Unit 11.7

Question 1

A firm creates competitive advantage by…

Answer 1

strategically positioning itself in the market in some way that is unique and important to its customers

Question 2

3 Fundamental Approaches to achieving Competitive Advantage

Answer 2

1) Cost Leadership
2) Differentiation
3) Focus

Question 3

Cost Leadership

Answer 3

Becoming the lowest-cost producer in an industry through experience and efficiency. Appeals to cost-sensitive customers.

Question 4

Differentiation

Answer 4

Attempting to be unique in an industry within a broad market. Premium priced products but kept at a cost less than the pricing differential.

Question 5

Focus

Answer 5

Identify market niches tailor specific solutions that meet the unique requirements of the market segment.

Question 6

Firms that pursue a Focus strategy will also…

Answer 6

pursue a cost leadership or differentiation strategy, but within the niche that the firm serves. (Usually differentiation)