MQM 385 Actual Questions and Correct Answers
Q1
(T/F) Applying the five forces model to business-level strategy allows for managers to asses the
benefits and risks of both cost-leadership and differentiation strategies
Answer: True
Q2
(T/F) Differentiation and cost-leadership strategies are only effective in manufacturing
industries
Answer: False
Q3
(T/F) A cost-leader is the firm most likely to survive a price war
Answer: True
Q4
Who are the customer segments we will serve? What customer needs, wishes and desires will
we satisfy? Why do we want to satisfy them? How will we satisfy them?
Answer: Business Level Strategy Questions
Q5
(T/F) When a firm operates at the minimum efficient scale, there is still opportunity for it to
further reduce its cost per unit through economies of scale.
Answer: False
Q6
Value drivers contribute to a firm's competitive advantage only if
Answer: the increase in value creation exceeds the increase in costs.
, Q7
Pete's Bikes enjoys a competitive advantage as a cost-leader because high demand for its
products has allowed it to operate at the minimum efficient scale. Which of the following
scenarios would be most concerning to the managers of Pete's Bikes?
Answer: A major winter storm shuts down Pete's production for several days.
Q8
Which of the following is primarily a value driver?
Answer: complements
Q9
The goal of a strategic position is to create the largest gap possible between the that a firm
creates through its offerings and the required to create these offerings.
Answer: value; cost
Q10
Mohawk is a leader in sustainable and innovative carpeting and floorings, as evidenced by its
signature product, the world's first organic cotton carpet. Its product is unique and has
appealing customer attributes. If Mohawk's raw material costs increased by 12 percent this
year, what would be the likely outcome?
Answer: Mohawk would pass a major portion of this increase along as a price increase
to its customers.
Q11
The fact that both Whole Foods (a high-end grocery store) and Aldi (an inexpensive grocery
store) have a competitive advantage in the grocery store industry is an indication that
Answer: following a different generic business strategy within the same industry can
lead to a competitive advantage for more than one organization.
Q12
When examining all the generic strategies, which of the following below is inherently superior in
every industry?
Answer: There is no single superior business-level strategy.
Q1
(T/F) Applying the five forces model to business-level strategy allows for managers to asses the
benefits and risks of both cost-leadership and differentiation strategies
Answer: True
Q2
(T/F) Differentiation and cost-leadership strategies are only effective in manufacturing
industries
Answer: False
Q3
(T/F) A cost-leader is the firm most likely to survive a price war
Answer: True
Q4
Who are the customer segments we will serve? What customer needs, wishes and desires will
we satisfy? Why do we want to satisfy them? How will we satisfy them?
Answer: Business Level Strategy Questions
Q5
(T/F) When a firm operates at the minimum efficient scale, there is still opportunity for it to
further reduce its cost per unit through economies of scale.
Answer: False
Q6
Value drivers contribute to a firm's competitive advantage only if
Answer: the increase in value creation exceeds the increase in costs.
, Q7
Pete's Bikes enjoys a competitive advantage as a cost-leader because high demand for its
products has allowed it to operate at the minimum efficient scale. Which of the following
scenarios would be most concerning to the managers of Pete's Bikes?
Answer: A major winter storm shuts down Pete's production for several days.
Q8
Which of the following is primarily a value driver?
Answer: complements
Q9
The goal of a strategic position is to create the largest gap possible between the that a firm
creates through its offerings and the required to create these offerings.
Answer: value; cost
Q10
Mohawk is a leader in sustainable and innovative carpeting and floorings, as evidenced by its
signature product, the world's first organic cotton carpet. Its product is unique and has
appealing customer attributes. If Mohawk's raw material costs increased by 12 percent this
year, what would be the likely outcome?
Answer: Mohawk would pass a major portion of this increase along as a price increase
to its customers.
Q11
The fact that both Whole Foods (a high-end grocery store) and Aldi (an inexpensive grocery
store) have a competitive advantage in the grocery store industry is an indication that
Answer: following a different generic business strategy within the same industry can
lead to a competitive advantage for more than one organization.
Q12
When examining all the generic strategies, which of the following below is inherently superior in
every industry?
Answer: There is no single superior business-level strategy.
