Chapter5—Business-Level Strategy.doc

Chapter5—Business-Level Strategy TRUE/FALSE The goal of business-level strategy is to earn above-average returns. ANS: T PTS: 1 DIF: Medium REF: 98 A business-level strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage in specific product markets. ANS: T PTS: 1 DIF: Medium REF: 98 A low-cost position in the industry is not a valuable defense against rivals when competing on the basis of price. ANS: F PTS: 1 DIF: Medium REF: 106-109 A risk of the differentiation strategy is that the firm’s means of differentiation may eventually not provide value to the customer. ANS: T PTS: 1 DIF: Easy REF: 110-113 A flexible manufacturing system is a computer-controlled process used to produce a variety of products in moderate, flexible quantities with minimal manual intervention. ANS: T PTS: 1 DIF: Medium REF: 119 A customer relationship management system will allow firms to identify the trade-offs that customers are willing to make between differentiated features and low cost. ANS: T PTS: 1 DIF: Easy REF: 119-120 MULTIPLE CHOICE A firm’s core strategy is its ____ strategy. a. corporate b. pricing c. business d. international ANS: C PTS: 1 DIF: Easy REF: 98 When selecting a business level strategy, the firm must determine all of the following EXCEPT a. How will the customer’s needs be satisfied? b. Who is the customer? c. What are the customers’ needs? d. Why should these customers’ needs be satisfied? ANS: D PTS: 1 DIF: Medium REF: 99 Before the firm decides what products to offer and what benefits and features they will have, the firm must decide all the following questions EXCEPT a. who the firm should serve. b. what core competencies are needed to satisfy customer needs. c. what needs the firm should satisfy. d. when the customer’s needs should be satisfied. ANS: D PTS: 1 DIF: Medium REF: 101-103 Business-level strategies are concerned specifically with a. creating differences