Q&A Hero

Q: According to the value-price-cost framework, deploying a differentiation strategy involves costs that might well exceed those of the average competitor, but with a successful differentiation strategy, that disadvantage is more than made up for by A) a rise in the perceived value of the differentiated good, giving the differentiator a clear competitive advantage over the average rival. B) a rise in the price of the differentiated good, giving the differentiator a clear value advantage over the average rival. C) no change in the price of the differentiated good, giving the differentiator a clear value advantage over the average rival. D) no change in the perceived value of the differentiated good, giving the differentiator a clear competitive advantage over the average rival. E) a drop in the price of the differentiated good, giving the differentiator a clear competitive advantage over the average rival.

Q: A differentiation strategy works best when A) technological change is fast-paced and competition revolves around rapidly evolving product features. B) buyers' needs are homogeneous. C) many rival firms are also pursuing a differentiation approach. D) there are few other ways to make a product unique to buyers. E) firms have ample excess cash to invest in R&D activities.

Q: To attain a differentiation-based competitive advantage, a company would be UNLIKELY to A) deliver value to customers via the company's resources, competencies, and value chain activities that rivals don't have or can't afford to match and are well-matched to the requirements of the strategy. B) utilize research and development to incorporate tangible features that raise product performance and increase customer satisfaction with the product. C) incorporate product attributes and user features that lower the buyer's overall costs of using the company's product. D) appeal to buyers who are sophisticated and shop hard for the best, stand-out differentiating attributes. E) build in product design features that enhance buyer satisfaction in intangible or noneconomic ways.

Q: What are value drivers? A) a set of factors (analogous to cost drivers) that are particularly effective in having a strong differentiation effect B) a firm's hidden success factor for creating over-the-top product features that will command the highest price in the industry C) a technique for easily identifying factors that validate a firm's performance D) a set of factors that verify the unique nature of a firm E) a set of guidelines for identifying the most promising upscale attributes to incorporate into a product

Q: Opportunities to differentiate a company's product offering A) are most reliably found in the R&D portion of the value chain. B) are typically located in the sales and marketing portion of the value chain. C) can exist in activities all along an industry's value chain. D) usually are tied to product quality and customer service. E) are most frequently attached to a company's manufacturing expertise and to its ability to achieve economies of scale in production.

Q: A differentiation-based competitive advantage A) nearly always is attached to the quality and service aspects of a company's product offering. B) usually is the result of highly effective marketing and advertising to enhance the brand, raise awareness, and build consistent customer experience. C) requires developing at least one distinctive competence that buyers consider valuable. D) hinges on a company's success in developing top-of-the-line product features that will command the highest price premium in the industry. E) often hinges on incorporating features that raise the performance of the product or lower the buyer's overall costs of using the company's product, or enhances buyer satisfaction in intangible or noneconomic ways, or delivers value to customers by differentiating on the basis of competencies and capabilities that rivals can't match.

Q: Whether a broad differentiation strategy ends up enhancing a company's profitability depends mainly on whether A) many buyers view the product's differentiating features as having value. B) most buyers have similar needs and use the product in the same ways. C) most buyers accept the customer value proposition as unique and the product can produce sufficient unit sales to cover the costs of achieving the differentiation. D) buyer switching costs are low and customer loyalty to any one brand is low. E) buyers are prone to shop the market for sellers offering the best price.

Q: A healthy fast-casual restaurant that offers only vegetarian and vegan meals insists on portraying organic ingredients in its advertisements, charges a higher price for its meals, and has a rigorous quality control process to insure the cleanliness of its facilities. What strategy is the manufacturer using to deliver superior value to customers? A) incorporating tangible features B) incorporating intangible features C) signaling value by targeting sophisticated buyers D) lowering the buyer's overall cost E) leveraging its power over suppliers

Q: A broad differentiation strategy improves profitability when A) it is focused on product innovation. B) differentiating enhances product performance and quality. C) the differentiating features appeal to sophisticated and prestigious buyers. D) the higher price the product commands exceeds the added costs of achieving the differentiation. E) the differentiator charges a price that is only fractionally higher than the industry's low-cost provider.

