199]
a. The power of brand as a factor of success
b. The quality of the top management of these firms
c. The power of advertising
d. How a cost-leadership strategy can be combined with distinctive product differentiation
d
