MGNT 4800 Exam 2 Study Guide
Which of the following statements holds true for companies following the differentiation
strategy? - Answer advertising in general and brand building in particular are very
important to them
A company introduces a new product in the market. The company decides that the only
way it could attract customers is to keep the price of the product lower than what its
competitors offer in the market. Which of the statements would hold true for such a
strategy? - Answer the company emphasizes efficiency
Which of the following is accurate regarding a best-cost strategy? - Answer All of the
above are accurate
A company sells computers only over the internet. Customers can decide their own
computer configuration at the company's website and then place the order for the
computer. This is an example of: - Answer focused differentiation strategy
A(n) _______ means that a firm is competing based on uniqueness rather than price and
is seeking to attract a broad market - Answer differentiation strategy
A(n) ______ is a general way if positioning a firm within an industry. - Answer generic
strategy
Mekcin is a company that regularly launches products with features that are different
from what are offered in the market. It has now launched a new electronic device which
can be fitted to vehicles. It can be programmed to automatically dial the police
emergency number, provide them with all the required location details, and guide them
to the location, in the case of an emergency. It also charges higher for its products than
what other companies charge for their products. What disadvantage would the
company face because of the strategy it follows? - Answer competitors may be able to
imitate the features well enough that they are no longer unique
A bike manufacturing company targets college-going kids. The price of the bikes offered
by this company is lower than what the other companies offer in the market. The fact
that it offers low-priced bikes to college-going kids is an example of a(n): - Answer
focused cost leadership strategy
A firm is said to be _____ if it does not offer features that are unique enough to convince
customers to buy its offerings and its prices are too high to effectively compete on
based on price. - Answer stuck in the middle
A company that manufactures laundry detergent makes use of salespeople for
door-to-door selling to directly sell the products to the customers. The company allows
customers to make payments for the products within a period of one month. This is an
example of a(n): - Answer focused differentiation strategy
, Which of the following constitutes an advantage of the differentiation trategy? - Answer
it creates an ability to obtain premium prices from customers
A company introduced a new helmet for bikers. The company prices the helmets much
lower than others offered in the market. This enables the company to attract a lot of
customers. This is an example of a(N)________ strategy. - Answer cost leadership
A national grocery chain sets up a store in a small town. It sources most of its produce
from the local farmers. Since it sources the products in bulk, it demands discounts from
the suppliers. The store passes some of these savings to the customers in the form of
low prices for the products. The price is lower than what is offered by the local grocery
stores. The large quantities of products sold compensates for the lower price. This is an
example of - Answer economies of scale
A watch manufacturing company has priced its goods at a rate which is higher than
what other companies offer. The watches made by this company do not have any stand
out features to differentiate itself from the other companies or justify its high price. This
company would be considered as a _____ firm - Answer stuck in the middle
A sneaker manufacturing company targets teenagers. It sells the sneakers to these
teenagers at a price which is lower than what is offered in the. market. It also has a
website where customers can design their own shoes. They then can order the shoes
and they will be delivered to them, This is an example of a(n) ______ strategy, - Answer
best-cost
The unique features provided by firms following a focused differentiation strategy are
often very specialized (t/f) - Answer true
One route toward a best-cost strategy is for a company to adopt a business model
whose fixed costs and overhead are very low relative to the costs that competitors are
absorbing (t/f) - Answer true
A differentiation strategy also creates benefits relative to potential new entrants (t/f) -
Answer true
A differentiation strategy helps break barriers to entry that protect the firm and its
industry from new competition (t/f) - Answer false
A relative lack of market research can lead cost leaders to be not as skilled as other
firms at detecting important environmental changes (t/f) - Answer true
A _____ is a cooperative arrangement between two or more organizations that does not
involve the creation of a new entity - Answer strategic alliance
Which of the following responses of firms to disruptive innovations carries with it the
risk of cannibalization of a firm's traditional business? - Answer matching the
competitor's move
A _______ innovation is an innovation that conflicts with, and threatens to replace,