Q: A route to take in developing a differentiation advantage includes A) incorporating product attributes and user features that raise the buyer's overall costs, but keep the price minimal. B) incorporating tangible features that add functionality, and increase customer satisfaction with the product specifications, functions, and styling. C) signaling value by targeting sophisticated buyers. D) incorporating intangible features that enhance buyer satisfaction in economic ways. E) emphasizing high quality and performance of products through a standard and simple, no-fuss packaging.

Q: A company that succeeds in differentiating its product offering from those of its rivals is UNLIKELY to A) compete on innovative, quality products. B) command a premium price for its product. C) experience precipitous drops in unit sales. D) lose buyer loyalty to its brand. E) attract mainly price-conscious buyers.

Q: The objective of differentiation is to A) offer customers something rivals can't, at least in terms of the level of satisfaction. B) develop strategies that are different from those of rivals. C) establish objectives that are measurable and meaningful when it comes to sales growth. D) offer customers a sustainable competitive advantage. E) offer a diverse range of comparable products with low switching costs.

Q: Successful broad differentiation allows a firm to A) be the industry's best-cost provider. B) set the industry ceiling on price. C) avoid being dragged into a price war with industry rivals and not be overly concerned about whether entry barriers into the industry are high or low. D) command a premium price for its product, and/or increase unit sales, and/or gain buyer loyalty to its brand. E) take sales and market share away from rivals by undercutting them on price.

Q: Approaches to enhancing differentiation through changes in the value chain do not include A) coordinating with retailers to enhance the buying experience and building a company's image. B) coordinating with suppliers to speed up new product development cycles. C) coordinating with distributors or shippers to lower shipping costs. D) collaborating with suppliers to improve many dimensions affecting product features and quality. E) coordinating with employees to create a greater incentive system to encourage worker productivity.

Q: A company attempting to be successful with a broad differentiation strategy has to A) study buyer needs and behavior carefully to learn what buyers consider important, what they think has value, and what they are willing to pay for. B) incorporate more differentiating features into its product/service than rivals. C) concentrate its differentiating efforts on marketing and advertising (where almost all differentiating features are created). D) over-differentiate so that product quality, features, or service levels exceed the needs of most buyers. E) concentrate on offering advanced features, whether or not they have value to the customers, to create unique products.

Q: The essence of a broad differentiation strategy is to A) appeal to the high-end part of the market and concentrate on providing a top-of-the-line product to consumers. B) incorporate a greater number of differentiating features into its product/service than rivals. C) lower buyer switching costs. D) outspend rivals on advertising and promotion in order to inform and convince buyers of the value of its differentiating attributes. E) offer unique product attributes in ways that are valuable and appealing and that buyers consider the cost worth it.

Q: Companies pursue closer coordination and collaboration with channel suppliers to better address customer needs in order to A) develop human resource management activities that improve the skills, expertise, and knowledge of company personnel. B) achieve low-cost provider status through the value chain system. C) enhance differentiation through the value chain system. D) compensate for inadequate or outdated production capacity. E) improve their scores on the competitive assessment matrix.

Q: A competitive strategy of striving to be the low-cost provider is particularly attractive when A) buyers are not very price-conscious. B) most rivals are trying to be best-cost providers. C) there are many ways to achieve product differentiation that have value to buyers. D) most buyers use the product in much the same ways, with user requirements calling for a standardized product. E) most rivals are pursuing focused low-cost or focused differentiation strategies.

Q: Value drivers of a broad differentiation strategy tend not to include A) creating product features that appeal to a wide range of buyers. B) improving customer service or add extra services. C) seeking out high-quality inputs. D) emphasizing human resource management activities that improve the skills, expertise, and knowledge of company personnel. E) utilizing just-in-time inventories and made-to-order products when customer demand rises and that buyers consider worth the cost.

Q: From the list below, identify the company that is not the lowest-cost provider in its industry. A) Southwest Airlines B) Walmart C) Nucor Steel D) CNN E) Amazon

Q: A potato chip manufacturer purchases a potato farm. Which of the following regarding its strategy is true? A) The manufacturer has effectively used vertical integration to increase its bargaining position and reduce transaction costs. B) The manufacturer has efficiently capitalized on the experience and learning-curve effects within the company. C) The manufacturer has enhanced utilization by allowing depreciation and other fixed costs to be spread over a larger unit volume. D) The manufacturer has sacrificed quality by using a lower-cost input. E) The manufacturer has effectively reduced its operating costs by outsourcing its activities.

