CBAD 478 Exam 2 questions with
verified solutions
Buyers tend to have less power when
Select one:
A. a firm has only one buyer, or a small number of buyers.
B. the supplies they purchase are an insignificant portion of the costs of their final products.
C. the products or services being sold to buyers are standard and not differentiated.
D. they are not earning significant economic profits. - correct answer ✔✔B. the supplies they purchase
are an insignificant portion of the costs of their final products.
Diseconomies of scale exist in an industry when a firm's costs fall as a function of that firm's volume of
production.
Select one: True False - correct answer ✔✔False
Firms producing essentially the same products have essentially the same costs.
Select one: True False - correct answer ✔✔False
Recent research shows that firms can simultaneously implement cost-leadership and product-
differentiation strategies if they learn how to manage the ________ inherent in these two strategies.
Select one:
a. superfluousness
b. contradictions
c. consistencies
d. similarities - correct answer ✔✔b. contradictions
Which of the following is likely to to be a rare source of cost advantage?
Select one:
, a. Differential low-cost access to productive inputs.
b. Diseconomies of scale.
c. Technological hardware which is not proprietary.
d. All of these choices are likely to be rare.
e. Economies of scale. - correct answer ✔✔a. Differential low-cost access to productive inputs.
While traditional wisdom suggests that firms attempting both a low-cost focus and a product
differentiation focus often end up "stuck in the middle," recent research suggests that this need not
always be the case - so long as management learns to manage the inherent contradictions between the
two strategies.
Select one: True False - correct answer ✔✔True
When firms without a resource or capability face a cost disadvantage in obtaining or developing it
compared to firms that already possess it, this resource is described as perfectly imitable. - correct
answer ✔✔False
The U-form organizational structure, where functional areas remain in silos and coordination rests with
the CEO, is generally the best structure for encouraging product differentiation - correct answer ✔✔False
Sources of cost advantage - correct answer ✔✔- Size differences and economies of scale -Differential
low-access to productive inputs
-Experience differences and learning-curve economies
-Policy Choices
The existence of a product differentiation advantage is always a matter of customer perception.
Select one: True False - correct answer ✔✔True
Product differentiation is a business strategy where firms attempt to gain a competitive advantage by
increasing the perceived value of their products or services relative to the perceived value of other firms'
products or services.
Select one: True False - correct answer ✔✔True
verified solutions
Buyers tend to have less power when
Select one:
A. a firm has only one buyer, or a small number of buyers.
B. the supplies they purchase are an insignificant portion of the costs of their final products.
C. the products or services being sold to buyers are standard and not differentiated.
D. they are not earning significant economic profits. - correct answer ✔✔B. the supplies they purchase
are an insignificant portion of the costs of their final products.
Diseconomies of scale exist in an industry when a firm's costs fall as a function of that firm's volume of
production.
Select one: True False - correct answer ✔✔False
Firms producing essentially the same products have essentially the same costs.
Select one: True False - correct answer ✔✔False
Recent research shows that firms can simultaneously implement cost-leadership and product-
differentiation strategies if they learn how to manage the ________ inherent in these two strategies.
Select one:
a. superfluousness
b. contradictions
c. consistencies
d. similarities - correct answer ✔✔b. contradictions
Which of the following is likely to to be a rare source of cost advantage?
Select one:
, a. Differential low-cost access to productive inputs.
b. Diseconomies of scale.
c. Technological hardware which is not proprietary.
d. All of these choices are likely to be rare.
e. Economies of scale. - correct answer ✔✔a. Differential low-cost access to productive inputs.
While traditional wisdom suggests that firms attempting both a low-cost focus and a product
differentiation focus often end up "stuck in the middle," recent research suggests that this need not
always be the case - so long as management learns to manage the inherent contradictions between the
two strategies.
Select one: True False - correct answer ✔✔True
When firms without a resource or capability face a cost disadvantage in obtaining or developing it
compared to firms that already possess it, this resource is described as perfectly imitable. - correct
answer ✔✔False
The U-form organizational structure, where functional areas remain in silos and coordination rests with
the CEO, is generally the best structure for encouraging product differentiation - correct answer ✔✔False
Sources of cost advantage - correct answer ✔✔- Size differences and economies of scale -Differential
low-access to productive inputs
-Experience differences and learning-curve economies
-Policy Choices
The existence of a product differentiation advantage is always a matter of customer perception.
Select one: True False - correct answer ✔✔True
Product differentiation is a business strategy where firms attempt to gain a competitive advantage by
increasing the perceived value of their products or services relative to the perceived value of other firms'
products or services.
Select one: True False - correct answer ✔✔True
