Chapter 5 BSG Exam Questions with
Complete Solutions5
Company's competitive strategy - ANSWERS-Deals exclusively with the specifics of
management's game plan for competing successfully. (Please customers, strengthen market
position, achieve competitive advantage)
Difference among competitive strategies - ANSWERS-1) Company's target market is broad or
narrow
2) Pursuing a competitive advantage linked to low costs or product differentiation
5 generic competitive strategies - ANSWERS-1) Low-cost provider
2) A broad differentiation strategy
3) Focused low-cost strategy
4) Focused differentiation strategy
5) Best-cost provider
Low-cost provider strategy - ANSWERS-Striving to achieve lower overall costs than rivals &
appealing to a broad spectrum of customers (under pricing rivals)
Broad differentiation strategy - ANSWERS-Seeking to differentiate the company's
products/service offerings from rivals' in ways that it will appeal to a broad spectrum of buyers
Focused low-cost strategy - ANSWERS-Concentrating on a narrow buyer segment and
outcompeting rivals by serving niche members at a lower cost than rivals
, Focused differentiation strategy - ANSWERS-Concentrating on a narrow buyer segment and
outcompeting rivals by offering niche members customized attributes that meet their tastes and
requirements better than the rival products
Best-cost provider strategy - ANSWERS-Giving customers more value for the money by
incorporating good-to-excellent product attributes at a lower cost than rivals
Low-cost provider's - ANSWERS-basis for competitive advantage is lower overall costs than
competitors
Successful low-cost leaders (have lowest industry costs) - ANSWERS-are good at driving costs
out of their business and still provide product/service that buyers find acceptable
To achieve a low cost advantage: - ANSWERS-1) Doing a better job than rivals in performing
value chain activities more cost effectively
2) Revamp the firm's overall value chain to eliminate/bypass some cost-producing activities
Cost driver - ANSWERS-is a factor that has a strong influence on a company's cost
Primary ways to companies can achieve cost advantage by reconfiguring their value chain: -
ANSWERS-1) Selling directly to consumers
2) Streamlining operations by eliminating unnecessary work steps
3) Reducing material handling and shipping cost
Low-cost strategy works best when: - ANSWERS-1) Price competition among rival sellers is
especially vigorous
2) The products of rival sellers are essentially identical
3) It is difficult to achieve product differentiation in ways that have value to buyers
4) Most buyers use the product in the same ways
Complete Solutions5
Company's competitive strategy - ANSWERS-Deals exclusively with the specifics of
management's game plan for competing successfully. (Please customers, strengthen market
position, achieve competitive advantage)
Difference among competitive strategies - ANSWERS-1) Company's target market is broad or
narrow
2) Pursuing a competitive advantage linked to low costs or product differentiation
5 generic competitive strategies - ANSWERS-1) Low-cost provider
2) A broad differentiation strategy
3) Focused low-cost strategy
4) Focused differentiation strategy
5) Best-cost provider
Low-cost provider strategy - ANSWERS-Striving to achieve lower overall costs than rivals &
appealing to a broad spectrum of customers (under pricing rivals)
Broad differentiation strategy - ANSWERS-Seeking to differentiate the company's
products/service offerings from rivals' in ways that it will appeal to a broad spectrum of buyers
Focused low-cost strategy - ANSWERS-Concentrating on a narrow buyer segment and
outcompeting rivals by serving niche members at a lower cost than rivals
, Focused differentiation strategy - ANSWERS-Concentrating on a narrow buyer segment and
outcompeting rivals by offering niche members customized attributes that meet their tastes and
requirements better than the rival products
Best-cost provider strategy - ANSWERS-Giving customers more value for the money by
incorporating good-to-excellent product attributes at a lower cost than rivals
Low-cost provider's - ANSWERS-basis for competitive advantage is lower overall costs than
competitors
Successful low-cost leaders (have lowest industry costs) - ANSWERS-are good at driving costs
out of their business and still provide product/service that buyers find acceptable
To achieve a low cost advantage: - ANSWERS-1) Doing a better job than rivals in performing
value chain activities more cost effectively
2) Revamp the firm's overall value chain to eliminate/bypass some cost-producing activities
Cost driver - ANSWERS-is a factor that has a strong influence on a company's cost
Primary ways to companies can achieve cost advantage by reconfiguring their value chain: -
ANSWERS-1) Selling directly to consumers
2) Streamlining operations by eliminating unnecessary work steps
3) Reducing material handling and shipping cost
Low-cost strategy works best when: - ANSWERS-1) Price competition among rival sellers is
especially vigorous
2) The products of rival sellers are essentially identical
3) It is difficult to achieve product differentiation in ways that have value to buyers
4) Most buyers use the product in the same ways
