Chapter 7

Question 1

Business Strategy

Answer 1

A strategy delineating how a business unit competes with its rivals; also called competitive strategy.

Question 2

Business Unit

Answer 2

An organizational entity with its own unique mission, set of competitors, and industry.

Question 3

Competitive Advantage

Answer 3

A state whereby a business unit’s successful strategies cannot be easily duplicated by its competitors.

Question 4

Differentiation Strategy

Answer 4

A generic business unit strategy in which a larger business produces and markets to the entire industry products or services that can be readily distinguished from those of its competitors.

Question 5

First-Mover Advantages

Answer 5

Benefits derived from being the first firm to offer a new or modified product or service.

Question 6

Focus-Differentiation Strategy

Answer 6

A generic business unit strategy in which a smaller business produces highly differentiated products or services for the specialized needs of a market niche.

Question 7

Focus-Low Cost- Differentiation Strategy

Answer 7

A generic business unit strategy in which a smaller business produces highly differentiated products or services for the specialized needs of a select group of customers while keeping its costs low.

Question 8

Focus-Low Cost Strategy

Answer 8

A general business unit strategy in which a smaller business keeps overall costs low while producing no-frills products or services for a market niche with elastic demand.

Question 9

Generic Strategies

Answer 9

Strategies that can be adopted by business units to guide their organizations.

Question 10

Intrapreneurship

Answer 10

The creation of new business ventures within an existing firm.

Question 11

Low Cost Differentiation Strategy

Answer 11

A generic business unit strategy in which a larger business unit maintains low costs while producing distinct products or services industry- wide for a large market with a relatively inelastic demand.

Question 12

Low Cost Strategy

Answer 12

A generic business unit strategy in which a larger business produces, at the lowest cost possible, no-frills products and services industry-wide for a large market with a relatively elastic demand.

Question 13

Micro-Localization

Answer 13

Customizing products and services to suit the taste and needs of diverse consumers across a nation or region.

Question 14

Multiple Strategies

Answer 14

A strategic alternative for a larger business unit in which the organization simultaneously employs more than one of the generic business strategies.

Question 15

Process Innovations

Answer 15

A business unit’s activities that increase the efficiency of operations and distribution.

Question 16

Product Innovations

Answer 16

A business unit’s activities that enhance the differentiation of its products or services.

Question 17

Quality

Answer 17

The features and characteristics of a product or service that allow it to satisfy stated or implied needs.

Question 18

Strategic Group

Answer 18

A select group of direct competitors who have similar strategic profiles.

Question 19

Structural Innovations

Answer 19

Modifying the structure of the organization and/or the business model to improve competitiveness.

Question 20

Value Innovations

Answer 20

Modifying products, services, and activities in order to maximize the value delivered to customers.