MGT 4800J QUIZ #2 EXAM QUESTIONS
AND ANSWERS 100% PASS 2026/2027
Why is an examination of generic strategies valuable? - ANS Focusing on generic strategies
allows executives to concentrate on the core elements of firms' business-level strategies
What are the four main generic strategies? - ANS (1) cost leadership,
(2) differentiation,
(3) focused cost leadership, and
(4) focused differentiation
What is a best-cost strategy? - ANS firms are able to offer both low prices and unique
features that customers find desirable
What does it mean to be "stuck in the middle"? - ANS Firms that are not able to offer low
prices or appealing unique features are referred to as "stuck in the middle."
two dimensions that are critical to defining business-level strategy - ANS 1. the source of
competitive advantage (cost or uniqueness) and
2. the scope of operations (broad or narrow).
@2026 ALLRIGHTS RESERVED 1
,limitations of generic strategies - ANS (1) Keeping costs low - limit advertising spending
Business-level strategy addresses the question of how a firm will __________ in a particular
industry - ANS compete
A _____________ ___________ is a general way of positioning a firm within an industry -
ANS generic strategy
2 types of scope of operations - ANS 1. broad target
2. narrow target
2 types of competitive advantage - ANS 1. cost
2. uniqueness
Differentiation is a ________ target and ____________ type of competitive advantage -
ANS broad, unique
Focused differentiation is a ________ target and ____________ type of competitive advantage -
ANS narrow, unique
Cost leadership is a ________ target and ____________ type of competitive advantage -
ANS broad, cost
Focused cost leadership is a ________ target and ____________ type of competitive advantage
- ANS narrow, cost
@2026 ALLRIGHTS RESERVED 2
, •Business-level _________________ examine how firms compete in a given industry. Firms
derive such strategies by executives making decisions about whether their source of
_________________ _______________ is based on ______________ or _____________ and
whether their scope of operations targets a ___________ or _____________ market. -
ANS strategies, competitive advantage, price or differentiation, broad or narrow
Examining business-level strategy in terms of generic strategies has ____________________ -
ANS limitations
Firms that compete based on _____________ and target a _______________ target market are
following a cost leadership strategy - ANS price, broad
Many cost leaders rely on _______________of _______________ to achieve efficiency -
ANS economies of scale
Economies of scale are created when the costs of offering goods and services
__________________ as a firm is able to sell more items. This occurs because expenses are
________________ across a greater number of items (= efficiency) - ANS decreases,
distributed
What are 3 pros of cost leadership - ANS (1) benefits relative to potential entrants -
discourages new and existing firms, because comp doesnt want to compete directly with an
efficient cost leaders' prices
(2) attract large market share
What are 3 cons of cost leadership - ANS (1) need for high sales - brand loyalty - requires
upfront investments in production or capacity
(2) minimizing ad, market research, R&D can be costly in long run (lagging rivals)
@2026 ALLRIGHTS RESERVED 3
AND ANSWERS 100% PASS 2026/2027
Why is an examination of generic strategies valuable? - ANS Focusing on generic strategies
allows executives to concentrate on the core elements of firms' business-level strategies
What are the four main generic strategies? - ANS (1) cost leadership,
(2) differentiation,
(3) focused cost leadership, and
(4) focused differentiation
What is a best-cost strategy? - ANS firms are able to offer both low prices and unique
features that customers find desirable
What does it mean to be "stuck in the middle"? - ANS Firms that are not able to offer low
prices or appealing unique features are referred to as "stuck in the middle."
two dimensions that are critical to defining business-level strategy - ANS 1. the source of
competitive advantage (cost or uniqueness) and
2. the scope of operations (broad or narrow).
@2026 ALLRIGHTS RESERVED 1
,limitations of generic strategies - ANS (1) Keeping costs low - limit advertising spending
Business-level strategy addresses the question of how a firm will __________ in a particular
industry - ANS compete
A _____________ ___________ is a general way of positioning a firm within an industry -
ANS generic strategy
2 types of scope of operations - ANS 1. broad target
2. narrow target
2 types of competitive advantage - ANS 1. cost
2. uniqueness
Differentiation is a ________ target and ____________ type of competitive advantage -
ANS broad, unique
Focused differentiation is a ________ target and ____________ type of competitive advantage -
ANS narrow, unique
Cost leadership is a ________ target and ____________ type of competitive advantage -
ANS broad, cost
Focused cost leadership is a ________ target and ____________ type of competitive advantage
- ANS narrow, cost
@2026 ALLRIGHTS RESERVED 2
, •Business-level _________________ examine how firms compete in a given industry. Firms
derive such strategies by executives making decisions about whether their source of
_________________ _______________ is based on ______________ or _____________ and
whether their scope of operations targets a ___________ or _____________ market. -
ANS strategies, competitive advantage, price or differentiation, broad or narrow
Examining business-level strategy in terms of generic strategies has ____________________ -
ANS limitations
Firms that compete based on _____________ and target a _______________ target market are
following a cost leadership strategy - ANS price, broad
Many cost leaders rely on _______________of _______________ to achieve efficiency -
ANS economies of scale
Economies of scale are created when the costs of offering goods and services
__________________ as a firm is able to sell more items. This occurs because expenses are
________________ across a greater number of items (= efficiency) - ANS decreases,
distributed
What are 3 pros of cost leadership - ANS (1) benefits relative to potential entrants -
discourages new and existing firms, because comp doesnt want to compete directly with an
efficient cost leaders' prices
(2) attract large market share
What are 3 cons of cost leadership - ANS (1) need for high sales - brand loyalty - requires
upfront investments in production or capacity
(2) minimizing ad, market research, R&D can be costly in long run (lagging rivals)
@2026 ALLRIGHTS RESERVED 3