Q: A major drawback of using a low-cost provider strategy is A) industry cost leadership. B) capturing volume gains and achieving economies of scale. D) beneficial and sustainable cost reduction. E) development of cost-saving technological breakthrough that cannot be readily adopted by rival firms.

Q: Choose the best example of a women's fashion retailer that uses cost drivers effectively to manage its value chain activities. A) Callie's Closet orders large amounts of supplies and keeps them stocked until customer demand rises to prevent falling behind schedule in meeting customer needs. B) Bowdon Designs uses just-in-time inventories and produces made-to-order products as and when customer demand rises. C) Molly's Made-to-Measure collects customer requests first and starts processing them only after reaching a certain number. D) Aubergine routes all its supplies to a warehouse for storage and then transports them to individual factories for processing. E) Tamarind substitutes lower-cost inputs with high-quality, high-cost inputs to gain customer attention and loyalty.

Q: An example of how companies can revamp their value chain to reduce costs is to A) have suppliers locate their plants close to companies' own facilities. B) continue to utilize traditional methods of distribution and sales. C) not make any changes in product manufacturing but change end distribution methods. D) increase extra services to increase staffing requirements. E) facilitate the learning curve by providing superior training to new employees.

Q: A major advantage afforded by a low-cost provider strategy is A) overly aggressive price-cutting. B) setting the industry's price ceiling to capture volume gains and achieve economies of scale. D) becoming too fixated on cost reduction. E) having the basis for the firm's cost advantage undermined by cost-saving technological breakthroughs that can be readily adopted by rival firms.

Q: How can a capital-intensive company achieve a cost advantage by revamping its value chain? A) downsizing a direct sales force and utilizing distributors and dealers exclusively B) eliminating sales operations at the company's website C) via higher rates of capacity utilization to allow depreciation and other fixed costs to be spread over a larger unit volume, thereby lowering fixed costs per unit D) centralizing facilities and outsourcing shipping and handling activities E) expanding operations by eliminating low value-added or unnecessary work steps and activities

Q: A strategy to be the industry's overall low-cost provider tends to be more appealing than a differentiation or best-cost or focus/market niche strategy when A) there are many ways to achieve product differentiation that buyers find appealing. B) buyers use the product in a variety of different ways and have high switching costs in changing from one seller's product to another. C) the offerings of rival firms are essentially identical, standardized, commodity-like products. D) entry barriers are high and competition from substitutes is relatively weak. E) the market is composed of many distinct segments with varying buyer needs and expectations.

Q: The culture of a company can be a cost-efficient value chain activity because it can A) allow for safeguarding internalized operating benefits. B) distinguish a company's capacity integration efforts. C) spur worker pride in productivity and continuous improvement. D) foster quality technological enhancements. E) increase a company's bargaining power with suppliers.

Q: A generic strategy to become an industry's overall low-cost provider would not be particularly well-matched to a customer-market characterized by A) offerings of rival firm that are essentially identical and readily available from many eager sellers. B) limited possibilities to achieve differentiation that have value to buyers. C) price competition among rival sellers is especially vigorous. D) widely varying buyers' needs and special requirements, and the prices of substitute products are relatively high. E) a few, large-volume buyers account for the preponderance of industry sales.

Q: A low-cost leadership strategy becomes competitively powerful when A) buyers of the product or service use the product or service in the same ways. B) the offerings of rival firms are essentially unique, different, and customized to end users. C) price competition among rivals is absent. D) buyers prefer that the products/services of competing sellers have widely varying attributes and prices. E) buyers have high switching costs.

Q: Examples of important cost drivers in a company's value chain do not include A) production technology and design. B) customer service. C) learning and experience. D) capacity utilization. E) input costs.

