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Q:
While cost leadership requires rewards for cost reduction, product differentiation requires rewards for ________.
A) creative flair
B) efficiency
C) quantitative goals
D) production goals
Q:
(p. 124) At what level do firms begin to emerge as global enterprises with global approaches to production, sales, finance, and control?
A. Third
B. Fourth
C. Second
D. First
Q:
According to Porter, firms that are stuck in the middle attempt to sell
A) high-priced products and gain small market share.
B) low-priced products and gain large market share.
C) high-priced products and gain a large market share.
D) medium-priced products and gain medium market share.
Q:
(p. 124) MNCs are involved mainly in which of the following strategies?
A. Direct overseas investment
B. Capital repatriation
C. Joint research
D. Host financial policies
Q:
More recent work in the area of strategic management regarding Porter's assertion about being stuck in the middle
A) supports Porter's argument that firms that attempt to simultaneously pursue cost leadership and product differentiation will find themselves at a competitive disadvantage.
B) contradicts Porter's argument and finds that firms that successfully pursue cost leadership and product differentiation simultaneously can often expect to gain a sustained competitive advantage.
C) partially contradicts Porter's argument and finds that firms that successfully simultaneously pursue cost leadership and product differentiation can only expect to gain a temporary competitive advantage.
D) partially contradicts Porter's argument and finds that only firms in certain select industries can successfully simultaneously pursue cost leadership and product differentiation and gain a temporary competitive advantage.
Q:
(p. 124) Which of these represent the second level in the evolution of a global corporation?
A. Foreign licensing
B. Direct investment
C. Export-import
D. Bartering
Q:
In developing a compensation policy used to implement a product-differentiation strategy, firms will
A) hold individuals responsible for experiments that fail.
B) punish individuals for taking risks when their projects are not successful.
C) simultaneously use multiple dimensions to examine employee performance.
D) provide appropriate incentives for managers and employees to reduce costs.
Q:
(p. 124) Firms at what strategy level are called multinational corporations (MNCs)? A. First
B. Second
C. Third
D. Fourth
Q:
A ________ exists when firms are committed to engage in several related product-differentiation strategies simultaneously.
A) policy of substitution
B) policy of extrapolation
C) policy of exploration
D) policy of experimentation
Q:
(p. 124) The evolution of a global corporation often entails progressively involved strategy levels. What level has the minimal effect on existing product lines?
A. Foreign licensing
B. Export-import
C. Technology transfer
D. Direct investment
Q:
Small entrepreneurial firms
A) have numerous bureaucratic controls that impede cross-functional communication and thus slow innovation.
B) have relatively few bureaucratic controls that allow information and ideas to flow freely and to facilitate innovation.
C) have relatively few bureaucratic controls that impede cross-functional communication and thus slow innovation.
D) have numerous bureaucratic controls but information and ideas still flow freely and facilitate innovation.
Q:
(p. 124) Which country is expected to have a commanding lead in the size of its economy by 2020?
A. The United States
B. India
C. China
D.Japan
Q:
(p. 124) Overall, in less than 20 years, ______ countries will be overshadowed by ______ countries in their produced share of the world's output.
A. Oil producing; rich industrial
B. Rich industrial; developing
C. Developing; oil producing
D. Oil producing; gold producing
Q:
The Lockheed Corporation Skunk Works is an example of a(n)
A) cross-divisional or cross-functional team.
B) M-form structure.
C) U-form structure.
D) multidivisional structure.
Q:
(p. 123) Firms from which country lead the way in "direct foreign investment" in the United States?
A. Japan
B. India
C. China
D.United Kingdom
Q:
A ________ structure exists when individuals in a firm have two or more bosses simultaneously.
A) U-form
B) multidivisional
C) cross-divisional
D) matrix
Q:
(p. 123) The 100 largest U.S. global earn an average of ___ percent of their operating profits abroad.
A. 12
B. 69
C. 54
D. 37
Q:
The U-form structure used to implement a product-differentiation strategy
A) rarely uses temporary cross-divisional and cross-functional teams to manage the development and implementation of new, innovative, and highly differentiated products.
