BADM 449 Exam 2 – Study Guide, Key Concepts & Practice Questions Review
Corporate Strategy - correct answer ✔✔Where to compete. Determining the scope of business
Business Strategy - correct answer ✔✔How to compete. Winning in the given business
Functional Strategy - correct answer ✔✔How to implement business strategy
What is Business Strategy? - correct answer ✔✔The goal-directed (coherent) actions managers
take in their quest for competitive advantage when competing in a single product market
Four questions that managers must answer - correct answer ✔✔•Who: which customer
segments will we serve?
•What: customer needs, wishes, and desires will we satisfy?
•Why: do we want to satisfy them?
•How: will we satisfy our customers' needs?
Strategic trade-offs - correct answer ✔✔•Choices between a cost or value position
•Higher value creation → higher cost
Cost Leadership Strategy - correct answer ✔✔Seeks to create similar value than competitors
Products or services delivered at lower cost
Cost Drivers - correct answer ✔✔-Costs of input factors
-economies of scale
-Learning curve effect
-experience curve effects
, Learning-curve effects - correct answer ✔✔•Learning (repeated actions) drives down costs
•The steeper the learning curve, the more learning has taken place
Experience-curve effects - correct answer ✔✔•Introduction of new technology or process
innovation
Shift from a 90% learning curve to a 80% learning curve
Differentiation Strategy - correct answer ✔✔-Seeks to maintain similar costs than competitors
-Unique products or services creating higher value
-Typically (not necessarily) charges higher prices
Value drivers - correct answer ✔✔-Product features
-Customer service
-Complements
Blue Ocean Strategy - correct answer ✔✔successfully combines differentiation and cost-
leadership activities using value innovation
Value innovation - lower costs - correct answer ✔✔-Eliminate. Which of the factors that the
industry takes for granted should be eliminated?
-Reduce. Which of the factors should be reduced well below the industry's standard?
Value innovation - increase perceived consumer benefits: - correct answer ✔✔-Raise. Which of
the actors should be raised well above the industry's standard?
-Create. Which factors should be created than the industry has never offered?
Corporate Strategy - correct answer ✔✔Where to compete. Determining the scope of business
Business Strategy - correct answer ✔✔How to compete. Winning in the given business
Functional Strategy - correct answer ✔✔How to implement business strategy
What is Business Strategy? - correct answer ✔✔The goal-directed (coherent) actions managers
take in their quest for competitive advantage when competing in a single product market
Four questions that managers must answer - correct answer ✔✔•Who: which customer
segments will we serve?
•What: customer needs, wishes, and desires will we satisfy?
•Why: do we want to satisfy them?
•How: will we satisfy our customers' needs?
Strategic trade-offs - correct answer ✔✔•Choices between a cost or value position
•Higher value creation → higher cost
Cost Leadership Strategy - correct answer ✔✔Seeks to create similar value than competitors
Products or services delivered at lower cost
Cost Drivers - correct answer ✔✔-Costs of input factors
-economies of scale
-Learning curve effect
-experience curve effects
, Learning-curve effects - correct answer ✔✔•Learning (repeated actions) drives down costs
•The steeper the learning curve, the more learning has taken place
Experience-curve effects - correct answer ✔✔•Introduction of new technology or process
innovation
Shift from a 90% learning curve to a 80% learning curve
Differentiation Strategy - correct answer ✔✔-Seeks to maintain similar costs than competitors
-Unique products or services creating higher value
-Typically (not necessarily) charges higher prices
Value drivers - correct answer ✔✔-Product features
-Customer service
-Complements
Blue Ocean Strategy - correct answer ✔✔successfully combines differentiation and cost-
leadership activities using value innovation
Value innovation - lower costs - correct answer ✔✔-Eliminate. Which of the factors that the
industry takes for granted should be eliminated?
-Reduce. Which of the factors should be reduced well below the industry's standard?
Value innovation - increase perceived consumer benefits: - correct answer ✔✔-Raise. Which of
the actors should be raised well above the industry's standard?
-Create. Which factors should be created than the industry has never offered?
