MGMT 352- Chapter 6 Exam Questions
With Complete Answers
business-level strategy - ANSWER details the goal-oriented actions managers take in their
quest for competitive advantage when competing in a single product market
How should we compete?
Managers must ask:
Who, what, why, and how
Strategic position - ANSWER strategic profile based on value creation and cost in a specific
market
Competitive advantage is based on the difference between the perceived value a firm is able
to create for consumers (V) captured by how much consumers are willing to pay for a
product/service, and the total cost (C0 the firm incurs to create that value
The greater the economic value created (V-C) the greater a firm's potential for competitive
advantage
A firm attempts to stake out a valuable and unique position that meets customer needs while
, simultaneously creating as large a gap as possible between the value a firm's product creates
and the cost required to produce it
To achieve a desired strategic position, managers must make strategic trade-offs, which are
choices between a cost or value position
generic business strategies - ANSWER differentiation and cost-leadership
differentiation - ANSWER seeks to create higher value for customers than the value that
competitors create, by delivering products/services with unique features while keeping costs
at the same or similar levels, allowing the firm to charge higher prices to its customers
cost-leadership - ANSWER seeks to create the same or similar value for customers by
delivering products/services at a lower cost than competitors, enabling the firm to offer lower
prices to its customers
focused cost-leadership strategy - ANSWER same as cost-leadership strategy except with a
narrow focus on the niche market
focused differentiation strategy - ANSWER same as differentiation strategy but with a narrow
focus on the niche market
cost parity - ANSWER one firm has the same costs as another
With Complete Answers
business-level strategy - ANSWER details the goal-oriented actions managers take in their
quest for competitive advantage when competing in a single product market
How should we compete?
Managers must ask:
Who, what, why, and how
Strategic position - ANSWER strategic profile based on value creation and cost in a specific
market
Competitive advantage is based on the difference between the perceived value a firm is able
to create for consumers (V) captured by how much consumers are willing to pay for a
product/service, and the total cost (C0 the firm incurs to create that value
The greater the economic value created (V-C) the greater a firm's potential for competitive
advantage
A firm attempts to stake out a valuable and unique position that meets customer needs while
, simultaneously creating as large a gap as possible between the value a firm's product creates
and the cost required to produce it
To achieve a desired strategic position, managers must make strategic trade-offs, which are
choices between a cost or value position
generic business strategies - ANSWER differentiation and cost-leadership
differentiation - ANSWER seeks to create higher value for customers than the value that
competitors create, by delivering products/services with unique features while keeping costs
at the same or similar levels, allowing the firm to charge higher prices to its customers
cost-leadership - ANSWER seeks to create the same or similar value for customers by
delivering products/services at a lower cost than competitors, enabling the firm to offer lower
prices to its customers
focused cost-leadership strategy - ANSWER same as cost-leadership strategy except with a
narrow focus on the niche market
focused differentiation strategy - ANSWER same as differentiation strategy but with a narrow
focus on the niche market
cost parity - ANSWER one firm has the same costs as another
