Term
| A company uses ___ strategy when it focuses on pockets of demand that are more slowly declining than the industry as a whole to maintain profitability |
|
Definition
|
|
Term
| Which of the following statements about customer categories in growing industries is true? |
|
Definition
| a typical late majority customer is a behaviorally conservative set of customers |
|
|
Term
A telecommunications firm is working on new product concept of built-in routers in mobile phones. If the new product will be sold to existing customers, the firm is pursuing a strategy of:
a. product development.
b. market penetration.
c. product proliferation.
d. market signaling.
e. market development |
|
Definition
|
|
Term
| In a bid to expand its business and gain cost advantages, Omega Inc. has established several merchandising outlets in different locations. All the outlets share a good network and are interconnected by information technology. The entire network of outlets operates in the industry as one large company. Which of the following strategies has Omega Inc. most likely used ? |
|
Definition
|
|
Term
| The franchisor typically owns and funds each of its franchisees. (T/F) |
|
Definition
|
|
Term
| Early adopters are customers who purchase a new technology or product only when they are convinced that it will be around for a long time. (T/F) |
|
Definition
|
|
Term
| When a company decides to exit an industry by selling off its business assets to another company, it is said to be using a(n) strategy |
|
Definition
|
|
Term
Alpha corporation owns and controls several retail outlets and is thus pursuing a strategy called franchising.
True
False |
|
Definition
|
|
Term
| Who among the following is most likely to fall under the category of laggards in the context of customer groups? |
|
Definition
| Allan is ignorant about the newest uses of technology and buys new products only when they become an absolute necessity. |
|
|
Term
Gadgetbug, an electronic gadgets company, has established itself as one of the industry leaders. The company recently has been facing some amount of competition from certain new entrants. The new entrants offer gadgets in different colors and with interesting artwork embossed. Recognizing that there is a special market for gadgets that are designed uniquely, Gadgetbug has now introduced its own range of uniquely designed gadgets. In this scenario, Gadgetbug's attempt to cater to all the different segments of customers to deter competition demonstrates:
a. price signaling
b. product proliferation
c. harvest strategy
d. limit price strategy
e. diseconomies of scale |
|
Definition
|
|
Term
| Factors leading to the slow growth of demand in embryonic industries include all of the following except the: |
|
Definition
| customer familiarity with products. |
|
|
Term
| John, a technology enthusiast, is often willing to pay premium prices to be one among those who have new versions of software packages. John most likely belongs to the group of customers. |
|
Definition
|
|
Term
| Which of the following is a disadvantage of franchising? |
|
Definition
| It results in the delegation of authority to franchisees and thus, the franchisor may not enjoy complete control. |
|
|
Term
| Which of the following statements is true about technological paradigm shifts? |
|
Definition
| They have the potential to threaten the survival of established industries. |
|
|
Term
| Mathematica 1.0 was one of the most distinctive applications for the short-lived NeXT Computer. It still sets the standard for symbolic math and visualization on Windows, Mac, Linux, and Unix. Mathematica 1.0 can be described as a(n) _________ |
|
Definition
|
|
Term
| When a first mover does not have complementary assets, barriers to imitation are high, and there are several capable competitors, the first mover should: |
|
Definition
| enter into a joint venture to protect the product. |
|
|
Term
| Which of the following is NOT a basic strategy for a first mover? |
|
Definition
| Discourage development of complementary assets |
|
|
Term
| Which of the following is true of first movers? |
|
Definition
| The first mover that creates a revolutionary product is in a monopoly position. |
|
|
Term
| Which of the following statements is true about new entrants in the context of a technological paradigm shift? |
|
Definition
| New entrants do not need to worry about their established customer base. |
|
|
Term
Network effects arise in industries where the size of the"network" of complementary products is a primary determinant of demand for an industry's product.
True
False |
|
Definition
|
|
Term
| In case of emergence of a disruptive technology, established companies should: |
|
Definition
| acquire newly emerging companies that are pioneering potentially disruptive technologies. |
|
|
Term
Antibody Solutions is a company that specializes in cell-bank storage, and producing antibodies for bacterial and viral infections. It is not considered a high-tech company since it is not technically in the computer or software industry, which is typically considered high-tech.
