MGMT 352, Exam 2 Question and
answers rated A+ 2025/2026
goal-directed actions managers take to achieve competitive advantage in a single product market -
correct answer ✔business level strategy
how does business strategy contribute to competitive advantage - correct answer ✔-cost leadership
- differentiation
- blue ocean
choices between a cost or value position - correct answer ✔strategic trade-off
t/f: there is tension between a cost and value position - correct answer ✔true
what two key dimensions are generic business strategies built on - correct answer ✔- scope of strategy
- sources of competitive advantage
In a generic business strategy, what are the two target markets when referring to the "scope of
strategy"? - correct answer ✔broad market vs narrow/focused market
In a generic business strategy, what are the two sources of competitive advantage? - correct answer
✔differentiation vs cost leadership
explain differentiation - correct answer ✔seeks to create higher value than competitors by offering
products or services with unique features, but charges higher prices
,explain cost leadership - correct answer ✔seeks to create similar value with competitors, but charges
lower prices because products or services are delivered at lower costs
What generic business strategy does a company use when targeting a broad market and a cost
leadership strategy - correct answer ✔cost leadership
What generic business strategy does a company use when targeting a broad market and a
differentiation strategy - correct answer ✔differentiation
What generic business strategy does a company use when targeting a narrow market and a cost
leadership strategy - correct answer ✔focused cost leadership
What generic business strategy does a company use when targeting a narrow market and a
differentiation strategy - correct answer ✔focused differentiation
What are the value drivers of differentiation strategy - correct answer ✔product features
customer service
complements
what makes a product feature a value driver - correct answer ✔- a product wins because it does a
better job, more jobs, or a unique job
- quality/reliability
- convenience
,- brand image
In a differentiation strategy, competitive advantage is achieved as long as what? - correct answer
✔economic value created is greater than competitors (V-C)
In a cost leadership strategy, what are resources focused on - correct answer ✔- reducing cost to
manufacture a product or to offer a service
- reducing prices for customers
- optimizing the value chain to achieve low-cost
In a cost leadership strategy, how is competitive advantage achieved? - correct answer ✔by keeping
costs low while offering acceptable value
What four cost drivers help keep low costs - correct answer ✔- costs of input factors
- economies of scale
- learning-curve effects
- experience-curve effects
How do companies keep costs of inputs low - correct answer ✔- access to cheaper raw materials,
capital labor, land
- buy in large volume
- working cooperatively with suppliers
- source inputs from the lowest-cost location or country
, decreases in per unit costs as output increases - correct answer ✔economies of scale
what is the minimum efficient scale - correct answer ✔output range needed to bring the cost per unit
down
increases in cost as output increases - correct answer ✔diseconomies of scale
What are some causes of diseconomies of scale - correct answer ✔- complexity of coordination
- bureaucracy
- inflexibility in decision making
t/f: learning drives costs up - correct answer ✔false - learning drives costs down (increased
productivity)
what is the complexity of economies of scale - correct answer ✔significant in a relatively simple process
what is the complexity of learning curve effects - correct answer ✔significant in a complex process
what is the timing of economies of scale - correct answer ✔captured at one point in time
what is the timing of learning curve effect - correct answer ✔occur over time as output accumulates
what are experience effects - correct answer ✔capture both learning effects and process innovations
answers rated A+ 2025/2026
goal-directed actions managers take to achieve competitive advantage in a single product market -
correct answer ✔business level strategy
how does business strategy contribute to competitive advantage - correct answer ✔-cost leadership
- differentiation
- blue ocean
choices between a cost or value position - correct answer ✔strategic trade-off
t/f: there is tension between a cost and value position - correct answer ✔true
what two key dimensions are generic business strategies built on - correct answer ✔- scope of strategy
- sources of competitive advantage
In a generic business strategy, what are the two target markets when referring to the "scope of
strategy"? - correct answer ✔broad market vs narrow/focused market
In a generic business strategy, what are the two sources of competitive advantage? - correct answer
✔differentiation vs cost leadership
explain differentiation - correct answer ✔seeks to create higher value than competitors by offering
products or services with unique features, but charges higher prices
,explain cost leadership - correct answer ✔seeks to create similar value with competitors, but charges
lower prices because products or services are delivered at lower costs
What generic business strategy does a company use when targeting a broad market and a cost
leadership strategy - correct answer ✔cost leadership
What generic business strategy does a company use when targeting a broad market and a
differentiation strategy - correct answer ✔differentiation
What generic business strategy does a company use when targeting a narrow market and a cost
leadership strategy - correct answer ✔focused cost leadership
What generic business strategy does a company use when targeting a narrow market and a
differentiation strategy - correct answer ✔focused differentiation
What are the value drivers of differentiation strategy - correct answer ✔product features
customer service
complements
what makes a product feature a value driver - correct answer ✔- a product wins because it does a
better job, more jobs, or a unique job
- quality/reliability
- convenience
,- brand image
In a differentiation strategy, competitive advantage is achieved as long as what? - correct answer
✔economic value created is greater than competitors (V-C)
In a cost leadership strategy, what are resources focused on - correct answer ✔- reducing cost to
manufacture a product or to offer a service
- reducing prices for customers
- optimizing the value chain to achieve low-cost
In a cost leadership strategy, how is competitive advantage achieved? - correct answer ✔by keeping
costs low while offering acceptable value
What four cost drivers help keep low costs - correct answer ✔- costs of input factors
- economies of scale
- learning-curve effects
- experience-curve effects
How do companies keep costs of inputs low - correct answer ✔- access to cheaper raw materials,
capital labor, land
- buy in large volume
- working cooperatively with suppliers
- source inputs from the lowest-cost location or country
, decreases in per unit costs as output increases - correct answer ✔economies of scale
what is the minimum efficient scale - correct answer ✔output range needed to bring the cost per unit
down
increases in cost as output increases - correct answer ✔diseconomies of scale
What are some causes of diseconomies of scale - correct answer ✔- complexity of coordination
- bureaucracy
- inflexibility in decision making
t/f: learning drives costs up - correct answer ✔false - learning drives costs down (increased
productivity)
what is the complexity of economies of scale - correct answer ✔significant in a relatively simple process
what is the complexity of learning curve effects - correct answer ✔significant in a complex process
what is the timing of economies of scale - correct answer ✔captured at one point in time
what is the timing of learning curve effect - correct answer ✔occur over time as output accumulates
what are experience effects - correct answer ✔capture both learning effects and process innovations
