MAN 4720 - Dever/FSU - Exam 2 || 100% Actual Answers.
business level strategy correct answers is an integrated and coordinated set of commitments and
actions the firm uses to gain a competitive advantage by exploiting core competencies in specific
product markets.
- The choices are important because long-term performance is linked to a firm's strategies. Given
the complexity of successfully competing in the global economy, the choices about how the firm
will compete can be difficult.
Effectively Managing Relationships with Customers correct answers The firm's relationships
with its customers are strengthened when it delivers superior value to them
Reach: dimension of relationships with customers is concerned with the firm's access and
connection to customers. In general, firms seek to extend their reach, adding customers in the
process of doing so.
Richness: the second dimension of firms' relationships with customers, is concerned with the
depth and detail of the two-way flow of information between the firm and the customer. - The
potential of the richness dimension to help the firm establish a competitive advantage in its
relationship with customers leads many firms to offer online services in order to better manage
information exchanges with their customers.
Affiliation: the third dimension, is concerned with facilitating useful interactions with customers.
Viewing the world through the customer's eyes and constantly seeking ways to create more value
for the customer have positive effects in terms of affiliation.
Who: Determining the Customers to Serve
What: Determining Which Customer Needs to Satisfy
How: Determining Core Competencies Necessary to Satisfy Customer Needs correct answers
WHO:
Market segmentation - Companies divide customers into groups based on differences in the
customers' needs (needs are discussed further in the next section) to make this decision. Dividing
customers into groups based on their needs is called market segmentation. Market segmentation
is a process used to cluster people with similar needs into individual and identifiable groups.
Basis for customer segmentation:
Consumer Markets
1. Demographic factors (age, income, sex, etc.)
2. Socioeconomic factors (social class, stage in the family life cycle)
3. Geographic factors (cultural, regional, and national differences)
4. Psychological factors (lifestyle, personality traits)
5. Consumption patterns (heavy, moderate, and light users)
6. Perceptual factors (benefit segmentation, perceptual mapping)
Industrial Markets
1. End-use segments (identified by Standard Industrial Classification [SIC] code)
,2. Product segments (based on technological differences or production economics)
3. Geographic segments (defined by boundaries between countries or by regional differences
within them)
4. Common buying factor segments (cut across product market and geographic segments)
5. Customer size segments
WHAT:
After the firm decides who it will serve, it must identify the targeted customer group's needs that
its goods or services can satisfy. In a general sense, needs (what) are related to a product's
benefits and features. Successful firms learn how to deliver to customers what they want, when
they want it.
- Customer needs represent desires in terms of features and performance capabilities.
HOW:
After deciding who the firm will serve and the specific needs of those customers, the firm is
prepared to determine how to use its capabilities and competencies to develop products that can
satisfy the needs of its target customers.
- core compe
The Purpose of a Business-Level Strategy correct answers - The purpose of a business-level
strategy is to create differences between the firm's position and those of its competitors.
- To position itself differently from competitors, a firm must decide whether it intends to:
perform activities differently or to perform different activities.
Thus, the firm's business-level strategy is a deliberate choice about how it will perform the value
chain's primary and support activities to create unique value.
Types of Potential Competitive Advantage correct answers -Achieving lower overall costs than
rivals
Performing activities differently (reducing process costs)
-Possessing the capability to differentiate the firm's product or service and command a premium
price
Performing different (more highly valued) activities.
Competitive Scope correct answers •Broad Scope-The firm competes in many customer
segments.
•Narrow Scope-The firm selects a segment or group of segments in the industry and tailors its
strategy to serving them at the exclusion of others.
With focus strategies, the firm "selects a segment or group of segments in the industry and tailors
its strategy to serving them to the exclusion of others.
cost leadership strategy correct answers an integrated set of actions taken to produce goods or
services with features that are acceptable to customers at the lowest cost, relative to that of
competitors
, Firms using the cost leadership strategy commonly sell standardized goods or services, but with
competitive levels of differentiation, to the industry's most typical customers.
- As primary activities, inbound logistics (e.g., materials handling, warehousing, and inventory
control) and outbound logistics (e.g., collecting, storing, and distributing products to customers)
often account for significant portions of the total cost to produce some goods and services.
Research suggests that having a competitive advantage in logistics creates more value with a cost
leadership strategy than with a differentiation strategy.
Thus, cost leaders seeking competitively valuable ways to reduce costs may want to concentrate
on the primary activities of inbound logistics and outbound logistics. In so doing, many firms
choose to outsource their manufacturing operations to low-cost firms with low-wage employees.
- Outsourcing creates interdependencies between the outsourcing firm and the suppliers. If
dependencies become too great, it gives the supplier more power with which the sup- plier may
increase prices of the goods and services provided.
Cost leaders also carefully examine all support activities to find additional potential cost
reductions. Developing new systems for finding the optimal combination of low cost and
acceptable levels of differentiation in the raw materials required to produce the firm's goods or
services is an example of how the procurement support activity can facilitate successful use of
the cost leadership strategy.
Effective use of the cost leadership strategy allows a firm to earn above-average returns in spite
of the presence of strong competiti
How to maintain a cost advantage correct answers Determine and control Cost Drivers
- Alter production process
- Change in automation
- New distribution channel
- New advertising media
- Direct sales in place of indirect sales
Reconfigure Value Chain if needed
New raw material
-Forward integration
- Backward integration
- Change location relative to suppliers or buyers
Value- Creating Activities for Cost Leadership correct answers - Cost-effective MIS
- Few management layers
- Simplified planning
- Consistent policies
- Effecting training
- Easy-to-use manufacturing technologies
- Investments in technologies
- Finding low cost raw materials
- Monitor suppliers' performances
business level strategy correct answers is an integrated and coordinated set of commitments and
actions the firm uses to gain a competitive advantage by exploiting core competencies in specific
product markets.