True
False |
|
Definition
|
|
Term
When a company is trying to win a format war, it should license its format for a low fee rather than a high fee
True
False |
|
Definition
|
|
Term
| Technological disruption: |
|
Definition
| compels firms to adopt new business models. |
|
|
Term
The main difference between companies following a cost leadership strategy and those following a focused cost leadership strategy is
a. standardized market price.
b. industry life cycle stage.
c. degree of market segmentation.
d. age of the market.
e. market trajectory. |
|
Definition
| Degree of market segmentation |
|
|
Term
| Which of the following statements about differentiation and cost structure is true? |
|
Definition
| differentiation and cost structure decisions affect one another |
|
|
Term
At The Luxury Hotel in Miami, Florida, three hotel employees serve the needs of each guest. In every room, a guest can summon a chef, a maid, or a valet by pressing a button at bedside. Which generic business-level strategy is The Luxury Hotel utilizing?
a. Cost leadership
b. Differentiation
c. Focus
d. Strategic group
e. Brand loyalty |
|
Definition
|
|
Term
Yankee Candle Company offers customers candles that burn for 50-60 hours, much longer than most department store candle brands. Therefore, customers are willing to pay a higher price for these candles. Yankee Candle Company is utilizing which of the following?
a. Cost leadership
b. Focused cost leadership
c. Market segmentation
d. Product differentiation
e. A strategic group |
|
Definition
|
|
Term
A company pursuing a focus strategy:
a. attempts to serve all market segments.
b. concentrates on building market share in one market segment.
c. typically has more resources at its disposal than a differentiator does.
d. need not be concerned that a differentiator will try to imitate the company's products or services.
e. none of these. |
|
Definition
| B. concentrates on building market share in one market segment |
|
|
Term
An efficiency frontier shows all the different positions that a company can adopt with regard to differentiation and low cost, assuming that its internal functions and organizational arrangements are configured efficiently to support a particular position
True
False |
|
Definition
|
|
Term
| The basic proposition of the red ocean strategy is that many successful companies have built their competitive advantage by |
|
Definition
| initiating a price war in order to grow volume and drive their weaker rivals out of the industry |
|
|
Term
| when a company recognizes that the needs of one market segment is not the same as another and accordingly customizes its product offerings, it is said to be pursuing a _____ strategy |
|
Definition
|
|
Term
which of the following allows a company to lower cost through functional strategy and organization:
a. Adopting rigid manufacturing technologies
b. Focusing marketing efforts on brand building and perceived differentiation from rivals
c. Designing strategies to ensure that employees act in a manner that is consistent with
d. Customizing the product offering and marketing mix to different market segments
e. Implementing just-in-time inventory control systems |
|
Definition
| Implementing just-in-time inventory control systems |
|
|
Term
| A differentiated product is a product that: |
|
Definition
| fills one or more needs better than the products of competitors |
|
|
Term
Which of the following statements is true?
a. Differentiation and cost structure decisions affect one another.
b. Differentiation and cost structure decisions do not affect one another.
c. Differentiation and cost structure decisions have little effect on a company's profitability.
d. Differentiation decisions do not affect a company's profitability.
e. Cost structure decisions do not affect a company's profitability. |
|
Definition
| A. differentiation and cost structure decisions affect one another |
|
|
Term
| The basic proposition of the blue ocean strategy is that many successful companies have built their competitive advantage by |
|
Definition
| redefining their product offering through value innovation and creating a new market space |
|
|
Term
| Strong pressures for convergence due to a shared history and culture, or the establishment of a trading block where there are deliberate attempts to harmonize trade policies, infrastructure, and regulations have contributed to the rise in what trend? |
|
Definition
|
|
Term
| A company, Pluto Inc., employs the franchising strategy to enter a new national market. Which of the following statements is more likely to be true of Pluto? |
|
Definition
| It is more likely to be a service company. |
|
|
Term
| Which entry mode gives a multinational the tightest control over foreign operations? |
|
Definition
| Setting up a wholly owned subsidiary |
|
|
Term
| Aries Travels is a company that offers holiday and travel packages. The company realizes that customer preferences vary and thus extensively customizes its packages. As there are not many competitors in the market in which Aries Travels operates, there are minimal pressures to reduce costs. Aries Travels is most likely to have adopted a _____ strategy. |
|
Definition
|
|
Term
| Which of the following is an advantage of international licensing? |
|
Definition
| It takes away the pressure of development costs and risks associated with opening up a foreign market from the company |
|
|
Term
| Which of the following statements is true about international strategy? |
|
Definition
| It often involves the head office retaining tight control over marketing and product strategy. |
