SEVI 30103 EXAM 2 STUDY GUIDE | SEVI 30103
SCOTT KUBAN QUESTIONS WITH VERIFIED
ACCURATE ANSWERS
What is business level strategy? - Answers - firm uses to overcome the five forces +
achieve competitive advantage
search for competitive advantage within a single industry, market, or line of business
what key questions should a business strategy answer? - Answers - the plan on how
the company will profitably and sustainably achieve the vision for the company
cost leadership (generic business level strategy) - Answers - low cost
broad target
aggressive construction of efficient-scale facilities
vigorous pursuit of cost reductions
tight cost + overhead control
avoidance of marginal customer accounts
cost minimization in all activities in the value chain
risks:
too much focus on one value-chain activity
increase in cost of inputs where the advantage is based
imitated too easily
lack of parity on differentiation
reduced flexibility
obsolescence of the basis of cost advantage
differentiation (generic business level strategy) - Answers - superior value
broad target
image perceived industry wide as unique + valued
prestige/brand imagine
quality
technology
innovation
features
customer service
dealer network
risks:
uniqueness not valuable
, too much differentiation
too high a price
easily imitated
dilution of brand identification through product-line extensions
varied perceptions of differentiation between buyers + sellers
focus (generic business level strategy) - Answers - superior value
narrow target
exploitation of a particular market niche
narrow focus is not sufficient for above-average performance
cost focus v. differentiation focus
risks:
cost advantages may erode
product + service offerings highly focused are still subject to competition from new
entrants + imitation
focusers can become too focused to satisfy buyer needs
how do the three different strategies help companies deal with adverse industry
conditions? (five forces) - Answers - each of porter's generic strategies has the potential
to allow firms to outperform rivals in their industry
experience curve - Answers - refers to how business "learns" to lower costs as it gains
experience with production processes
with experience, unit costs of production decline as output increases in most industries
how do cost leaders benefit from the experience curve? - Answers - as cumulative
experience doubles, cost and labor hours needed to product a unit of product decline by
10-30%
experience curve v. economies of scale - Answers - EC - long-term cost reductions from
learning + process improvements as production accumulates over time
ES - cost advantages of producing larger quantities at a given time
what are the different ways a company can differentiate themselves? - Answers -
superior features
better quality
convenience
brand/image
integrated cost leadership/differentiation (combination strategy) - Answers -
differentiated attributes
lower prices
unique value in an efficient manner
SCOTT KUBAN QUESTIONS WITH VERIFIED
ACCURATE ANSWERS
What is business level strategy? - Answers - firm uses to overcome the five forces +
achieve competitive advantage
search for competitive advantage within a single industry, market, or line of business
what key questions should a business strategy answer? - Answers - the plan on how
the company will profitably and sustainably achieve the vision for the company
cost leadership (generic business level strategy) - Answers - low cost
broad target
aggressive construction of efficient-scale facilities
vigorous pursuit of cost reductions
tight cost + overhead control
avoidance of marginal customer accounts
cost minimization in all activities in the value chain
risks:
too much focus on one value-chain activity
increase in cost of inputs where the advantage is based
imitated too easily
lack of parity on differentiation
reduced flexibility
obsolescence of the basis of cost advantage
differentiation (generic business level strategy) - Answers - superior value
broad target
image perceived industry wide as unique + valued
prestige/brand imagine
quality
technology
innovation
features
customer service
dealer network
risks:
uniqueness not valuable
, too much differentiation
too high a price
easily imitated
dilution of brand identification through product-line extensions
varied perceptions of differentiation between buyers + sellers
focus (generic business level strategy) - Answers - superior value
narrow target
exploitation of a particular market niche
narrow focus is not sufficient for above-average performance
cost focus v. differentiation focus
risks:
cost advantages may erode
product + service offerings highly focused are still subject to competition from new
entrants + imitation
focusers can become too focused to satisfy buyer needs
how do the three different strategies help companies deal with adverse industry
conditions? (five forces) - Answers - each of porter's generic strategies has the potential
to allow firms to outperform rivals in their industry
experience curve - Answers - refers to how business "learns" to lower costs as it gains
experience with production processes
with experience, unit costs of production decline as output increases in most industries
how do cost leaders benefit from the experience curve? - Answers - as cumulative
experience doubles, cost and labor hours needed to product a unit of product decline by
10-30%
experience curve v. economies of scale - Answers - EC - long-term cost reductions from
learning + process improvements as production accumulates over time
ES - cost advantages of producing larger quantities at a given time
what are the different ways a company can differentiate themselves? - Answers -
superior features
better quality
convenience
brand/image
integrated cost leadership/differentiation (combination strategy) - Answers -
differentiated attributes
lower prices
unique value in an efficient manner
