Business-level Strategy

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Question 1
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A firm's business model should contain three components: what is to be satisfied, who is to be satisfied, and how they will be satisfied.

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Question 2
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The way a product is differentiated from other products of its type and the price of the product determine which product a customer chooses to satisfy his or her needs.

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Question 3
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Companies with a differentiation advantage tend to charge a lower price for their products.

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Question 4
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In commodity markets, competitive advantage goes to the company that has the lowest costs.

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Question 5
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A company has a competitive advantage if it can increase costs relative to rivals.

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Question 6
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Differentiation can help a company to grow overall demand and capture market share from its rivals.

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Question 7
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Differentiation leads to high brand loyalty, which in turn significantly increases the threat of new firms entering the industry.

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Question 8
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Market segmentation refers to the process of subdividing a market into clearly identifiable groups of customers with similar needs, desires, and demand characteristics.

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Question 9
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A generic business-level strategy is a strategy that gives a company a specific form of competitive position and advantage over its rivals that results in above-average profitability.

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Question 10
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A product's appeal to customers' desires cannot be considered a source of differentiation.

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Question 11
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An efficiency frontier shows all of the different positions that a company can adopt with regard to differentiation and cost.

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Question 12
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Mike's Eatery, a fast food chain, neither customizes its product offerings nor sells new products based on  market segments. Mike's Eatery is pursuing standardization strategy.

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Question 13
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When a company decides to serve a limited number of segments, or just one segment, it is pursuing a segmentation strategy.

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Question 14
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When a company already has a low-cost structure, it has to give up a lot of differentiation in its product offering to get additional cost reductions.

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Question 15
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All focus strategies entail serving a specific market segment using a differentiation approach.

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Question 16
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The generic business-level strategies are cost leadership, differentiation, and mass marketing.

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Question 17
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A low-cost company is often best positioned to survive price rivalry in its industry.

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Question 18
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The brand loyalty enjoyed by the differentiated company will not always protect it from substitute goods and services.

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Question 19
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Companies that focus on the higher-income or higher-value end of the market will tend to have a higher cost structure.

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Question 20
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Companies that follow a standardization strategy ignore the many different market segments in an industry and position their products to appeal to the average customer.

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