|
|
Term
| Which of the following statements is true about global standardization strategy? |
|
Definition
| It makes most sense when there are strong pressures for cost reductions |
|
|
Term
| Which of the following statements is true about transnational strategy? |
|
Definition
| It fosters a flow of competencies between different subsidiaries in the company's global network of operations. |
|
|
Term
| Global standardization strategy emphasizes customization and product differentiation. |
|
Definition
|
|
Term
| Starbucks, Sony, and Coca-Cola conduct business in two or more countries. These companies can be referred to as multinational companies. |
|
Definition
|
|
Term
| Which of the following is not a risk of exporting? |
|
Definition
| High cost of manufacturing |
|
|
Term
| Which of the following factors increases pressures for cost reductions? |
|
Definition
| Persistent excess capacity |
|
|
Term
| Which of the following statements is true in the context of local demand conditions? |
|
Definition
| A nation's companies gain competitive advantage if their domestic customers are sophisticated and demanding. |
|
|
Term
| Dietizza is a fast food network that makes low-calorie pizzas. As the firm wishes to expand its operations in different locations, it has licensed a few entrepreneurs to open Dietizza outlets under the company's trademark. The entrepreneurs will take up the responsibility of costs, while Dietizza will assist them in running operations. The company will receive royalty payments and a percentage of profits from the entrepreneurs. Which of the following concepts is illustrated here? |
|
Definition
|
|
Term
| Global standardization strategy emphasizes customization and product differentiation. |
|
Definition
|
|
Term
| Which of the following factors increases pressures for local responsiveness? |
|
Definition
|
|
Term
| In the wireless telecommunications industry, different technical standards are found in different parts of the world. A technical standard known as GSM is common in Europe, and an alternative standard, CDMA, is more common in the United States and parts of Asia. Equipment designed for GSM will not work on a CDMA network and vice versa. Which of the following pressures for local responsiveness does this represent? |
|
Definition
| Differences in infrastructure |
|
|
Term
| Relish is a large fast food chain that operates in many countries. As there are several competitors in the fast food sector, the company has been facing intense pressures for achieving low cost structures. The company also faces the task of customizing its product line as there are significant differences in tastes and preferences among customers in different geographic locations. In order to achieve both low costs and product differentiation, the company should aim to pursue a _____ strategy. |
|
Definition
|
|
Term
| Which of the following statements is true in the context of attributes of national competitive advantage? |
|
Definition
| The nature of home demand shapes the attributes of domestically made products |
|
|
Term
| Which entry mode gives a multinational the tightest control over foreign operations? |
|
Definition
| Setting up a wholly owned subsidiary |
|
|
Term
Black and Decker, Capitol One, Gillette, and Unilever are all companies that conduct business in two or more national markets. These companies are known as
multinational companies |
|
Definition
|
|
Term
| WKL Entertainment Inc. is a service-based firm with very few competitors. The company is looking to sell its services in different nations with substantial differences in consumer preferences and where cost pressures are not too intense. Which of the following strategies should WKL Entertainment Inc. managers pursue? |
|
Definition
|
|
Term
| Swedish strength in fabricated steel products (such as ball bearings and cutting tools) has drawn on strengths in Sweden's specialty steel industry. This is an example of which of the following attributes that impact national competitive advantage? |
|
Definition
| Competitiveness of related and supporting industries |
|
|
Term
| Nutrimax, a sports foods manufacturer, has recently expanded its operations to different countries. The company has realized that customers in different countries have different tastes and preferences. So, the company customizes its products based on the country where it's selling. In this scenario, Nutrimax is most likely to be using _____ strategy. |
|
Definition
|
|
Term
| Which of the following generic competitive strategies is a producer of commodity steel most likely to pursue? |
|
Definition
|
|
Term
| Which of the following is NOT a principal danger of a low-cost position approach? |
|
Definition
|
|
Term
| The advantage that focused companies have over their broad market rivals is that they: |
|
Definition
| sell fewer products in bulk to outsell their rivals. |
|
|
Term
| A differentiated product is a product that: |
|
Definition
| provides greater reliability than rival products. |
|
|
Term
| A disadvantage of pursuing a low-cost strategy is that: |
|
Definition
| it makes it difficult for firms to customize their product offerings |
|
|
Term
| A differentiation strategy is based on creating a product that customers perceive as being: |
|
Definition
| distinct from other available products. |
|
|
Term
| The basic proposition of the blue ocean strategy is that many successful companies have built their competitive advantage by: |
|
Definition
| redefining their product offering through value innovation and creating a new market space. |
