BA 405 -Chapter 5-Exam #2 – Nicasio
Questions and Actual Detailed
Answers 2026 Update.
Chapter 5 - Answer Business Level Strategy
business-level strategy - Answer a strategy designed for a firm or division of a firm that
competes within a single business
generic strategies - Answer basic types of business level strategies based on breadth of
target market, and type of competitive advantage
overall cost leadership - Answer a firm's generic strategy based on appeal to the industry-
wide market using a competitive advantage based on low cost
experience curve - Answer the decline in unit costs of production as cumulative output
increases. a way of looking at efficiency gains that come with experience. (created by Boston
Consulting Group in 1968. )
competitive parity - Answer a firms achievement of similarity, or being "on par" with
competitors with respect to low cost, differentiation, or other strategic product characteristics.
competitive parity (overall cost leadership) - Answer on the basis of differentiation, this
factor of overall cost leadership permits a cost leader to translate cost advantages directly into
higher profits than competitors, thus earning above-average returns
A firm that strives for a low-cost advantage must attain an _______ ____ advantage relative to
its rivals (often achieved by offering a no-frills product to a _____ target market using
standardization to derive the greatest benefits from economies of scale and benefits.) - Answer
absolute cost, broad
differentiation strategy - Answer a firm's generic strategy based on creating differences in
the firm's product or service offering by creating something that is perceived industry-wide as
unique and valued by customers
focus strategy - Answer a firm's generic strategy based on appeal to a narrow market
segment within an industry
, cost focus strategy - Answer a firm strives to create a cost advantage in its target market
segment
differentiation focus strategy - Answer a firm seeking to differentiate in its target market
_____ requires that a firm either have a low -cost position with its strategic target, high
differentiation, or both - Answer focus
_____ is used to select niches that are least vulnerable to substitutes or where competitors are
weakest - Answer focus
combination strategies - Answer firms' integration of various (generic) strategies to provide
multiple types of value to customers
high quality, brand identification, and reputation are all examples of ______ _______ when
talking about combination strategies - Answer differentiated attributes
in a combination strategy of overall low cost and differentiation, the firm is able to provide
value, namely _______ ______ to its customers since it has ______ _______ in value-creating
activities - Answer lower prices, lower cost
mass customization - Answer a firm's ability to manufacture unique products in small
quantities at a low cost; an aspect of generic differentiation strategy with the rise of the Internet
that that has changed how companies go to market, and has challenged some to the tried-and-
true techniques of differentiation.
profit pool - Answer the total profits in an industry at all points along the industry's value
chain
extended value chain - Answer the use of information technology to link a firm's value chain
with the value chains of their customers and suppliers
_________ ____________ are often short-lived due to rapid changes in technology,
globalization, and actions by rivals from within & outside the industry - Answer competitive
advantages
digital technologies - Answer information that is in numerical form, which facilitates its
storage, transmission, analysis, and manipulation. Have swept nearly every industry and are
creating new cost efficiency and avenues for differentiation
Questions and Actual Detailed
Answers 2026 Update.
Chapter 5 - Answer Business Level Strategy
business-level strategy - Answer a strategy designed for a firm or division of a firm that
competes within a single business
generic strategies - Answer basic types of business level strategies based on breadth of
target market, and type of competitive advantage
overall cost leadership - Answer a firm's generic strategy based on appeal to the industry-
wide market using a competitive advantage based on low cost
experience curve - Answer the decline in unit costs of production as cumulative output
increases. a way of looking at efficiency gains that come with experience. (created by Boston
Consulting Group in 1968. )
competitive parity - Answer a firms achievement of similarity, or being "on par" with
competitors with respect to low cost, differentiation, or other strategic product characteristics.
competitive parity (overall cost leadership) - Answer on the basis of differentiation, this
factor of overall cost leadership permits a cost leader to translate cost advantages directly into
higher profits than competitors, thus earning above-average returns
A firm that strives for a low-cost advantage must attain an _______ ____ advantage relative to
its rivals (often achieved by offering a no-frills product to a _____ target market using
standardization to derive the greatest benefits from economies of scale and benefits.) - Answer
absolute cost, broad
differentiation strategy - Answer a firm's generic strategy based on creating differences in
the firm's product or service offering by creating something that is perceived industry-wide as
unique and valued by customers
focus strategy - Answer a firm's generic strategy based on appeal to a narrow market
segment within an industry
, cost focus strategy - Answer a firm strives to create a cost advantage in its target market
segment
differentiation focus strategy - Answer a firm seeking to differentiate in its target market
_____ requires that a firm either have a low -cost position with its strategic target, high
differentiation, or both - Answer focus
_____ is used to select niches that are least vulnerable to substitutes or where competitors are
weakest - Answer focus
combination strategies - Answer firms' integration of various (generic) strategies to provide
multiple types of value to customers
high quality, brand identification, and reputation are all examples of ______ _______ when
talking about combination strategies - Answer differentiated attributes
in a combination strategy of overall low cost and differentiation, the firm is able to provide
value, namely _______ ______ to its customers since it has ______ _______ in value-creating
activities - Answer lower prices, lower cost
mass customization - Answer a firm's ability to manufacture unique products in small
quantities at a low cost; an aspect of generic differentiation strategy with the rise of the Internet
that that has changed how companies go to market, and has challenged some to the tried-and-
true techniques of differentiation.
profit pool - Answer the total profits in an industry at all points along the industry's value
chain
extended value chain - Answer the use of information technology to link a firm's value chain
with the value chains of their customers and suppliers
_________ ____________ are often short-lived due to rapid changes in technology,
globalization, and actions by rivals from within & outside the industry - Answer competitive
advantages
digital technologies - Answer information that is in numerical form, which facilitates its
storage, transmission, analysis, and manipulation. Have swept nearly every industry and are
creating new cost efficiency and avenues for differentiation