Which of the following statements holds true for companies following the differentiation
strategy? - Answer advertising in general and brand building in particular are very
important to them
A company introduces a new product in the market. The company decides that the only
way it could attract customers is to keep the price of the product lower than what its
competitors offer in the market. Which of the statements would hold true for such a
strategy? - Answer the company emphasizes efficiency
Which of the following is accurate regarding a best-cost strategy? - Answer All of the
above are accurate
A company sells computers only over the internet. Customers can decide their own
computer configuration at the company's website and then place the order for the
computer. This is an example of: - Answer focused differentiation strategy
A(n) _______ means that a firm is competing based on uniqueness rather than price and
is seeking to attract a broad market - Answer differentiation strategy
A(n) ______ is a general way if positioning a firm within an industry. - Answer generic
strategy
Mekcin is a company that regularly launches products with features that are different
from what are offered in the market. It has now launched a new electronic device which
can be fitted to vehicles. It can be programmed to automatically dial the police
emergency number, provide them with all the required location details, and guide them
to the location, in the case of an emergency. It also charges higher for its products than
what other companies charge for their products. What disadvantage would the
company face because of the strategy it follows? - Answer competitors may be able to
imitate the features well enough that they are no longer unique
A bike manufacturing company targets college-going kids. The price of the bikes offered
by this company is lower than what the other companies offer in the market. The fact
that it offers low-priced bikes to college-going kids is an example of a(n): - Answer
focused cost leadership strategy
A firm is said to be _____ if it does not offer features that are unique enough to convince
customers to buy its offerings and its prices are too high to effectively compete on
based on price. - Answer stuck in the middle
A company that manufactures laundry detergent makes use of salespeople for
door-to-door selling to directly sell the products to the customers. The company allows
customers to make payments for the products within a period of one month. This is an
example of a(n): - Answer focused differentiation strategy
, Which of the following constitutes an advantage of the differentiation trategy? - Answer
it creates an ability to obtain premium prices from customers
A company introduced a new helmet for bikers. The company prices the helmets much
lower than others offered in the market. This enables the company to attract a lot of
customers. This is an example of a(N)________ strategy. - Answer cost leadership
A national grocery chain sets up a store in a small town. It sources most of its produce
from the local farmers. Since it sources the products in bulk, it demands discounts from
the suppliers. The store passes some of these savings to the customers in the form of
low prices for the products. The price is lower than what is offered by the local grocery
stores. The large quantities of products sold compensates for the lower price. This is an
example of - Answer economies of scale
A watch manufacturing company has priced its goods at a rate which is higher than
what other companies offer. The watches made by this company do not have any stand
out features to differentiate itself from the other companies or justify its high price. This
company would be considered as a _____ firm - Answer stuck in the middle
A sneaker manufacturing company targets teenagers. It sells the sneakers to these
teenagers at a price which is lower than what is offered in the. market. It also has a
website where customers can design their own shoes. They then can order the shoes
and they will be delivered to them, This is an example of a(n) ______ strategy, - Answer
best-cost
The unique features provided by firms following a focused differentiation strategy are
often very specialized (t/f) - Answer true
One route toward a best-cost strategy is for a company to adopt a business model
whose fixed costs and overhead are very low relative to the costs that competitors are
absorbing (t/f) - Answer true
A differentiation strategy also creates benefits relative to potential new entrants (t/f) -
Answer true
A differentiation strategy helps break barriers to entry that protect the firm and its
industry from new competition (t/f) - Answer false
A relative lack of market research can lead cost leaders to be not as skilled as other
firms at detecting important environmental changes (t/f) - Answer true
A _____ is a cooperative arrangement between two or more organizations that does not
involve the creation of a new entity - Answer strategic alliance
Which of the following responses of firms to disruptive innovations carries with it the
risk of cannibalization of a firm's traditional business? - Answer matching the
competitor's move
A _______ innovation is an innovation that conflicts with, and threatens to replace,