Q: A competitive strategy to be the low-cost provider in an industry works well when A) price competition among rival sellers is especially sluggish. B) there are numerous ways to achieve product differentiation that have no value to buyers. C) buyers incur high costs in switching their purchases from one seller/brand to another. D) industry newcomers use introductory low prices to attract buyers and build a customer base. E) industry newcomers use high introductory prices to let buyers know they have a superior product to build a customer base.

Q: Vanguard, one of the world's largest investment management companies, has attained cost leadership via A) ferreting out cost-saving opportunities in every part of the value chain. B) undertaking an operations functionality redesign. C) establishing sales productivity and operating practices guidelines. D) re-creating rivals' assembly plant structuration savings.

Q: Being the overall low-cost provider in an industry has the attractive advantage of A) building strong customer loyalty and locking customers into its product because customers have high switching costs. B) giving the firm a very appealing brand image. C) putting a firm in the best position to win the business of price-sensitive customers and earn profits by setting the floor on market price. D) putting the company in a strong position to be more profitable than companies pursuing a differentiation strategy. E) greatly reducing the strong bargaining power of rivals with the key distributors.

Q: Actions that a company should take to perform value chain activities more cost-effectively ordinarily will not be concerned with A) striving to capture all available economies of scale and taking advantage of experience and learning-curve effects. B) trying to operate facilities at full capacity. C) adopting labor-saving operating methods. D) improving supply chain efficiency. E) over-differentiating so that product features exceed the needs of most buyers.

Q: A fast-food restaurant stocks bread, meat, sauces, and other main ingredients, but does not assemble and cook its burgers and sandwiches until a customer places an order. Which cost driver is the restaurant efficiently using to cut costs? A) supply chain efficiencies B) economies of scale C) incentive systems and culture D) bargaining power E) capacity utilization

Q: Achieving a sure-cost advantage over rivals entails A) concentrating on the primary activities portion of the value chain and outsourcing all support activities. B) being a first-mover in pursuing backward and forward integration and controlling as much of the industry value chain as possible. C) selling a mostly standard product and increasing the scale of operation. D) minimizing R&D expenses and paying below-average wages and salaries to conserve on labor costs. E) producing a standard product, redesigning the product infrequently, and having minimal advertising.

Q: The major avenues for achieving a cost advantage over rivals include A) performing value chain activities more cost-effectively than rivals or revamping the firm's overall value chain to eliminate or bypass some cost-producing activities. B) having a management team that is highly skilled in cutting costs. C) being a first-mover in adopting the latest state-of-the-art technologies, especially those relating to low-cost manufacture. D) outsourcing high-cost activities to cost-efficient vendors. E) paying lower wages and salaries than rivals.

Q: Domino's Pizza has a well-known slogan: "We'll deliver in 30 minutes or less, or it's free!" Using this slogan, what has the pizza company achieved? A) The company built a unique customer value proposition. B) The company created a new delivery system. C) The company gave a sense of exclusivity to its customers. D) The company coordinated with suppliers to better address customer needs. E) The company emphasized human resource management activities.

Q: In conducting a SWOT analysis, is it enough to simply compile lists of the company's strengths, weaknesses, opportunities, and threats? Why or why not?

Q: Why is it important for company managers to develop a worry list of strategic issues and problems that they need to address and resolve? What should they consider to develop this list?

Q: Why is the simplicity of SWOT analysis also its major limitation? Explain and support your answer.

Q: You have been asked to defend why your strategic analysis of StitchFix solely consists of an assessment of the company's external environment but not an evaluation of its internal resources and competitive position. How would you respond?

Q: Using value chain analysis, which primary and secondary activities would you consider to be most and least valuable for a company like Facebook?

Q: Explain why a weighted competitive strength assessment is important and useful to strategic managers.

Q: What would a deep look at the cost structure of Boll and Branch (Illustration Capsule 4.1), a manufacturer and online marketer of luxury linens, reveal?

Q: If you were advising Hilton Hotels, what three main approaches would you suggest to rectify any weaknesses in this company's customer value proposition?

Q: Identify one competitive resource strength that a SWOT analysis of Blue Apron and Domino's Pizza would reveal.

