WPC 480 MIDTERM (PART 2), WPC 480 MIDTERM (PART 1) QUESTIONS WELL ANSWERED
CORRECTLY LATEST UPDATE 2026
business level strategy - Answers actions/choices made by a firm to position itself and gain advantage;
choices between a cost or value position
Economic Value Created (V-C) - Answers the difference between the value a consumer attaches to a
good and the cost to provide the good
In Business-Level Strategy, which two things lead to an increase in profit? - Answers 1) Differentiation
allows a firm to increase price
2) Cost Leadership allows a firm to decrease costs
cost leadership strategy - Answers a goal to reduce the firm's costs below its competitors while
offering adequate quality; resources are focused on reducing price for customers, reducing costs, and
optimizing the value chain to achieve low-cost
Four Drivers That Help Keep Costs Low - Answers 1) cost of input factors
2) economies of scale
3) learning-curve effects
4) technology improvement
Buyers Surplus (V-P) - Answers the difference between the value consumers attach to a good and the
price of the good.
Firm Profits (P-C) - Answers The difference between the retail price of the good and the cost of the
good.
differentiation strategy - Answers unique features that increase value of goods and services so that
consumers are willing to pay a higher price; the competitive advantage is achieved when economic
value created is greater than your competitors; additional A&D and innovation are needed in which
an increase in costs will most likely happen
Three Drivers That Can Increase Value - Answers product features, customer service, existence of
great complements
Blue Ocean Strategy - Answers Business-level strategy that successfully combines differentiation and
cost-leadership activities using value innovation to reconcile the inherent trade-offs.
What company is an example of Blue Ocean Strategy? - Answers Trader Joe's
Entrepreneur - Answers Agents who introduce change and undertake economic risk to innovate
Innovation - Answers A novel and useful idea that is successfully implemented and commercialized;
could lead to new industries
Industry Life Cycle - Answers the five different stages - introduction, growth, shakeout, maturity, and
decline - that occur in the evolution of an industry over time
Product innovation peaks during the ________ stage, and process innovation peaks during the
________ stage - Answers 1) Intro & Growth
2) Shakeout & Maturity
Where is the "chasm"? - Answers between early adopters and early majority
To Overcome the Chasm, You Must - Answers - formulate a business strategy based on competition
- meet customer needs in each industry life cycle stage
- bring competencies and capabilities to the table
Introduction stage - Answers Core competency: R&D
Strategic objective: market acceptance
High Prices
Few Competitors
Buyers: Technology enthusiasts
Growth stage - Answers Core competency: R&D/some manufacturing/marketing
Strategic objective: strategic position/get deep pockets
Falling Prices
Many Competitors
Buyers: Early Adopters
Shakeout stage - Answers Core competency: manufacturing
Strategic objective: survive on deep pockets
Moderate Prices
Fewer Competitors
Buyers: Early Majority
CORRECTLY LATEST UPDATE 2026
business level strategy - Answers actions/choices made by a firm to position itself and gain advantage;
choices between a cost or value position
Economic Value Created (V-C) - Answers the difference between the value a consumer attaches to a
good and the cost to provide the good
In Business-Level Strategy, which two things lead to an increase in profit? - Answers 1) Differentiation
allows a firm to increase price
2) Cost Leadership allows a firm to decrease costs
cost leadership strategy - Answers a goal to reduce the firm's costs below its competitors while
offering adequate quality; resources are focused on reducing price for customers, reducing costs, and
optimizing the value chain to achieve low-cost
Four Drivers That Help Keep Costs Low - Answers 1) cost of input factors
2) economies of scale
3) learning-curve effects
4) technology improvement
Buyers Surplus (V-P) - Answers the difference between the value consumers attach to a good and the
price of the good.
Firm Profits (P-C) - Answers The difference between the retail price of the good and the cost of the
good.
differentiation strategy - Answers unique features that increase value of goods and services so that
consumers are willing to pay a higher price; the competitive advantage is achieved when economic
value created is greater than your competitors; additional A&D and innovation are needed in which
an increase in costs will most likely happen
Three Drivers That Can Increase Value - Answers product features, customer service, existence of
great complements
Blue Ocean Strategy - Answers Business-level strategy that successfully combines differentiation and
cost-leadership activities using value innovation to reconcile the inherent trade-offs.
What company is an example of Blue Ocean Strategy? - Answers Trader Joe's
Entrepreneur - Answers Agents who introduce change and undertake economic risk to innovate
Innovation - Answers A novel and useful idea that is successfully implemented and commercialized;
could lead to new industries
Industry Life Cycle - Answers the five different stages - introduction, growth, shakeout, maturity, and
decline - that occur in the evolution of an industry over time
Product innovation peaks during the ________ stage, and process innovation peaks during the
________ stage - Answers 1) Intro & Growth
2) Shakeout & Maturity
Where is the "chasm"? - Answers between early adopters and early majority
To Overcome the Chasm, You Must - Answers - formulate a business strategy based on competition
- meet customer needs in each industry life cycle stage
- bring competencies and capabilities to the table
Introduction stage - Answers Core competency: R&D
Strategic objective: market acceptance
High Prices
Few Competitors
Buyers: Technology enthusiasts
Growth stage - Answers Core competency: R&D/some manufacturing/marketing
Strategic objective: strategic position/get deep pockets
Falling Prices
Many Competitors
Buyers: Early Adopters
Shakeout stage - Answers Core competency: manufacturing
Strategic objective: survive on deep pockets
Moderate Prices
Fewer Competitors
Buyers: Early Majority
