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Exam 5: Business-Level Strategy: Creating and Sustaining Competitive Advantages

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Question 31

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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.

A) True
B) False

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Question 32

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A low-cost position protects firms against powerful buyers.

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B) False

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Question 33

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Discount retailers like Walmart and dollar stores are prime substitutes for Aldi,because Aldi focuses on minimizing costs across its operations.

Convincing rivals not to enter a price war,protection from customer pressure to lower prices,and the ability to better withstand cost increases from suppliers characterize which type of competitive strategy?

Many firms facing a turnaround situation try to reduce their costs by outsourcing the production of many inputs.

The Commerce Bank gains customers by using reverse positioning to structure its offers.It pared down its offers to just four checking accounts.

Competitive parity on the basis of differentiation permits a cost leader to maximize disadvantages and turn them into higher profits than competitors.

Firms in turnaround situations find that cutting administrative expenses and inventories and speeding up collection of receivables provide no real value.

The primary aim of strategic management at the business level is

As markets mature,competition on the basis of differentiation is preferable to price competition.

Renault both lessens the degree of rivalry it faces and increases entry barriers for new entrants by increasing productivity and lowering unit costs.

Which of the following is not a potential pitfall of an integrated overall low cost and differentiation strategy?

As markets mature,

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

The increasing use of technology in low tech industries has made competitive advantages more sustainable.

Firms in turnaround situations find that cutting administrative expenses and inventories and speeding up collection of receivables are ineffective strategies.

Improving business processes by reengineering them,benchmarking specific activities against industry leaders,encouraging employee input to identify excess costs,increasing capacity utilization,and improving employee productivity lead to a significant overall gain.These are examples of which turnaround strategy used by successful companies?

The experience curve concept suggests that production costs tend to decrease as production increases.

Rivals would find it difficult to challenge Atlas Door in the short run because of

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