Learn Smart 5

Question 1

Large companies often employ multibrand strategies to better compete with

Answer 1

companies that employ a focused differentiation strategy

Question 2

Which of the following allow a company to sell directly to customer effectively?

Answer 2

• Maintaining a direct sales staff

- conducting sales through a company website

Question 3

Improving customer service or adding extra services are ways to manage the value chain to create product

Answer 3

differentiation

Question 4

Companies can provide superior customer value by offering products with features that

Answer 4

are cheaper for a consumer to use

Question 5

Successful differentiation strategies allow companies to

Answer 5

• cultivate buyer loyalty

- increase unit sales

Question 6

A differentiation strategy might fall in which situations?

Answer 6

• When consumers see little value in the unique features of a product
• when products and services can be quickly imitated

Question 7

Best-cost provider strategies are intended to provide value- conscious buyers with

Answer 7

-a quality product at a relatively low price

Question 8

A company with a value chain system that sells directly consumer is able to

Answer 8

bypass the costs of distributors

Question 9

What pitfalls should low cost providers avoid?

Answer 9

• Fixating on cost reduction to the exclusion of product features
• relying on a cost reduction approach that is easy to copy

Question 10

Signaling product value as a differentiation strategy is especially important when

Answer 10

-the nature of the differentiation is based on intangible features

Question 11

A company that employs best-cost provider strategy is vulnerable to which of the following?

Answer 11

• companies that employ a low-cost strategy

- companies that employ a high end differentiation strategy

Question 12

Companies use differentiation strategies when consumers preferences are

Answer 12

• too diverse for a standardized product offering

Question 13

Hotels differentiate their services by offering

Answer 13

• dining in the hotel
• an extensive range of guest amenities
• large rooms

Question 14

T/F
if a company’s efforts to differentiate its products are met with consumer disinterest, the company puts itself at risk for lower profits

Answer 14

T

Question 15

Focused low-cost strategies are common for companies that produce what?

Answer 15

-generic goods that imitate name brand products

Question 16

How does Nucor corporation produce steel at a far lower cost than traditional steel mills

Answer 16

• a lower capital investment
• a smaller workforce
• lower operating costs

Question 17

Coordinating with retailer allows a company to do which of the following?

Answer 17

• fill orders more accurately
• enhance the buying experience
• improve the companys image

Question 18

In a market where buyer preferences are diverse, how can industry rivals differentiate their products?

Answer 18

-offer products that appeal to specific buyers

Question 19

To achieve a cost advantage in a market niche, companies must

Answer 19

• use cost drivers to keep production costs low

- omit nonessential steps

Question 20

If a low-cost provider has invested heavily in its current means of operating

Answer 20

-it will be expensive for the provider to shift to a new technology

Question 21

in gaining a cost advantage over competitors, a low cost provider must offer

Answer 21

services and features that buyers think are essentaial

Question 22

how do companies with a focused, low-cost strategy to secure a competitive advantage?

Answer 22

-serving niche market customer at a lower cost than rivals

Question 23

which of the following companies are noted for their successful use of low-cost provider strategies?

Answer 23

• Bic
• Walmart
• Vizio

Question 24

which of the following allow a company to sell directly to customer effectively

Answer 24

• maintaining a direct sales staff

- conducting sales through a company website

Question 25

Nucor corporation eliminates many steps in the steel manufacturing process by using what equipment?

Answer 25

electric arc furnaces

Question 26

which companies employ a focused low-cost strategy?

Answer 26

• Sleep-Inn
• Motel 6
• Super 8

Question 27

Although successful low-cost providers continually look for ways to save money, they also understand the importance of spending money on

Answer 27

resources that further eliminate costs

Question 28

As part of a differentiation strategy, what signals tell customer that the company’s products have superior value?

Answer 28

• ads emphasizing a products notable attributes
• higher quality sales materials
• more appealing packaging than competing products

Question 29

A low-cost provider strategy is risky if a competitor

Answer 29

discovers a lower-cost value approach

Question 30

In terms of a company strategy based on differentiation, what are the risks of offering mostly insignificant improvements in quality or service

Answer 30

• decreased customer loyalty

- lower company profits

Question 31

which companies have a well-defined market niche?

Answer 31

• Tesla
• Fox News
• Blue Nile

Question 32

Differentiation strategies fail when which of the following occur?

Answer 32

• When buyers don’t value a product of brands uniqueness

- When competitors match a company’s differentiation strategy

Question 33

A particular differentiation strategy has a better chance of succeeding when

Answer 33

there are few rival companies using the same approach

Question 34

A company that employs a focused differentiation strategy may experience intense competition if

Answer 34

the market segment becomes too attractive

Question 35

What can a business use to reduce production costs for a cost-advantage strategy?

Answer 35

• automatic robotic technology

- computer -assisted design

Question 36

A low-cost provider can use low prices to

Answer 36

persuade potential customer to switch brands

Question 37

Companies can increase customer satisfaction by incorporating such tangible features as

Answer 37

• Improved functions
• More appealing product specifications
• Updated Styling

Question 38

What methods help a company use cost drivers effectively ?

Answer 38

• Capturing all available economics of scale
• improving supply chain efficiency
• Operating facilities at full capacity

Question 39

Focusing on a single market niche is an attractive strategy for what type of firm?

Answer 39

Small companies that lack the resources to pursue a broader customer base

Question 40

Which of the following is one option that companies have for translating a low-cost advantage into profit performance?

Answer 40

• under pricing competitors

Question 41

Differentiation strategies can increase a company’s profitability if

Answer 41

• Increased strategies are more than enough to cover the costs of differentiation
• Product prices can be raised sufficiently

Question 42

A company that develops a strong relationship with its suppliers is more likely to have its supply needs prioritized

Answer 42

when industry supply is insufficient to meet overall demand

Question 43

Online systems and advanced software can help a company achieve operating efficiency by

Answer 43

• Reducing parts inventories

- Cutting production times

Question 44

Companies can create a differentiation-based competitive advantage by incorporating intangible features such as

Answer 44

appealing to buyer desires for prestige

Question 45

Revamping the value chain by coordinating with suppliers can be expected to

Answer 45

• Speed delivery to end customers

- Speed up new product development cycles

Question 46

Attempts to use low-cost advantage to attack rival companies with lower product prices can result in which of the following?

Answer 46

• Retaliatory price cuts
• A price war among several rivals
• Reduced profits

Question 47

Which of the following are good opportunities for a company to pursue a low-cost provider strategy?

Answer 47

• When consumers use a product offered by rival companies in the same way
• When rivals offer virtually identical products
• When price competition among competitors is vigorous

Question 48

Focused strategies differ from low-cost provider and differentiation strategies by

Answer 48

concentrating attention on a market niche

Question 49

In terms of differentiation strategy, fast-paced technology change and quickly evolving product features can

Answer 49

• Help companies set themselves apart with different products
• Increase buyer interest

Question 50

Which situations make it more likely that a focused differentiation strategy will be successful?

Answer 50

• Few rivals attempt to specialize in the same niche
• The industry has many different niches
• Industry leader choose not to compete in the niche