Q: Describe and provide an example of a firm (real or fictional) that is at a differentiation disadvantage compared to its rivals. What strategic moves should this firm undertake to restore or capture a differentiation advantage?

Q: You have chosen as a course project to review CannaCraft, a Northern California integrated manufacturer and marketer of medical cannabis products. What indicators would you examine to determine whether or not CannaCraft's present strategy is working well?

Q: Describe a company (real or fictional) that is at a cost disadvantage compared to its rivals. What strategic moves should this company undertake to restore cost parity?

Q: You have been hired to evaluate SunPower's ability to compete successfully against its market rivals in the U.S. solar power industry. Briefly list the guiding questions for your strategic assessment of SunPower.

Q: What is meant by the term "best practices"? Why does it matter whether a company utilizes best practices in performing the activities comprising its value chain?

Q: If you were tasked with identifying the strategic issues and problems that merit front-burner managerial attention at SunPower, you would most likely not begin by A) drawing upon the results and conclusions from analyzing SunPower's external environment. B) drawing upon the results and conclusions from evaluating SunPower's own resources and competitive position. C) drawing up a worry list for SunPower consisting of "how to," "whether to," and "what to do about". D) drawing up a list of strategic issues and problems that SunPower faces first. E) drawing up a list of issues and problems that SunPower management need to address to improve the company's position and prospects.

Q: Explain how SunPower used benchmarking to improve its competitive position in the U.S. solar power industry.

Q: Pinpointing the strategic issues that SunPower's management needs to address ordinarily would not include A) analyzing SunPower's external environment. B) evaluating SunPower's own resources and competitive position. C) surveying SunPower's board members, managers, select employees, and key investors regarding what strategic issues they think the company faces. D) developing a worry list of "how to," "whether to," and "what to do about" for SunPower. E) assessing what challenges SunPower must overcome to be financially and competitively successful in the years ahead.

Q: Identifying the strategic issues a company faces and compiling a "worry list" of problems and roadblocks is an important component of company situation analysis because A) without a precise fix on what problems/issues a company confronts, managers cannot know what the industry's key success factors are. B) the worry list sets the management agenda for taking actions to improve the company's performance and business outlook. C) without a precise fix on what problems/roadblocks a company confronts, managers are less clear about what value chain activities to benchmark. D) these issues and obstacles must be cleared before management can focus clearly on what is the best strategy for the company to pursue. E) the worry list helps company managers clarify their thinking about how best to modify the company's value chain.

Q: Conducting a competitive strength assessment does not involve an analysis of A) factors on which a company is competitively strongest and weakest vis--vis key rivals. B) whether a company should correct its weaknesses by adopting best practices and/or revamping the makeup of its value chain. C) which of the rated companies is competitively strongest and what size competitive advantage it enjoys. D) whether a company has a net competitive advantage or a net competitive disadvantage relative to key rivals (with the size of the advantage/disadvantage being indicated by the differences among the companies' competitive strength scores). E) which rival company is competitively weakest and the areas where it is most vulnerable to competitive attack.

Q: A company's competitive strength scores pinpoint its strengths and weaknesses against rivals and A) suggest the company use its strengths to exploit its own competitive liabilities. B) point directly to the kinds of offensive/defensive actions it can use to exploit its competitive strengths and reduce its competitive liabilities. C) point directly to the company to use its weaknesses as offensive moves to challenge rivals' weaknesses. D) suggest receptivity for astute companies to drive their operating practices if the strength scores are very low. E) point directly to accepting the competitive strength scores on face value.

Q: Calculating competitive strength ratings for a company and comparing them against strength ratings for its key competitors helps indicate A) which weaknesses and vulnerabilities of competitors the company might be able to attack successfully. B) which competitors are in profitable strategic groups and which competitors are in unprofitable strategic groups. C) which competitors are employing offensive strategies and which competitors are employing defensive strategies. D) which competitors are likely to make money and which are likely to lose money in the years ahead. E) what the industry's key success factors are.

Q: The value of doing competitive strength assessment is to A) determine how competitively powerful are the company's core competencies B) learn if the company's market opportunities are better than those of its rivals. C) learn whether a company has a distinctive competence. D) learn how the company ranks relative to rivals on each of the important factors that determine market success and ascertain whether the company has a net competitive advantage or disadvantage vis--vis key rivals. E) determine whether a company's resource strengths are sufficient to allow it to earn bigger profits than rivals.

