SEVI Test #2 Questions With Complete
Solutions| Updated
What is meant by business-level strategy? What key questions should a business
strategy answer?
Integrated and coordinated set of commitments and actions the firm uses to gain
a competitive advantage by exploiting core competencies in specific product
markets
How do businesses establish and maintain competitive advantage?
- Focus on customers' evolving wants and needs
- Maintain their strategic position
- Have a business-level strategy
Cost Leadership
-Creating a low-cost position relative to competitors
-Managing the value chain to lower costs
-Focus on producing goods or services with features that are acceptable to
customers at the lowest cost, relative to that of competitors
-Overall low-cost position
,Differentiation
-Products and/or services that are unique and valued
-Emphasis on non-price attributes for which customers will pay a premium
Focus
-Narrow product lines, buyer segments, or targeted geographics
-Advantage through cost leadership or differentiation
Cost Leadership Risks
-Too much focus on one or a few value chain activities
Increase in the cost of the inputs on which the advantage is based
-Strategy can be too easily imitated
Differentiation Risks
-Uniqueness is not valued by customers
-Too much differentiation
-Too high a price premium
, Focus Risks
-Erosion of cost advantages within narrow segments
-Highly focused products and services are still subject to competition from new
entrants and imitation
-Focusers become too focused on satisfying buyer needs
Cost Leadership Protection in Industry
-Protects a firm from rivalry
-Provides more flexibility to cope with demands from powerful suppliers who
want to increase input costs
-Provides substantial entry barriers due to economies of scale and cost advantages
-Puts the firm in a favorable position with substitute products
DIfferentiation Protection in Industry
-Higher barriers due to customer loyalty
-Provides high argos tha enable the firm to deal with supplier power
-Establishing customer loyalty and hence less threat from substitutes
Focus Protection in Industry
-Creates higher entry barriers due to either cost leadership or differentiation
Solutions| Updated
What is meant by business-level strategy? What key questions should a business
strategy answer?
Integrated and coordinated set of commitments and actions the firm uses to gain
a competitive advantage by exploiting core competencies in specific product
markets
How do businesses establish and maintain competitive advantage?
- Focus on customers' evolving wants and needs
- Maintain their strategic position
- Have a business-level strategy
Cost Leadership
-Creating a low-cost position relative to competitors
-Managing the value chain to lower costs
-Focus on producing goods or services with features that are acceptable to
customers at the lowest cost, relative to that of competitors
-Overall low-cost position
,Differentiation
-Products and/or services that are unique and valued
-Emphasis on non-price attributes for which customers will pay a premium
Focus
-Narrow product lines, buyer segments, or targeted geographics
-Advantage through cost leadership or differentiation
Cost Leadership Risks
-Too much focus on one or a few value chain activities
Increase in the cost of the inputs on which the advantage is based
-Strategy can be too easily imitated
Differentiation Risks
-Uniqueness is not valued by customers
-Too much differentiation
-Too high a price premium
, Focus Risks
-Erosion of cost advantages within narrow segments
-Highly focused products and services are still subject to competition from new
entrants and imitation
-Focusers become too focused on satisfying buyer needs
Cost Leadership Protection in Industry
-Protects a firm from rivalry
-Provides more flexibility to cope with demands from powerful suppliers who
want to increase input costs
-Provides substantial entry barriers due to economies of scale and cost advantages
-Puts the firm in a favorable position with substitute products
DIfferentiation Protection in Industry
-Higher barriers due to customer loyalty
-Provides high argos tha enable the firm to deal with supplier power
-Establishing customer loyalty and hence less threat from substitutes
Focus Protection in Industry
-Creates higher entry barriers due to either cost leadership or differentiation
