Business-level Strategy Creating And Sustaining Competitive Advantages

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Questions Bank

Strategic Management Creating Competitive Advantages
Analyzing the External Environment of the Firm Creating Competitive Advantages
Assessing the Internal Environment of the Firm
Recognizing a Firm's Intellectual Assets Moving beyond a Firm's Tangible Resources
Business-Level Strategy Creating and Sustaining Competitive Advantages
Corporate-Level Strategy Creating Value through Diversification
International Strategy Creating Value in Global Markets
Entrepreneurial Strategy and Competitive Dynamics
Strategic Control and Corporate Governance
Creating Effective Organizational Designs
Strategic Leadership Creating a Learning Organization and an Ethical Organization
Managing Innovation and Fostering Corporate Entrepreneurship

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Question 1

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Overall cost leadership is a generic strategy unlike others that does not require a tight set of interrelated tactics.

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Question 2

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An example of a firm applying the overall cost leadership generic strategy in a value-chain activity would be to automate the production assembly line to reduce scrappage from quality errors.

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Question 3

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The experience curve is a factor central to an overall cost leadership strategy and refers to how business learns to increase costs as it gains experience with production processes.

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Question 4

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The five-forces model suggests that with intense competition an overall low-cost position will not enable a firm to achieve above-average returns.

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Question 5

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Factors that lead to a low-cost position also provide substantial entry barriers to substitute and new products as is demonstrated by the retailer, Aldi, whose focus on minimizing costsacross the entire operation permits it to position well against competitors such as Walmart.

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Question 6

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If the overall cost leadership strategy is to provide sustainable competitive advantage, all activities in the value-chain need to be evaluated including the relationships among the value-chain activities.

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Question 7

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A firm can differentiate itself in a support activity by purchasing high-quality components to enhance product image such as Apple does with its laptop computers.

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Question 8

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Caterpillar uses data analytics to differentiate itself from competitors by providing information services.

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Question 9

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Combination strategies, such as integrating overall low cost and differentiation, makes it easier for rivals to duplicate or imitate because it is harder for the primary firm to providevalue.

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Question 10

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Airlines such as Emirates exploit the profit pool for competitive advantage by adding fees for a variety of services such as access to airport lounges.

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Question 11

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A pitfall of integrated overall cost leadership and differentiation is underestimating the expenses associated with coordinating value-creating activities in the extended value chain.

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Question 12

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Once established, competitive advantages last forever whether the firm is in a high technology environment or not.

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Question 13

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A platform business is like a matchmaker in that it can bring together buyers and sellers. An example of a successful platform provider is Facebook. By attracting and retaining users through expanding services it differentiates itself from more narrowly-focused competitors such as Twitter.

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Question 14

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A platform business such as Airbnb leverages data analytics to differentiate its offer from that of competitors such as VRBO.

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Question 15

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The market life cycle should be used for short-run forecasting because it provides a conceptual framework for understanding what changes typically occur over the life of an industry.

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Question 16

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An important advantage of first movers in a market is that they may establish brand recognition that may later serve as an important switching cost.

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Question 17

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Given the attractiveness of premium pricing during the growth stage of the market life cycle, managers should emphasize short-term results to increase profits.

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Question 18

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A need for turnaround occurs only during the maturity or declining stage of the life cycle.

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Question 19

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Few turnarounds require firms to analyze both the external and internal environments relevant to their firm.

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Question 20

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Piecemeal productivity improvements can be used by a mature business in need of a turnaround.

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