SEVI 3013 EXAM #2 COOPER WITH QUESTIONSAND CORRECT ANSWERS
1. Business-
Requires a choice - how to overcome the five forces and achieve competitive
Level
advantage?
Strategy
Cost Leadership
2. Generic Busi-
ness-Level Strate- Ditterentiation
gies Focus
3. Cost Creating a low-cost position relative to a firm's peers.
Leadership Managing relationships throughout the entire value chain to lower
Strategy costs.
4. Differentiati Products and/or services that are unique and valued.
on Strategy Emphasis on non price attributes for which customers will gladly pay a
premium.
5. Focus Strategy Narrow product lines, buyer segments, or targeted geographic
markets.
Advantages obtained either through ditterentiation or cost leadership.
6. Cost Protects a firm against rivalry from
Leadership competitors. Protects the firm against
Strategy powerful buyers.
Activi- ties Provides more flexibility to cope with demands from powerful suppliers
who want to increase input costs.
Provides substantial entry barriers due to economies of scale and cost
advan- tages.
Puts the firm in a favorable position with respect to substitute products.
7. Cost Too much focus on one or a few value chain activities.
Leadership Increase in the cost of the inputs on which the advantage is
Strategy based. Strategy can be too easily imitated.
Pitfalls A lack of parity in
, SEVI 3013 EXAM #2 COOPER WITH QUESTIONSAND CORRECT ANSWERS
d terentiation. Reduced
i flexibility.
t Obsolescence of the basis of a cost advantage.
8. Creates higher entry barriers due to customer loyalty.
Provides higher margins that enable the firm to deal with supplier power.
, SEVI 3013 EXAM #2 COOPER WITH QUESTIONSAND CORRECT ANSWERS
Differentiati Reduces buyer power because buyers lack suitable alternatives.
on Strategy Establishes customer loyalty and hence less threat from
Activities substitutes.
9. Differentiatio
n Strategy Uniqueness that is not
Pitfalls valuable. Too much
ditterentiation.
Too high a price premium.
Ditterentiation that is easily
imitated.
Dilution of brand identification through product line
10. Focus
extensions. Perceptions of ditterentiation may vary between
Strategy
buyers and sellers.
Activities
Creates higher entry barriers due to cost leadership or ditterentiation or
both. Can provide higher margins that enable the firm to deal with
supplier power. Reduces buyer power because the firm provides
11. Focus specialized products or services. Focused niches less vulnerable to
Strategy substitutes.
Pitfalls
Erosion of cost advantages within the narrow segment.
Highly focused products and services are still subject to competition from
new entrants and from imitation.
Focusers too focused to satisfy buyer needs.
12. Experience Curve Refers to how business "learns" to lower costs as it gains
experience with pro- duction processes; the decline in unit costs of
production as cumulative output increases.
13. What are the companies can differentiate themselves?
different
ways that 14. Combination Strategy
1. Business-
Requires a choice - how to overcome the five forces and achieve competitive
Level
advantage?
Strategy
Cost Leadership
2. Generic Busi-
ness-Level Strate- Ditterentiation
gies Focus
3. Cost Creating a low-cost position relative to a firm's peers.
Leadership Managing relationships throughout the entire value chain to lower
Strategy costs.
4. Differentiati Products and/or services that are unique and valued.
on Strategy Emphasis on non price attributes for which customers will gladly pay a
premium.
5. Focus Strategy Narrow product lines, buyer segments, or targeted geographic
markets.
Advantages obtained either through ditterentiation or cost leadership.
6. Cost Protects a firm against rivalry from
Leadership competitors. Protects the firm against
Strategy powerful buyers.
Activi- ties Provides more flexibility to cope with demands from powerful suppliers
who want to increase input costs.
Provides substantial entry barriers due to economies of scale and cost
advan- tages.
Puts the firm in a favorable position with respect to substitute products.
7. Cost Too much focus on one or a few value chain activities.
Leadership Increase in the cost of the inputs on which the advantage is
Strategy based. Strategy can be too easily imitated.
Pitfalls A lack of parity in
, SEVI 3013 EXAM #2 COOPER WITH QUESTIONSAND CORRECT ANSWERS
d terentiation. Reduced
i flexibility.
t Obsolescence of the basis of a cost advantage.
8. Creates higher entry barriers due to customer loyalty.
Provides higher margins that enable the firm to deal with supplier power.
, SEVI 3013 EXAM #2 COOPER WITH QUESTIONSAND CORRECT ANSWERS
Differentiati Reduces buyer power because buyers lack suitable alternatives.
on Strategy Establishes customer loyalty and hence less threat from
Activities substitutes.
9. Differentiatio
n Strategy Uniqueness that is not
Pitfalls valuable. Too much
ditterentiation.
Too high a price premium.
Ditterentiation that is easily
imitated.
Dilution of brand identification through product line
10. Focus
extensions. Perceptions of ditterentiation may vary between
Strategy
buyers and sellers.
Activities
Creates higher entry barriers due to cost leadership or ditterentiation or
both. Can provide higher margins that enable the firm to deal with
supplier power. Reduces buyer power because the firm provides
11. Focus specialized products or services. Focused niches less vulnerable to
Strategy substitutes.
Pitfalls
Erosion of cost advantages within the narrow segment.
Highly focused products and services are still subject to competition from
new entrants and from imitation.
Focusers too focused to satisfy buyer needs.
12. Experience Curve Refers to how business "learns" to lower costs as it gains
experience with pro- duction processes; the decline in unit costs of
production as cumulative output increases.
13. What are the companies can differentiate themselves?
different
ways that 14. Combination Strategy
