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33 Cards in this Set
- Front
- Back
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A hybrid strategy seeks simultaneously to achieve differentiation and focused differentiation. True or false?
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False
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Which of the following strategies is not destined for ultimate failure according to Faulkner and Bowman's strategy clock?
Low price Increased price/standard value Increased price/low value Low value/standard price |
Low price
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Which of the following is not a way to sustain differentiation based advantage?
Entering a price war Creating difficulties of imitation Developing high switching costs Co-specialisation with the buyers organisation |
Entering a price war
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A strategic business unit is a subsidiary of an organisation. True or False?
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False
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Which of the following is NOT one of Porter's generic strategies?
Cost leadership Differentiation Hybrid Focus |
Hybrid
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The experience curve shows that there is generally an increase in unit costs as the total number of units increases over time. True or False?
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False
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Which of the following is not a characteristic of a no frills strategy?
A low price Low perceived product/service benefits Focus on price-sensitive market Benefits that are different from those of competitors and which are widely valued by buyers |
Benefits that are different from those of competitors and which are widely valued by buyers
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Which is the most likely reason why an organisation has a number of strategic business units?
Because it competes in different markets or market segments. Because it has many different suppliers. For historical reasons. To fit the management structure. |
Because it competes in different markets or market segments.
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The likelihood of sustained advantage through experience curve benefits is high. True or False?
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False
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Which three of the following may be the benefits of collaborating rather than competing?
Increased buying power Shared work with customers Decreased risk of substitution Decreased barriers to entry |
Increased selling power
Increased barriers to entry Decreased risk of substitution |
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What term is used for the fact that gains in labour productivity occur as staff learn to do things more cheaply over time?
The learning curve effect First mover advantage Experience curve Staff perception benefits |
The learning curve effect
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The axes on Faulkner and Bowman's strategy clock are:
High/low market focus and high/low price High/low perceived product/service benefits and high/low price High/low price and high/low quality Fast/slow response and high/low quality |
High/low perceived product/service benefits and high/low price
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What does SBU stand for?
Single business unit Strategic business unit Small business unit Services business unit |
Strategic business unit
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A strategic business unit is a part of an organisation for which there is a distinct external market for goods or services that is different from another SBU. True or False?
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True
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Which of the following statements apply to SBUs? Choose all that apply.
They may be organisationally separate. Different competitive strategies may be needed for each SBU. Each SBU typically competes in a different market or market segment. Each SBU must have a separate manager responsible for its performance. |
They may be organisationally separate.
Different competitive strategies may be needed for each SBU. Each SBU typically competes in a different market or market segment. |
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Which three of the following may be the benefits of collaborating rather than competing?
Increased selling power Increased barriers to entry Entry to new markets Increased risk of substitution |
Increased selling power
Increased barriers to entry Entry to new markets |
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Which of the following is NOT a way to sustain price-based advantage?
Selling higher volumes at reduced margins Cross subsidising the low margin business from other parts of the business portfolio Focusing on markets where high product/service value is appreciated by customers Having deep pockets to fund a price war Having organisationally specific capabilities which drive down cost throughout the value chain |
Focusing on markets where high product/service value is appreciated by customers
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Which of the following are not sources of cost leadership?
Economies of scale Experience Supply costs Selling prices Product/process design |
Selling prices
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A competitor appears to be developing a first-mover advantage in one market segment. Which two statements best describe what actions may be suitable?
Respond before the competitor has established a dominant position. Offer another product with enhanced features. Offer an imitation product. Wait until the market response becomes clear. |
Respond before the competitor has established a dominant position.
Offer another product with enhanced features. |
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Which of the following would you NOT associate with a low price strategy?
Copying designs to save R&D costs Employing cheaper resources Producing 'no frills' products and services An industry leading brand Reducing labour costs and increasing labour productivity. |
An industry leading brand
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Which of the following is NOT a good reason for collaborating between potential competitors?
To carve up the market between competitors to maximise prices To increase buying power To increase selling power by offering a complete package of product and service To increase barriers to entry by joint investment in R&D or marketing |
To carve up the market between competitors to maximise prices
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Which of the following is not one of the categories on Faulkner and Bowman's strategy clock?
Differentiation Cost leadership Non-competitive Low-price Hybrid |
Cost leadership
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Which of the following does NOT explain how a differentiation strategy leads to superior performance?
Price competitiveness leads to greater sales volumes. It enables a firm to sell their products at a premium price. Creates a barrier to the entry of new competitors. Earn above average profits by reducing elasticity of demand for the product. |
Price competitiveness leads to greater sales volumes.
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Which of the following is an example of collaboration to increase buying power?
Hospital trusts and government drug-specifying agencies combine to gain buying power. Pharmaceutical companies agree on prices for certain drugs for third world countries. A group of customers collect their drugs jointly from their local pharmacy. Two pharmaceutical companies agree on what prices they will charge for two similar, newly developed drugs. |
Hospital trusts and government drug-specifying agencies combine to gain buying power.
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Collaboration is likely to be advantageous when the combined costs of purchase and buying transactions are lower through collaboration than the cost of operating alone. True or False?
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True
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Which of the following is NOT a strategy for competing in hypercompetitive markets?
Achieving advantage as a first mover Relying on tried and trusted methods of securing competitive advantage Imitating competitors' product/market moves Pre-empting imitation by competing in new ways Constant disruption of the status quo |
Relying on tried and trusted methods of securing competitive advantage
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Which of the following is NOT an example of differentiation based competitive advantages?
Superior product quality Service standards Branding Just In Time (JIT) inventory management Product positioning strategy |
Just In Time (JIT) inventory management
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Which two of the following are examples of collaboration to build barriers to entry or avoid substitution?
Firms in an industry collaborate to invest in research and development. Trade associations promote an industry's generic features to speed up innovation. An industry develops a policy of dealing only with individual buyers. An industry develops a policy of only dealing with accredited suppliers. |
Firms in an industry collaborate to invest in research and development.
Trade associations promote an industry's generic features to speed up innovation. |
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What is meant by a hybrid strategy in the context of the strategy clock?
A strategy that combines positioning and resource based approaches A strategy that combines differentiation and cost control A strategy that combines emergent and intended elements A strategy that combines a broad market with focus characteristics |
A strategy that combines differentiation and cost control
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Which of the following is the main problem that can arise for corporate level management if too many SBUs are identified?
Excessive complexity in developing corporate-level strategy. Excessive requirements for clear, authoritarian leadership. Difficulties in setting clear targets for operational teams. Difficulties in giving equal weight to the needs of each supplier. |
Excessive complexity in developing corporate-level strategy.
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In which ways may customers benefit from economies of scale? Choose all that apply.
All companies in a sector are able to operate more efficiently. Prices may become lower. More product features may be available for the same price. Company profits are increased. |
Prices may become lower.
More product features may be available for the same price. |
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Which of the following is NOT an implication of the experience curve?
Importance of first mover advantage Necessity of continual reduction in costs Need to enhance perceived customer value Possibility of outsourcing |
Need to enhance perceived customer value
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Which two comments accurately explain what the experience curve predicts will happen as an organisation undertakes any activity?
The organisation develops competences in the activity. Staff training needs increase to ensure that suitable experience is available. Costs can be increased. The organisation becomes more efficient at the activity. |
The organisation develops competences in the activity.
The organisation becomes more efficient at the activity. |
