GBA 490 Exam 2 (Meyer) Questions and Answers Solved Correctly Rated A+
The two biggest factors that distinguish one competitive strategy from another: - Answers 1)whether a
company's market target is broad or narrow
2)whether the company is pursuing a competitive advantage linked to lower costs or differentiation
Low-cost Provider strategy - Answers striving to achieve lower overall costs than rivals on comparable
products that attract a broad spectrum of buyers, usually by underpricing rivals
Broad Differentiation Strategy - Answers seeking to differentiate the company's product offering from
rivals' with attributes that will appeal to a broad spectrum of buyers
Focused low cost Strategy - Answers concentrating on the needs and requirements of a narrow buyer
segment (or market niche) and striving to meet these needs at lower costs than rivals (thereby being
able to serve niche members at a lower price)
focused differentiation strategy - Answers concentrating on a narrow buyer segment (or market niche)
and outcompeting rivals by offering niche members customized attributes that meet their tastes and
requirements better than rivals' products
best cost provider strategy - Answers striving to incorporate upscale product attributes at a lower cost
than rivals.
allows a company to give customers more value for their money
hybrid strategy
Low-cost leadership - Answers achieves this when it becomes the industry's lowest-cost provider rather
than just being one of perhaps several competitors with comparatively low costs
low-cost provider's foremost strategic objective - Answers meaningfully lower costs than rivals, but not
necessarily the absolutely lowest possible cost
two options for translating a low-cost advantage over rivals into profits - Answers 1)use the lower-cost
edge to underprice competitors and attract price-sensitive buyers in great enough numbers to increase
total profits
2)maintain the present price, be content with the present market share, and the lower-cost edge to
earn a higher profit margin on each unit sold, thereby raising the firm's total profits and overall return
on investment.
Two major avenues for achieving a cost advantage - Answers 1)perform value chain activities more cost
effectively than rivals
2)revamp the firm's overall value chain to eliminate or bypass some cost-producing activities
, Cost drivers - Answers a factor that has a strong influence on a company's cost
Cost-cutting approaches that demonstrate an effective use of the cost drivers: - Answers 1)Capturing all
available economies of scale
2)taking full advantage of experience and learning-curve effects
3)operating facilities at full capacity
4)improving supply chain efficiency
5)substituting lower-cost inputs wherever there is little or no sacrifice in product quality or performance
6)using the company's bargaining power vis-a-vis suppliers or others in the value chain system to gain
concessions
7)using online systems and sophisticated software to achieve operating efficiencies
8)improving process design and employing advances production technology
9)being alert to the cost advantages of outsourcing or vertical integration
10)motivating employees through incentives and company culture
Revamping of the value chain system to lower costs - Answers 1)selling direct to consumers and
bypassing the activities and cost of distributors and dealers
2)streamlining operations by eliminating low-value-added or unnecessary work steps and activities
3)reducing materials handling and shipping costs by having suppliers locate their plants or warehouses
close to the company's own facilities
- Answers success in achieving a low-cost edge over rivals comes from out-managing rivals in finding
ways to perform value chain activities faster more accurately, and more cost-effectively
when a low-cost provider strategy works best: - Answers 1)price competition among rival sellers is
vigorous
2)the products of rival sellers are essentially identical and readily available from many eager sellers
3)it is difficult to achieve product differentiation in ways that have value to buyers
4)most buyers use the product in the same ways
5)buyers incur low costs in switching their purchases from one sellers to another
A low cost provider is in the best position to: - Answers win the business of price-sensitive buyers, set
the floor on market price, and still earn a profit
The two biggest factors that distinguish one competitive strategy from another: - Answers 1)whether a
company's market target is broad or narrow
2)whether the company is pursuing a competitive advantage linked to lower costs or differentiation
Low-cost Provider strategy - Answers striving to achieve lower overall costs than rivals on comparable
products that attract a broad spectrum of buyers, usually by underpricing rivals
Broad Differentiation Strategy - Answers seeking to differentiate the company's product offering from
rivals' with attributes that will appeal to a broad spectrum of buyers
Focused low cost Strategy - Answers concentrating on the needs and requirements of a narrow buyer
segment (or market niche) and striving to meet these needs at lower costs than rivals (thereby being
able to serve niche members at a lower price)
focused differentiation strategy - Answers concentrating on a narrow buyer segment (or market niche)
and outcompeting rivals by offering niche members customized attributes that meet their tastes and
requirements better than rivals' products
best cost provider strategy - Answers striving to incorporate upscale product attributes at a lower cost
than rivals.
allows a company to give customers more value for their money
hybrid strategy
Low-cost leadership - Answers achieves this when it becomes the industry's lowest-cost provider rather
than just being one of perhaps several competitors with comparatively low costs
low-cost provider's foremost strategic objective - Answers meaningfully lower costs than rivals, but not
necessarily the absolutely lowest possible cost
two options for translating a low-cost advantage over rivals into profits - Answers 1)use the lower-cost
edge to underprice competitors and attract price-sensitive buyers in great enough numbers to increase
total profits
2)maintain the present price, be content with the present market share, and the lower-cost edge to
earn a higher profit margin on each unit sold, thereby raising the firm's total profits and overall return
on investment.
Two major avenues for achieving a cost advantage - Answers 1)perform value chain activities more cost
effectively than rivals
2)revamp the firm's overall value chain to eliminate or bypass some cost-producing activities
, Cost drivers - Answers a factor that has a strong influence on a company's cost
Cost-cutting approaches that demonstrate an effective use of the cost drivers: - Answers 1)Capturing all
available economies of scale
2)taking full advantage of experience and learning-curve effects
3)operating facilities at full capacity
4)improving supply chain efficiency
5)substituting lower-cost inputs wherever there is little or no sacrifice in product quality or performance
6)using the company's bargaining power vis-a-vis suppliers or others in the value chain system to gain
concessions
7)using online systems and sophisticated software to achieve operating efficiencies
8)improving process design and employing advances production technology
9)being alert to the cost advantages of outsourcing or vertical integration
10)motivating employees through incentives and company culture
Revamping of the value chain system to lower costs - Answers 1)selling direct to consumers and
bypassing the activities and cost of distributors and dealers
2)streamlining operations by eliminating low-value-added or unnecessary work steps and activities
3)reducing materials handling and shipping costs by having suppliers locate their plants or warehouses
close to the company's own facilities
- Answers success in achieving a low-cost edge over rivals comes from out-managing rivals in finding
ways to perform value chain activities faster more accurately, and more cost-effectively
when a low-cost provider strategy works best: - Answers 1)price competition among rival sellers is
vigorous
2)the products of rival sellers are essentially identical and readily available from many eager sellers
3)it is difficult to achieve product differentiation in ways that have value to buyers
4)most buyers use the product in the same ways
5)buyers incur low costs in switching their purchases from one sellers to another
A low cost provider is in the best position to: - Answers win the business of price-sensitive buyers, set
the floor on market price, and still earn a profit