B) has simple reporting relationships.
C) often uses temporary cross-divisional and cross-functional teams to manage the development and implementation of new, innovative, and highly differentiated products.
D) has a small corporate staff.
Q:
(p. 123) The change in customer _______ behavior was the beginning of an evolution in international strategy. A. saving
B. living
C. purchase
D. moving
Q:
Which of the following bases of product differentiation is generally viewed as the most difficult to duplicate?
A) Product features
B) Reputation
C) Linkages with other firms
D) Location
Q:
(p. 123) ______ is the development of modified products and services, and the use of somewhat tailor-made messages, to meet the demands of a local population A. Globalization
B. Horizontal integration
C. Customization
D. Standardization
Q:
Research on architectural competence in pharmaceutical firms suggests that
A) not only do some firms possess this competence, but that other firms do not; firms without this competence have, on average, been able develop it with minimal investment.
B) very few firms possess this competence, but firms without this competence, on average, are able to develop it.
C) not only do some firms possess this competence, but also that other firms do not and firms without this competence have, on average, been unable to develop it.
D) virtually every firm possesses this competence to some extent.
Q:
(p. 123) ______ is the use of a common product, service, and message across all markets to create a strong brand image. A. Globalization
B. Horizontal integration
C. Standardization
D. Customization
Q:
Under which of the following conditions is the product mix advantage as a basis of product differentiation the least difficult to duplicate?
A) When the base of a product mix advantage is a common customer
B) When the mix of products is highly integrated with each other
C) If each of the products in a product mix has unique features
D) If a firm brings a series of products to market
Q:
(p. 123) ______ refers to the strategy of pursuing opportunities anywhere in the world that enable a firm to optimize its business functions in the countries in which it operates. A. Vertical integration
B. Horizontal integration
C. Globalization
D. Franchising
Q:
Product features, by themselves, are
A) usually not a source of temporary competitive advantage, but they can be a source of a sustainable competitive advantage.
B) usually not a source of either a temporary competitive advantage, or a source of a sustainable competitive advantage.
C) usually can be a source of both a temporary competitive advantage and a source of a sustainable competitive advantage.
D) usually not a source of sustained competitive advantage, but they can be a source of a temporary competitive advantage.
Q:
What factors affect a firms access to needed personnel?
Q:
Which bases of product differentiation is by far the most popular way for firms to try to differentiate their products but is identified as almost always being easy to duplicate?
A) Product mix
B) Product features
C) Customization
D) Distribution channels
Q:
Identify and briefly explain the five factors in the operating environment.
Q:
How do power curves help assess industry structure?
Q:
Which of the following bases of product differentiation is usually costly to duplicate?
A) Product features
B) Links with other firms
C) Reputation
D) Product mix
Q:
Which of the following bases of product differentiation is almost always easy to duplicate?
A) Product features
B) Product mix
C) Product customization
D) Consumer marketing
Q:
What are the problems in defining industry boundaries?
Q:
In a declining industry
A) product-differentiation efforts are focused on product refinement as a basis of product differentiation.
B) firms that are first movers can gain product-differentiation advantages based on perceived technological leadership.
C) highly differentiated firms may be able to gain product-differentiation advantages by preempting strategically valuable assets.
D) highly differentiated firms may be able to discover a viable market niche that will enable them to survive despite the overall decline in the market.
Q:
What is an industry? Why is it important to define industry boundaries?
Q:
How does jockeying for position escalate intensity of rivalry among competitors?
Q:
In emerging industries
A) firms that are first movers are unlikely to gain product-differentiation advantages based on buyer loyalty and high switching costs.
B) firms that are first movers can gain product-differentiation advantages based on perceived technological leadership.
C) product-differentiation efforts are focused on product refinement as a basis of product differentiation.
D) firms can sometimes be tempted to exaggerate the extent to which they have refined and improved their products and services.
