SEVI 30103 Exam 2
1. What is meant by business-level strategy?: How to overcome the five forces and achieve
competitive advantage (i.e. Cost leadership, differentiation, focus)
2. What key questions should a business strategy answer?: How will the firm gain and maintain
a competitive advantage with this strategy?
3. Describe a differentiation strategy.: Unique products or services that cus- tomers will pay
a premium for
4. Describe a cost leadership strategy.: Based on a low-cost position relative to competitors
5. Describe a focus strategy.: A targeted buyer demographic with narrow product lines
6. What key activities do firms pursue to achieve competitive advantage with a differentiation
strategy?: - Cost parity relative to comps
- Integrated points in the value chain
- Differentiation on multiple fronts
7. What key activities do firms pursue to achieve competitive advantage with a cost-leadership
strategy?: - Efficient scale facilities
- Cost reduction through experience
- Cost and overhead control
- Avoidance of marginal customer accounts
- Cost minimization in all value chain activities
8. What key activities do firms pursue to achieve competitive advantage with a focus strategy?:
Tailor a segment towards a specific segment and remain dedi- cated to them
9. What risks are associated with a cost-leadership strategy?: - Too much focus on some value
chain activities
- Input costs increase based on the advantage
- Can be imitated
- Little parity on differentiation
- Reduced flexibility
10.What risks are associated with a focus strategy?: - Erosion of cost advan- tages
- Products are still subject to competition and imitation
- Can be too focused
11.What risks are associated with a differentiation strategy?: - Too much dif- ferentiation
- Too high of price
- Easily imitate-able
- Dilution of brand identification
1/
9
, SEVI 30103 Exam 2
12.How does a cost-leadership strategy help companies deal with adverse industry conditions?: -
Protects against rivalry
- Protects against power of buyers
- Gives flexibility from powerful suppliers
- Provides entry barriers
- Puts firms in a good position against substitutes
13.How does a focus strategy help companies deal with adverse industry conditions?: -
Creates higher entry barriers
- Provides higher margins to deal with powerful suppliers
- Reduction of buyer power through specialized products/services
14.How does a differentiation strategy help companies deal with adverse industry conditions?:
- Creates high entry barriers
- Provides higher margins to deal with powerful suppliers
- Reduces buyer power
- Reduces substitutes and rivalry
15.What is meant by experience curve?: Refers to how business "learns" to lower cost as it gains
experience with production processes
16.How do cost-leaders benefit from the experience curve?: They are able to lower their input
costs through steps of the value chain and net increased profits
17.How does the experience curve differ from economies of scale?: - Economies of scale is the
principle that higher output will result is lower production costs
18.Ways that companies can differentiate themselves?: - Prestige
- Quality
- Tech
- Innovation
- Features
- Customer service
- Dealer network
19.Describe combination strategies.: When a company uses a differentiation strategy while
also being a cost-leader
20.What activities do companies apply to combine cost leadership and differ- entiation?: -
Automated and flexible manufacturing
- Data analytics
- Exploitation of profit pool
- Use of technology
21.What are the risks associated with combination strategies?: - Can get stuck in the middle
2/
9
1. What is meant by business-level strategy?: How to overcome the five forces and achieve
competitive advantage (i.e. Cost leadership, differentiation, focus)
2. What key questions should a business strategy answer?: How will the firm gain and maintain
a competitive advantage with this strategy?
3. Describe a differentiation strategy.: Unique products or services that cus- tomers will pay
a premium for
4. Describe a cost leadership strategy.: Based on a low-cost position relative to competitors
5. Describe a focus strategy.: A targeted buyer demographic with narrow product lines
6. What key activities do firms pursue to achieve competitive advantage with a differentiation
strategy?: - Cost parity relative to comps
- Integrated points in the value chain
- Differentiation on multiple fronts
7. What key activities do firms pursue to achieve competitive advantage with a cost-leadership
strategy?: - Efficient scale facilities
- Cost reduction through experience
- Cost and overhead control
- Avoidance of marginal customer accounts
- Cost minimization in all value chain activities
8. What key activities do firms pursue to achieve competitive advantage with a focus strategy?:
Tailor a segment towards a specific segment and remain dedi- cated to them
9. What risks are associated with a cost-leadership strategy?: - Too much focus on some value
chain activities
- Input costs increase based on the advantage
- Can be imitated
- Little parity on differentiation
- Reduced flexibility
10.What risks are associated with a focus strategy?: - Erosion of cost advan- tages
- Products are still subject to competition and imitation
- Can be too focused
11.What risks are associated with a differentiation strategy?: - Too much dif- ferentiation
- Too high of price
- Easily imitate-able
- Dilution of brand identification
1/
9
, SEVI 30103 Exam 2
12.How does a cost-leadership strategy help companies deal with adverse industry conditions?: -
Protects against rivalry
- Protects against power of buyers
- Gives flexibility from powerful suppliers
- Provides entry barriers
- Puts firms in a good position against substitutes
13.How does a focus strategy help companies deal with adverse industry conditions?: -
Creates higher entry barriers
- Provides higher margins to deal with powerful suppliers
- Reduction of buyer power through specialized products/services
14.How does a differentiation strategy help companies deal with adverse industry conditions?:
- Creates high entry barriers
- Provides higher margins to deal with powerful suppliers
- Reduces buyer power
- Reduces substitutes and rivalry
15.What is meant by experience curve?: Refers to how business "learns" to lower cost as it gains
experience with production processes
16.How do cost-leaders benefit from the experience curve?: They are able to lower their input
costs through steps of the value chain and net increased profits
17.How does the experience curve differ from economies of scale?: - Economies of scale is the
principle that higher output will result is lower production costs
18.Ways that companies can differentiate themselves?: - Prestige
- Quality
- Tech
- Innovation
- Features
- Customer service
- Dealer network
19.Describe combination strategies.: When a company uses a differentiation strategy while
also being a cost-leader
20.What activities do companies apply to combine cost leadership and differ- entiation?: -
Automated and flexible manufacturing
- Data analytics
- Exploitation of profit pool
- Use of technology
21.What are the risks associated with combination strategies?: - Can get stuck in the middle
2/
9