Q: The company with the highest rating on a given measure has an implied competitive edge on that specific measure, with the size of its edge A) providing the company with an overall net competitive score that is reduced by the weighted measure. B) signaling a weak position and competitive disadvantage. C) reflecting the difference between its weighted rating and rivals' weighted ratings. D) reflecting an area of potential improvement in order to achieve a sustainable competitive advantage. E) requiring reevaluation of the weighted measure.

Q: As a manager at the French discount retailer Carrefour, you could derive a competitive advantage from A) building organizational expertise in performing Carrefour's competitively important value chain activities. B) understanding how Carrefour's value chain activities provide opportunity for growth. C) building value-creating activities all along Carrefour's value chain. D) increasing Carrefour's superiority over rivals by executing even unimportant tasks and activities extremely well. E) sustaining Carrefour's current chain of activities to lower costs.

Q: Quantitative measures of a company's competitive strength A) signal which competitor has the most distinctive competencies and which competitor has the fewest. B) provide useful indicators of how a company compares against key rivals, factor by factor and capability by capabilitythus indicating whether the company has a net overall competitive advantage or disadvantage against each rival. C) reveal which competitors are in the best and worst strategic groups. D) show which industry rival has the best overall market opportunities and which competitor has the poorest market opportunities. E) pinpoint which industry rival is subject to the least amount of competitive pressures from the five competitive forces.

Q: Calculating competitive strength ratings for a company and its rivals using the industry's most telling measures of competitive strength or weakness A) is a way of determining which competitor has the highest overall competitive advantage in the marketplace and which competitor is faced with the lowest overall competitive disadvantage. B) is the most reliable indicator of which industry member has the highest overall product quality. C) is a powerful way of revealing which competitors are in the best and worst strategic groups. D) is the most reliable indicator of which industry member has the lowest overall costs and is the low-cost leader. E) pinpoints which industry rivals are most insulated from the industry's driving forces.

Q: When companies engage in value-creating activities, they do so by A) focusing on exploiting a company's best-executed operating strategy. B) concentrating on efficient performance of the company's primary value chain activities. C) concentrating on minimizing the costs associated with the design of a product or service. D) drawing on specific company resources and capabilities that underlie and enable the activity. E) focusing on working with forward-channel allies to develop capabilities to outmatch the capabilities of rivals.

Q: To build a competitive advantage by out-managing rivals in performing value chain activities, a company must A) position itself in the industry's more favorably situated strategic group. B) develop resource strengths that will enable it to pursue the industry's most attractive opportunities. C) develop core competencies and maybe a distinctive competence that rivals don't have or can't quite match and that are instrumental in helping it deliver attractive value to customers. D) outsource all of its value chain activities to world-class vendors and suppliers. E) eliminate its resource weaknesses.

Q: In a weighted competitive strength analysis, each strength measure is assigned a weight based on A) its percentage share of total industry revenues. B) its percentage share of total industry losses. C) its perceived importance in determining a company's competitive success in the marketplace. D) its percentage share of total industry profits. E) what it takes to provide better analytical balance between the companies with high ratings and the companies with low ratings and thus get the sum of the weights to add up to 1.0.

Q: For a company to translate its performance of value chain activities into a competitive advantage, it must A) undertake ongoing and persistent efforts to be cost-efficient and develop differentiation advantages. B) have more core competencies than rivals. C) have at least three distinctive competencies. D) have competencies that allow it to produce the highest-quality product in the industry. E) have more competitive assets than competitive liabilities.

Q: In a weighted competitive strength assessment, the sum of importance weights should add up to A) 100 percent. B) 1.00. C) 10. D) 100. E) 1000.

Q: A company's value-creating activities can offer a competitive advantage in one of these ways. A) contribute to greater efficiency and lower costs and provide a basis for differentiation. B) contribute expense savings and enhance product exclusivity. C) reduce cost disadvantages and market price anomalies. D) contribute customer experience value and conserve operating functionality. E) contribute to competitive assets and discontinue distinctive competencies.