Q:
With regard to the threat of suppliers, product differentiation
A) reduces the threat of suppliers because a firm with a highly differentiated product can pass increased costs on to customers.
B) increases the threat of suppliers because a firm with a highly differentiated product is unable to pass increased costs on to customers.
C) has no impact on the threat of suppliers.
D) can either increase or reduce the threat of suppliers.
Q:
How do substitutes affect industry structure?
Q:
When considering the impact of product differentiation on the threat of rivalry, product differentiation
A) reduces the threat of rivalry to zero.
B) increases the threat of rivalry by forcing each firm in an industry to compete directly with one another instead of allowing them to carve out their own unique product niche.
C) has no impact on the threat of rivalry.
D) reduces the threat of rivalry because each firm in an industry attempts to carve out its own unique product niche.
Q:
Identify and explain the factors/characteristics that make the buyer group powerful.
Q:
Which of the following statements regarding the impact of product differentiation on the threat of new entry is accurate?
A) Product differentiation helps reduce the threat of new entry by forcing potential new entrants to absorb costs associated with overcoming incumbent firms' product-differentiation advantages.
B) Product differentiation increases the threat of new entry by allowing potential new entrants to avoid costs associated with overcoming incumbent firms' product-differentiation advantages.
C) Product differentiation has no impact on the threat of new entry.
D) It is not possible to determine the impact of product differentiation on the threat of new entry.
Q:
What characteristics make a supplier group powerful? Explain.
Q:
According to Chamberlin, firms selling differentiated products and facing a downward sloping demand curve are in an industry described as
A) perfect competition.
B) monopolistic competition.
C) oligopolistic competition.
D) semi-structured competition.
Q:
How do cost disadvantages independent of size act as entry barriers?
Q:
In general, firms selling differentiated products face a demand curve that is
A) upward sloping.
B) horizontal.
C) vertical.
D) downward sloping.
Q:
Identify and briefly describe the major sources of barriers to entry.
Q:
Product differentiation is ultimately an expression of the ________ of individuals and groups within firms and is limited only by the ________ that exist, or that can be created, in a particular industry.
A) creativity; resources
B) resources; opportunities
C) creativity; opportunities
D) opportunities; resources
Q:
Explain the five force model of industry analysis as described by Porter. Give an example of each force.
Q:
When the television show "American Idol" shows the judges drinking beverages from cups with the Coca-Cola label, or when a corporate sponsor places its logo on a NASCAR car, this is an attempt at product differentiation by linking with other firms through
A) product placements.
B) reputation.
C) product mix.
D) architectural competence.
Q:
Define eco-efficiency. Identify the four key characteristics of eco-efficient corporations.
Q:
Which of the following bases of product differentiation attempts to create the perception that a firm's products or services are unusually valuable by focusing on links within and between firms?
A) Reputation
B) Product complexity
C) Consumer marketing
D) Product mix
Q:
Describes briefly the air, water and land pollution occurring in our environment. Provide examples of federal legislations that address each of these areas.
Q:
________ is the ability to use organizational structure to facilitate coordination among specific disciplines to conduct research.
A) Architectural competence
B) Cross-functional linking
C) Organizational coordination
D) Managerial leverage
Q:
Discuss the three profound social changes in the recent years that affect the performance of a firm.
Q:
Through which bases of competitive advantage do firms attempt to alter the perceptions of current and potential customers, whether or not specific attributes of a firm's products or services are altered?
A) Reputation
B) Location
C) Product customization
D) Consumer marketing
Q:
Identify and briefly describe the different factors comprising the remote environment.
Q:
Which of the following bases of product differentiation attempts to create the perception that a firm's products or services are unusually valuable by focusing on the relationship between a firm and its customers?
A) Linkages between functions
B) Product customization
C) Location
D) Product complexity
Q:
Describe the three tiers of environmental factors that affect the performance of a firm.
Q:
A firm's ________ is really no more than a socially complex relationship between a firm and its customers and can serve as a basis for product differentiation.
