MGT 405 SDSU EXAM 2 - QUESTIONS
AND ANSWERS GRADED A+ 2025/2026
Porter's Three Generic Strategies - ANS 1. Overall Cost Leadership
2. Differentiation
3. Focus
Overall Cost Leadership - ANS creating a low-cost position relative to a firm's peers.
targets a broad market
Overall Cost Leadership involves.. - ANS -Aggressive construction of efficient scale facilities
(economies of scale)
-Avoidance of marginal customer accounts (only targeting profitable customers)
-cost minimization in value chain
Cons of Overall Cost Leadership - ANS -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
-reduced flexibility
-A lack of parity on differentiation
1 @COPYRIGHT 2026 ALLRIGHTS RESERVED.
, Differentiation Strategy - ANS products/services that are unique and valued, emphasis on
non price attributes for which customers will gladly pay a premium
Differentiation strategy involves... - ANS -A level of cost parity relative to competitors
-Superior material handling operations to minimize damage
-Low defect rates to improve quality
-Accurate and responsive order processing
-Personal relationships with key customers
-Rapid response to customer service requests
Cons of Differentiation - ANS -Uniqueness that is not valuable
-Too much differentiation
-Too high a price premium
-Differentiation that is easily imitated
-Dilution of brand identification through product line extensions
-Perceptions of differentiation may vary between buyers and sellers
Focus Strategy - ANS Narrow product lines, buyer segments, or targeted geographic markets.
Advantages obtained either through differentiation or cost leadership.
A differentiation strategy can take many forms, such as - ANS Prestige or brand image.
Quality.
Technology.
Innovation.
Features.
Customer service.
2 @COPYRIGHT 2026 ALLRIGHTS RESERVED.
AND ANSWERS GRADED A+ 2025/2026
Porter's Three Generic Strategies - ANS 1. Overall Cost Leadership
2. Differentiation
3. Focus
Overall Cost Leadership - ANS creating a low-cost position relative to a firm's peers.
targets a broad market
Overall Cost Leadership involves.. - ANS -Aggressive construction of efficient scale facilities
(economies of scale)
-Avoidance of marginal customer accounts (only targeting profitable customers)
-cost minimization in value chain
Cons of Overall Cost Leadership - ANS -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
-reduced flexibility
-A lack of parity on differentiation
1 @COPYRIGHT 2026 ALLRIGHTS RESERVED.
, Differentiation Strategy - ANS products/services that are unique and valued, emphasis on
non price attributes for which customers will gladly pay a premium
Differentiation strategy involves... - ANS -A level of cost parity relative to competitors
-Superior material handling operations to minimize damage
-Low defect rates to improve quality
-Accurate and responsive order processing
-Personal relationships with key customers
-Rapid response to customer service requests
Cons of Differentiation - ANS -Uniqueness that is not valuable
-Too much differentiation
-Too high a price premium
-Differentiation that is easily imitated
-Dilution of brand identification through product line extensions
-Perceptions of differentiation may vary between buyers and sellers
Focus Strategy - ANS Narrow product lines, buyer segments, or targeted geographic markets.
Advantages obtained either through differentiation or cost leadership.
A differentiation strategy can take many forms, such as - ANS Prestige or brand image.
Quality.
Technology.
Innovation.
Features.
Customer service.
2 @COPYRIGHT 2026 ALLRIGHTS RESERVED.
