MGMT 352, EXAM 2 QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS VERIFIED
goal-directed actions managers take to achieve competitive advantage in a single
product market
business level strategy
how does business strategy contribute to competitive advantage
-cost leadership
- differentiation
- blue ocean
choices between a cost or value position
strategic trade-off
t/f: there is tension between a cost and value position
true
what two key dimensions are generic business strategies built on
- scope of strategy
- sources of competitive advantage
In a generic business strategy, what are the two target markets when referring to
the "scope of strategy"?
broad market vs narrow/focused market
In a generic business strategy, what are the two sources of competitive
advantage?
,differentiation vs cost leadership
explain differentiation
seeks to create higher value than competitors by offering products or services with
unique features, but charges higher prices
explain cost leadership
seeks to create similar value with competitors, but charges lower prices because
products or services are delivered at lower costs
What generic business strategy does a company use when targeting a broad
market and a cost leadership strategy
cost leadership
What generic business strategy does a company use when targeting a broad
market and a differentiation strategy
differentiation
What generic business strategy does a company use when targeting a narrow
market and a cost leadership strategy
focused cost leadership
What generic business strategy does a company use when targeting a narrow
market and a differentiation strategy
focused differentiation
What are the value drivers of differentiation strategy
product features
customer service
,complements
what makes a product feature a value driver
- a product wins because it does a better job, more jobs, or a unique job
- quality/reliability
- convenience
- brand image
In a differentiation strategy, competitive advantage is achieved as long as what?
economic value created is greater than competitors (V-C)
In a cost leadership strategy, what are resources focused on
- reducing cost to manufacture a product or to offer a service
- reducing prices for customers
- optimizing the value chain to achieve low-cost
In a cost leadership strategy, how is competitive advantage achieved?
by keeping costs low while offering acceptable value
What four cost drivers help keep low costs
- costs of input factors
- economies of scale
, - learning-curve effects
- experience-curve effects
How do companies keep costs of inputs low
- access to cheaper raw materials, capital labor, land
- buy in large volume
- working cooperatively with suppliers
- source inputs from the lowest-cost location or country
decreases in per unit costs as output increases
economies of scale
what is the minimum efficient scale
output range needed to bring the cost per unit down
increases in cost as output increases
diseconomies of scale
What are some causes of diseconomies of scale
- complexity of coordination
- bureaucracy
- inflexibility in decision making
t/f: learning drives costs up
false - learning drives costs down (increased productivity)
what is the complexity of economies of scale
COMPLETE SOLUTIONS VERIFIED
goal-directed actions managers take to achieve competitive advantage in a single
product market
business level strategy
how does business strategy contribute to competitive advantage
-cost leadership
- differentiation
- blue ocean
choices between a cost or value position
strategic trade-off
t/f: there is tension between a cost and value position
true
what two key dimensions are generic business strategies built on
- scope of strategy
- sources of competitive advantage
In a generic business strategy, what are the two target markets when referring to
the "scope of strategy"?
broad market vs narrow/focused market
In a generic business strategy, what are the two sources of competitive
advantage?
,differentiation vs cost leadership
explain differentiation
seeks to create higher value than competitors by offering products or services with
unique features, but charges higher prices
explain cost leadership
seeks to create similar value with competitors, but charges lower prices because
products or services are delivered at lower costs
What generic business strategy does a company use when targeting a broad
market and a cost leadership strategy
cost leadership
What generic business strategy does a company use when targeting a broad
market and a differentiation strategy
differentiation
What generic business strategy does a company use when targeting a narrow
market and a cost leadership strategy
focused cost leadership
What generic business strategy does a company use when targeting a narrow
market and a differentiation strategy
focused differentiation
What are the value drivers of differentiation strategy
product features
customer service
,complements
what makes a product feature a value driver
- a product wins because it does a better job, more jobs, or a unique job
- quality/reliability
- convenience
- brand image
In a differentiation strategy, competitive advantage is achieved as long as what?
economic value created is greater than competitors (V-C)
In a cost leadership strategy, what are resources focused on
- reducing cost to manufacture a product or to offer a service
- reducing prices for customers
- optimizing the value chain to achieve low-cost
In a cost leadership strategy, how is competitive advantage achieved?
by keeping costs low while offering acceptable value
What four cost drivers help keep low costs
- costs of input factors
- economies of scale
, - learning-curve effects
- experience-curve effects
How do companies keep costs of inputs low
- access to cheaper raw materials, capital labor, land
- buy in large volume
- working cooperatively with suppliers
- source inputs from the lowest-cost location or country
decreases in per unit costs as output increases
economies of scale
what is the minimum efficient scale
output range needed to bring the cost per unit down
increases in cost as output increases
diseconomies of scale
What are some causes of diseconomies of scale
- complexity of coordination
- bureaucracy
- inflexibility in decision making
t/f: learning drives costs up
false - learning drives costs down (increased productivity)
what is the complexity of economies of scale
