FSU MAN 4720 EXAM 3 STUDY GUIDE 2026/2027 ACCURATE QUESTIONS WITH VERIFIED CORRECT DETAILED SOLUTIONS || 100% GUARANTEED PASS NEWEST VERSION

Thus, firms use a focus strategy when they utilize their core competencies to serve the needs of a particular industry segment or niche to the exclusion of others. Examples of specific market segments that can be targeted by a focus strategy include: 1. a particular buyer group (e.g., youths or senior citizens), 2. a different segment of a product line (e.g., products for professional painters or the do-it-yourself group), or 3. a different geographic market (e.g., northern or southern Italy by using a foreign subsidiary). Types of focused strategies - Answer ️ 1. Focused cost leadership strategy 2. Focused differentiation strategy •To implement a focus strategy, firms must be able to: -complete various primary and support activities in a competitively superior manner, in order to develop and sustain a competitive advantage and earn above-average returns. 5 Factors That Drive Focused Strategies - Answer ️ - Large firms may overlook small niches. - A firm may lack the resources needed to compete in the broader market - A firm is able to serve a narrow market segment more effectively than can its larger industry-wide competitors - Focusing allows the firm to direct its resources to certain value chain activities to build competitive advantage Competitive Risks of Focus Strategies - Answer ️ -A focusing firm may be "out focused" by its competitors. -A large competitor may set its sights on a firm's niche market. -Customer preferences in a niche market may change to more closely resemble those of the broader market. integrated cost leadership/differentiation strategy - Answer ️ involves engaging in primary value chain activities and support functions that allow a firm to simultaneously pursue low cost and differentiation A firm that successfully uses an integrated cost leadership/differentiation strategy should be in a better position to: 6 -adapt quickly to environmental changes. -learn new skills and technologies more quickly. -effectively leverage its core competencies while competing against its rivals. Commitment to strategic flexibility is necessary for implementation of integrated cost leadership/ differentiation strategy. -Flexible manufacturing systems (FMS) -Information networks (CRM) -Total quality management (TQM) systems Flexible Manufacturing Systems - Answer ️ •Computer-controlled processes used to produce a variety of products in moderate, flexible quantities with a minimum of manual intervention. -Goal is to eliminate the "low-cost-versus-wide product-variety" tradeoff -Allows firms to produce large variety of products at relatively low costs Information Networks - Answer ️ Link companies electronically with their suppliers, distributors, and customers. -Facilitate efforts to satisfy customer expectations in terms of product quality and delivery speed 7 -Improve flow of work among employees in the firm and their counterparts at suppliers and distributors -Customer relationship management (CRM) Total Quality Management - Answer ️ is a managerial process that emphasizes an organization's commitment to the customer and to continuous improvement of all processes through problem-solving approaches based on empowerment of employees •Emphasize total commitment to the customer through continuous improvement using: -data-driven, problem-solving approaches.-empowerment of employee groups and teams. •Benefits -Increased customer satisfaction -Lower input and operating process costs -Reduced time-to-market for innovative products Risks of an Integrated Cost Leadership/ Differentiation Strategy - Answer ️ The potential to earn above-average returns by successfully using the integrated cost 8 leadership/differentiation strategy is appealing. However, it is a risky strategy because firms find it difficult to perform primary value-chain activities and support functions in ways that allow them to produce relatively inexpensive products with levels of differentiation that create value for the target customer. Moreover, to properly use this strategy across time, firms must be able to simultaneously reduce costs incurred to produce products (as required by the cost leadership strategy) while increasing product differentiation (as required by the differentiation strategy). Often involves compromises -Becoming neither the lowest cost nor the most differentiated firm •Becoming "stuck in the middle"-Lacking the strong commitment and expertise that accompanies firms following either a cost leadership or a differentiated strategy competitors - Answer ️ are firms operating in the same market, offering similar products, and targeting similar customers. Competitive Rivalry - Answer ️ the ongoing set of competitive actions and competitive responses that occur among firms as they maneuver for an advantageous market position 9 It is important for those leading organizations to understand competitive rivalry because the reality is that some firms learn how to outperform their competitors, meaning that competitive rivalry influences an individual firm's ability to gain and sustain competitive advantages.Rivalry results from firms initiating their own competitive actions and then responding to actions taken by competitors.8 Competitive Behavior - Answer ️ the set of competitive actions and competitive responses the firm takes to build or defend its competitive advantages and to improve its market position multimarket competition - Answer ️ occurs when firms compete against each other in several product or geographic markets. Increasingly, competitors engage in competitive actions and responses in more than one market which can be observed with Google and Apple and with Google and Amazon, for example. Competitive Dynamics - Answer ️ refer to all competitive behaviors - that is, the total set of actions and responses taken by all firms competing within a market 10 Competitive Rivalry's Effect on Strategy - Answer ️ • Success of a strategy is determined by: -the firm's initial competitive actions. -how well it anticipates competitors' responses to them. -how well the firm anticipates and responds to its competitors' initial actions. • Competitive rivalry: -affects all types of strategies. -has a dominant influence on the firm's business-level strategy or strategies. Model of Competitive Rivalry - Answer ️ 1. Competitive Analysis •Market commonality •Resource similarity 2. Drivers of Competitive Behavior - Awareness: (the extent to which competitors recognize the degree of their mutual interdependence that results from): •market commonality •resource similarity 11 - Motivation: (the firm's incentive to take action or to respond to a competitor's attack) -relates to perceived gains and losses •Ability: (each firm's resources) -the flexibility that these resources provide •Without available resources the firm lacks the ability to: -attack a competitor -respond to the competitor's actions 3. Competitive Rivalry •Likelihood of attack• - First-mover benefits - Organizational size - Quality • Likelihood of response• Type of competitive action •Actor's reputation 12 •Market dependence 4. Outcomes •Market position •Financial performance •Firms are mutually interdependent when: -a firm's competitive actions have noticeable effects on its competitors. -a firm's competitive actions elicit competitive responses from its competitors. -competitors feel each other's actions and responses. •Marketplace