A) location
B) reputation
C) consumer marketing
D) architectural competence
Q:
The ability of companies that produce complex software packages to tailor these packages to the specific needs of their customers is an example of product differentiation through
A) complexity.
B) consumer marketing.
C) product customization.
D) timing.
Q:
(p. 114) Four factors are mentioned which affect a firm's access to needed personnel. One of these factors is:
A. Geographic location
B. Employee benefits
C. National employment rates
D. Availability of skills
Q:
Which of the following bases of product differentiation attempts to create the perception that a firm's products or services are unusually valuable by focusing directly on the attributes of the products or services a firm sells?
A) Product complexity
B) Product customization
C) Consumer marketing
D) Reputation
Q:
(p. 113) Purchasing behavior is often better predicted by:
A. Geographics
B. Demographics
C. Psychographics
D. Reputation
Q:
(p. 113) This term refers to descriptive characteristics that can be used to differentiate groups of present or potential customers.
A. Geographics
B. Demographics
C. Buyer behaviors
D. Psychographics
Q:
The most obvious way that firms can try to differentiate their products is by
A) making the product more complex.
B) introducing the product at the right time.
C) customizing the product for a particular segment.
D) altering the features of the products they sell.
Q:
(p. 113) While developing the customer profile, it is important to include:
A. Psychographic information
B. Market share
C. Experience
D. Management image
Q:
If an individual is considering purchasing a Toyota Camry or a Ferrari and decides that it is worth paying the extra money for the prestige that is associated with the Ferrari, the additional money the customer is willing to pay for the prestige is know as a(n)
A) altruistic price.
B) hedonic price.
C) fair market value.
D) margin price.
Q:
While firms often alter the ________ of their products or services in order to implement a product-differentiation strategy, the existence of product differentiation, in the end, is always a matter of ________.
A) customer perceptions; objective properties
B) objective properties; price
C) customer perceptions; price
D) objective properties; customer perception
Q:
(p. 112) A valuable result of task environment analysis with respect to geographic, demographic, psychographic and buyer-behavior factors is called:
A. Market share analysis
B. Customer profile
C. Competitive edge
D. Consumer/surveys
Q:
(p. 111) Included in a competitor profile is:
A. Psychographic
B. Supplier relations
C. Experience
D. Demographic
Q:
By increasing the perceived value of a firm's products or services, a firm will be able to
A) charge a lower price than it would otherwise be able to do.
B) charge a higher price than it would otherwise be able to do.
C) sell its products at lower prices than firms pursuing a cost-leadership strategy.
D) gain significantly more market share than firms pursuing a cost-leadership strategy.
Q:
(p. 111) A firm can more accurately forecast both its long-term and short-term growth and profit potential by developing its:
A. Competitor profile
B. Financial position
C. Technological innovation
D. Vendor profile
Q:
________ is a business strategy whereby firms attempt to gain a competitive advantage by increasing the perceived value of their products or services relative to the perceived value of other firms' products or services.
A) Product differentiation
B) Related diversification
C) Cost leadership
D) Best-cost provider
Q:
(p. 111) In considering the competition's profile, a firm would NOT be concerned with which of the following?
A. Market share and breadth of product line
B. Facility location and production capacity
C. Financial position and caliber of personnel
D. Salary of the chief executive and board of directors
Q:
Product differentiation can lead to high market share and low costs.
Q:
Firms able to successfully differentiate their products and services are likely to see a decrease in their volume of sales.
Q:
(p. 111) The operating environment:
A. Also called the remote environment
B. Also called the social environment
C. Affects the firm's success in resource acquisition
D. Does not include competitive position
Q:
(p. 111) The environment that is typically subject to much influence by the firm is:
A. External
B. Ecological
C. Remote
D. Operating
Q:
McDonald's is an excellent example of a firm that simultaneously employs both a product-differentiation and a cost-leadership strategy since their product differentiation based on cleanliness, consistency and fun in its fast food outlets allowed the company to become the market share leader in the industry and to reduce its costs.