|
|
Term
Lucy's Swimwear Boutique offers swimwear that is targeted at affluent people who can afford to buy
expensive, handmade swimsuits. Which of the following approaches to market segmentation is Lucy's
Swimwear Boutique using? |
|
Definition
| Focused differentiation strategy |
|
|
Term
| Yankee Candle Company offers customers candles that burn for 50-60 hours, much longer than most department store candle brands. Therefore, customers are willing to pay a higher price for these candles. Which of the following strategies is Yankee Candle Company following? |
|
Definition
|
|
Term
| A disadvantage of pursuing a low-cost strategy is that: |
|
Definition
| it makes it difficult for firms to customize their product offerings |
|
|
Term
| The main difference between companies following a broad low-cost strategy and those following a focus low-cost strategy is in the: |
|
Definition
| degree of market segmentation |
|
|
Term
| Which of the following allows a company to lower cost through functional strategy and organization? |
|
Definition
| Implementing just-in-time inventory control systems |
|
|
Term
| Companies that focus on the higher-income or higher-value end of the market will tend to have a higher cost structure |
|
Definition
|
|
Term
| System Approach In Red Ocean strategy system approach is towards low cost and differentiation |
|
Definition
|
|
Term
| Which of the following statements is true of differentiation and cost structure? |
|
Definition
| Differentiation and cost structure decisions affect one another. |
|
|
Term
| Armando, a technology enthusiast, is often willing to pay premium prices to always have the newest tech gadgets. Armando most likely belongs to the _____ group of customers. |
|
Definition
|
|
Term
| Factors leading to the slow growth of demand in embryonic industries include all of the following except the |
|
Definition
| customer familiarity with products. |
|
|
Term
| Which of the following is a disadvantage of franchising? |
|
Definition
| It results in the delegation of authority to franchisees and thus, the franchisor may not enjoy complete control. |
|
|
Term
| Gadgetbug, an electronic gadgets company, has established itself as one of the industry leaders. The company recently has been facing some amount of competition from certain new entrants. The new entrants offer gadgets in different colors and with interesting artwork embossed. Recognizing that there is a special market for gadgets that are designed uniquely, Gadgetbug has now introduced its own range of uniquely designed gadgets. In this scenario, Gadgetbug's attempt to cater to all the different segments of customers to deter competition demonstrates |
|
Definition
|
|
Term
| Who among the following is most likely to fall under the category of laggards in the context of customer groups? |
|
Definition
| Allan is ignorant about the newest uses of technology and buys new products only when they become an absolute necessity. |
|
|
Term
Alpha corporation owns and controls several retail outlets and is thus pursuing a strategy called franchising
True
False |
|
Definition
|
|
Term
| When a company decides to exit an industry by selling off its business assets to another company, it is said to be using a(n) strategy. |
|
Definition
|
|
Term
| In a bid to expand its business and gain cost advantages, Omega Inc. has established several merchandising outlets in different locations. All the outlets share a good network and are interconnected by information technology. The entire network of outlets operates in the industry as one large company. Which of the following strategies has Omega Inc. most likely used ? |
|
Definition
|
|
Term
| The franchisor typically owns and funds each of its franchisees. (T/F) |
|
Definition
|
|
Term
Early adopters are customers who purchase a new technology or product only when they are convinced that it will be around for a long time.
True
False |
|
Definition
|
|
Term
| In a harvest strategy, a company: |
|
Definition
| extracts maximum profits from its investments. |
|
|
Term
| Which of the following statements is true about fragmented industries? |
|
Definition
| They require companies to use focus strategies because of specialized customer needs. |
|
|
Term
| An app development firm is working on a new product to identify and consolidate a smartphone users' favorite and most used apps into one place on the phone. If the new product will be sold to existing customers, the firm is pursuing a strategy of: |
|
Definition
|
|
Term
| A company uses when it focuses on pockets of demand that are declining more slowly than the industry as a whole to maintain profitability. |
|
Definition
|
|
Term
| Which of the following statements is true about customer categories in the context of growing industries? |
|
Definition
| A typical late majority customer group is a behaviorally conservative set of customers. |
|
|
Term
| Horizontal mergers often lead to industry fragmentation. (T/F) |
|
Definition
|
|
Term
| Which of the following statements is true in the context of declining industries? |
|
Definition
| Not all segments of an industry typically decline at the same rate. |
|
|
Term
| A limit price strategy involves charging a price that is lower than that required to maximize profits in the short run, but is above the cost structure of potential entrants. (T/F) |
|
Definition
|
|
Term
| Which of the following factors of a particular product tends to accelerate customer demand for it? |
|
Definition
|
|
Term