- The choices are important because long-term performance is linked to a firm's strategies. Given
the complexity of successfully competing in the global economy, the choices about how the firm
will compete can be difficult.
Effectively Managing Relationships with Customers correct answers The firm's relationships
with its customers are strengthened when it delivers superior value to them
Reach: dimension of relationships with customers is concerned with the firm's access and
connection to customers. In general, firms seek to extend their reach, adding customers in the
process of doing so.
Richness: the second dimension of firms' relationships with customers, is concerned with the
depth and detail of the two-way flow of information between the firm and the customer. - The
potential of the richness dimension to help the firm establish a competitive advantage in its
relationship with customers leads many firms to offer online services in order to better manage
information exchanges with their customers.
Affiliation: the third dimension, is concerned with facilitating useful interactions with customers.
Viewing the world through the customer's eyes and constantly seeking ways to create more value
for the customer have positive effects in terms of affiliation.
Who: Determining the Customers to Serve
What: Determining Which Customer Needs to Satisfy
How: Determining Core Competencies Necessary to Satisfy Customer Needs correct answers
WHO:
Market segmentation - Companies divide customers into groups based on differences in the
customers' needs (needs are discussed further in the next section) to make this decision. Dividing
customers into groups based on their needs is called market segmentation. Market segmentation
is a process used to cluster people with similar needs into individual and identifiable groups.
Basis for customer segmentation:
Consumer Markets
1. Demographic factors (age, income, sex, etc.)
2. Socioeconomic factors (social class, stage in the family life cycle)
3. Geographic factors (cultural, regional, and national differences)
4. Psychological factors (lifestyle, personality traits)
5. Consumption patterns (heavy, moderate, and light users)
6. Perceptual factors (benefit segmentation, perceptual mapping)
Industrial Markets
1. End-use segments (identified by Standard Industrial Classification [SIC] code)
,2. Product segments (based on technological differences or production economics)
3. Geographic segments (defined by boundaries between countries or by regional differences
within them)
4. Common buying factor segments (cut across product market and geographic segments)
5. Customer size segments
WHAT:
After the firm decides who it will serve, it must identify the targeted customer group's needs that
its goods or services can satisfy. In a general sense, needs (what) are related to a product's
benefits and features. Successful firms learn how to deliver to customers what they want, when
they want it.
- Customer needs represent desires in terms of features and performance capabilities.
HOW:
After deciding who the firm will serve and the specific needs of those customers, the firm is
prepared to determine how to use its capabilities and competencies to develop products that can
satisfy the needs of its target customers.
- core compe
The Purpose of a Business-Level Strategy correct answers - The purpose of a business-level
strategy is to create differences between the firm's position and those of its competitors.
- To position itself differently from competitors, a firm must decide whether it intends to:
perform activities differently or to perform different activities.
Thus, the firm's business-level strategy is a deliberate choice about how it will perform the value
chain's primary and support activities to create unique value.
Types of Potential Competitive Advantage correct answers -Achieving lower overall costs than
rivals
Performing activities differently (reducing process costs)
-Possessing the capability to differentiate the firm's product or service and command a premium
price
Performing different (more highly valued) activities.
Competitive Scope correct answers •Broad Scope-The firm competes in many customer
segments.
•Narrow Scope-The firm selects a segment or group of segments in the industry and tailors its
strategy to serving them at the exclusion of others.
With focus strategies, the firm "selects a segment or group of segments in the industry and tailors
its strategy to serving them to the exclusion of others.
cost leadership strategy correct answers an integrated set of actions taken to produce goods or
services with features that are acceptable to customers at the lowest cost, relative to that of
competitors
, Firms using the cost leadership strategy commonly sell standardized goods or services, but with
competitive levels of differentiation, to the industry's most typical customers.
- As primary activities, inbound logistics (e.g., materials handling, warehousing, and inventory
control) and outbound logistics (e.g., collecting, storing, and distributing products to customers)
often account for significant portions of the total cost to produce some goods and services.
Research suggests that having a competitive advantage in logistics creates more value with a cost
leadership strategy than with a differentiation strategy.
Thus, cost leaders seeking competitively valuable ways to reduce costs may want to concentrate
on the primary activities of inbound logistics and outbound logistics. In so doing, many firms
choose to outsource their manufacturing operations to low-cost firms with low-wage employees.
- Outsourcing creates interdependencies between the outsourcing firm and the suppliers. If
dependencies become too great, it gives the supplier more power with which the sup- plier may
increase prices of the goods and services provided.
Cost leaders also carefully examine all support activities to find additional potential cost
reductions. Developing new systems for finding the optimal combination of low cost and
acceptable levels of differentiation in the raw materials required to produce the firm's goods or
services is an example of how the procurement support activity can facilitate successful use of
the cost leadership strategy.
Effective use of the cost leadership strategy allows a firm to earn above-average returns in spite
of the presence of strong competiti
How to maintain a cost advantage correct answers Determine and control Cost Drivers
- Alter production process
- Change in automation
- New distribution channel
- New advertising media
- Direct sales in place of indirect sales
Reconfigure Value Chain if needed
New raw material
-Forward integration
- Backward integration
- Change location relative to suppliers or buyers
Value- Creating Activities for Cost Leadership correct answers - Cost-effective MIS
- Few management layers
- Simplified planning
- Consistent policies
- Effecting training
- Easy-to-use manufacturing technologies
- Investments in technologies
- Finding low cost raw materials
- Monitor suppliers' performances