Q: Competitive strength can be determined by assigning measures based on perceived importance because A) it provides a more accurate assessment of the strength of competitive forces. B) it eliminates the bias introduced for those firms having large market shares. C) the different measures of competitive strength are unlikely to be equally important. D) the results provide a more reliable measure of what competitive moves rivals are likely to make next. E) weighting each company's overall competitive strength by the size of its market share produces a more accurate measure of its true competitive strength.

Q: The means to enhance differentiation through activities at the forward end of the value chain system do not include A) engaging in cooperative advertising and promotions. B) creating exclusive arrangements with downstream sellers or other mechanisms that increase their incentives for enhanced-delivery customer value. C) creating and enforcing standards for downstream activities. D) assisting in training channel partners in business practices. E) enhancing cost-reducing activities with defensive functionality designed to create incentives.

Q: Assigning a weight to each measure of competitive strength assessment is generally analytically superior because A) a weighted ranking identifies which competitive advantages are most powerful. B) an unweighted ranking does not discriminate between companies with high and low market shares. C) it singles out which competitor has the most competitively potent core competencies. D) weighting each company's overall competitive strength by its percentage share of total industry profits produces a more accurate measure of its true competitive strength. E) all of the various measures of competitive strength are not equally important.

Q: Remedying a cost disadvantage associated with activities performed by forward channel partners (wholesale distributors and retail dealers) would not involve A) changing to a more economical distribution strategy such as putting more emphasis on cheaper distribution channels (perhaps direct sales via the Internet) or perhaps integrating forward into company-owned retail outlets. B) enhancing differentiation through activities such as cooperative advertising at the forward end of the value chain. C) pressuring distributors/dealers and other forward channel allies to reduce their costs and markups. D) insisting on across-the-board cost cuts in all value chain activitiesthose performed by suppliers, those performed in-house, and those performed by distributors/dealers. E) collaborating with forward channel allies to identify win-win opportunities to reduce costs.

Q: Understanding where a company is competitive requires A) determining whether a company has a cost-effective value chain. B) developing quantitative strength ratings for the company and key rivals on each industry key success factor and each pivotal resource, capability, and value chain activity. C) identifying a company's core competencies and distinctive competencies (if any). D) analyzing whether a company is well positioned to gain market share and be the industry's profit leader. E) developing quantitative measures of a company's chances for future profitability.

Q: Remedying a supplier-related cost disadvantage would not entail A) integrating backward into the business of high-cost suppliers in an effort to reduce the costs of the items being purchased. B) negotiating more favorable prices with suppliers. C) collaborating closely with suppliers to identify mutual cost-saving opportunities. D) switching to lower-priced substitute inputs. E) persuading forward channel allies to implement best practices.

Q: The options for remedying a supplier-related cost disadvantage include A) pressuring suppliers for more favorable prices, switching to lower-priced substitute inputs, and collaborating closely to identify mutual cost-saving opportunities. B) instituting forward vertical integration. C) shifting into the production of substitute products. D) shifting from a low-cost leadership strategy to a differentiation or focus strategy. E) cutting selling prices and trying to win a bigger market share.

Q: A company's strategic options for remedying cost disadvantages in internally performed value chain activities do not include A) revamping its value chain to eliminate or bypass some cost-producing activities (particularly low value-added activities). B) implementing the use of best practices, particularly for high-cost activities. C) investing in productivity-enhancing, cost-saving technological improvements. D) switching to activity-based costing. E) outsourcing the performance of high-cost activities to vendors that can perform them more cheaply.

Q: If you were a consultant to SunPower, one of the largest solar power companies in the United States, you would not recommend this activity to remedy high internal costs relative to its rivals. A) finding ways to detour around activities or items where costs are high B) redesigning the product or some of its components to permit more economical manufacture or assembly C) implementing aggressive strategic resource mapping to permit across-the-board cost reduction D) outsourcing high-cost activities to vendors or contractors who can perform them more economically E) relocating high-cost activities (like manufacturing) to geographic areas (like China or Latin America or Eastern Europe) where they can be performed more cost-effectively