| Which of the following is NOT a strategy used by mature industries to manage industry rivalry? |
|
Definition
|
|
Term
| Which of the following is not a characteristic of a fragmented industry? |
|
Definition
| Large mass-production operation |
|
|
Term
| Which of the following shakeout strategies requires a company to limit or decrease its investment in a business and to extract, or milk, the investment as much as it can? |
|
Definition
|
|
Term
| The goal for companies in the growth stage of the industry life cycle is to maintain its relative competitive position in a rapidly expanding market. (T/F) |
|
Definition
|
|
Term
| Laggards are the customers who are the first ones to try and adopt a new technology. (T/F) |
|
Definition
|
|
Term
| Music CDs and newspaper sales have been falling as users tum to the Internet for their music and news. Which of the following is NOT a strategy for companies in these declining industries? |
|
Definition
|
|
Term
| Which of the following will NOT help an established company in addressing the potential challenge of a disruptive technology? |
|
Definition
| Asking customers if they are interested in the new technology |
|
|
Term
| There is a set of fixed specifications for turbine blades for jet engines. The specifications include the material that needs to be used to manufacture the blades and also the specific dimensions that they need to have; the same specifications are used by all manufacturers. In this scenario, the specifications for jet blades can be referred to as: |
|
Definition
|
|
Term
| Which of the following statements is true about technological paradigm shifts? |
|
Definition
| They have the potential to threaten the survival of established industries. |
|
|
Term
| Which of the following is NOT a basic strategy for a first mover? |
|
Definition
| Discourage development of complementary assets |
|
|
Term
| Technological disruption: |
|
Definition
| compels firms to adopt new business models |
|
|
Term
| With reference to high-technology industries, which of the following is an example of a technical standard? |
|
Definition
| The layout of keys on a keyboard |
|
|
Term
| Which of the following statements is true about establishing technical standards? |
|
Definition
| Technical standards are often set by cooperation among businesses, without government help. |
|
|
Term
| An adequate supply of complements to a product results in |
|
Definition
| more customers opting for the product. |
|
|
Term
| With reference to technical standards, a dominant design refers to: |
|
Definition
| a common set of features or design characteristics. |
|
|
Term
| Consider a cost curve with production volume on the horizontal axis and marginal costs on the vertical axis. What shape would the marginal cost curve most resemble in a high-tech industry? |
|
Definition
|
|
Term
| Cell phone technology is replacing traditional wired phone technology. This is an example of a(n): |
|
Definition
| technological paradigm shift. |
|
|
Term
| An advantage of being a first mover is that: |
|
Definition
| there is an opportunity to increase sales volume ahead of rivals. |
|
|
Term
| An adequate supply of complements to a product results in |
|
Definition
| more customers opting for the product. |
|
|
Term
| Which of the following is NOT true of high-technology industries? |
|
Definition
| First movers have an advantage because their customers avoid switching costs. |
|
|
Term
| Which of the following is NOT a basic strategy for a first mover? |
|
Definition
| Discourage development of complementary assets |
|
|
Term
| Which of the following is true of first movers? |
|
Definition
| The first mover that creates a revolutionary product is in a monopoly position. |
|
|
Term
| Antibody Solutions is a company that specializes in cell-bank storage, and producing antibodies for bacterial and viral infections. It is not considered a high-tech company since it is not technically in the computer or software industry, which is typically considered high-tech. (T/F) |
|
Definition
|
|
Term
Libra Electronics has invented a new technology to make laptops that are extremely lightweight and unbreakable.
The company is advertising aggressively and wishes to create demand for its new range of laptops. To attract customers, the company has priced the laptops attractively. However, in order to make profits, the company has priced the batteries required for the laptops extremely high. Which of the following is illustrated in this scenario? |
|
Definition
|
|
Term
| Which of the following statements is true about new entrants in the context of a technological paradigm shift? |
|
Definition
| New entrants do not need to worry about their established customer base. |
|
|
Term
| Network effects arise in industries where the size ofthe"network" of complementary products is a primary determinant of demand for an industry's product. (T/F) |
|
Definition
|
|
Term
| Network effects arise in an industry where: |
|
Definition
| the size of the network of complementary products is a primary determinant of demand for an industry's product. |
|
|
Term
| Mathernatica 1.0 was one of the most distinctive applications for the short-lived NeXT Computer. It still sets the standard for symbolic math and visualization on Windows, Mac, Linux, and Unix. Mathernatica 1.0 can be described as a(n) application. |
|
Definition
|
|
Term
| When a first mover does not have complementary assets, barriers to imitation are high, and there are several capable competitors, the first mover should: |
|
Definition
| enter into a joint venture to protect the product. |
|
|
