LSU. Strategic Management Module 4 Exam 1SU

Question 1

LSU. Strategic Management Module 4 Exam 1SU. Product differentiation can occur in different ways depending on whether customers agree on which product is superior or simply have different preferences. Which of the following statements is true?

• None of the possible answers
• Firms can differentiate products vertically and horizontally
• Vertically differentiated products are more difficult to imitate than horizontally differentiated products
• There is little or no consensus on the value of vertically differentiated products

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Question 1 (Page 3)

One of the ways firms support their product differentiation strategy is by

• producing high quality goods
• increasing sales
• increasing economies of scale
• increasing reputation

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Question 1 (Page 4)

Successful coaches have well defined ________.

• all answer choices
• strategy and tactics
• tactics
• strategy

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Question 1 (Page 5)

Jared Campers plans to open a nightclub near Youngstown State University. He tells his friend that he will begin with a differentiation strategy by offering a unique atmosphere and premium services, but if that fails, he will switch to a cost-leadership strategy by lowering prices. Based on strategic management principles, Jared ________ switch from a low-cost strategy to a differentiation strategy, or vice versa, because strategic positions are ________.

• Can easily; temporary
• Can easily; based on marketing decisions
• Cannot; irreversible
• Cannot; reversible

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Question 5

Kevin P owns a hotel chain operating in New York and Los Angeles. Customers choose his hotels for their cleanliness, comfort, and convenient proximity to the city center. However, guests rave about the presence of highly personalized service, fine-dining restaurants led by renowned chefs, and boutique experiences, rather than cleanliness and comfort.

Which of the following bases of Kevin P’s competitive advantage is likely the easiest for competitors to imitate?

• The hotel’s reputation built through industry awards
• Customers’ perception of the hotel as a prestigious brand
• The hotel’s visible product attributes, such as spotless white sheets and clean rooms
• The credibility associated with recognition from professional associations

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Question 6

Jackson Brown owns multiple bakery stores in the Youngstown area under the name Y-Bakery Style. A Nepalese student at Youngstown State University suggests opening a branch in Kathmandu, Nepal, where demand for high-quality cakes and bread is growing. Jackson plans to offer the same product line in Nepal as he does in the United States. However, expanding internationally would require him to move capital and labor across national borders. If Jackson enters the Nepali market, this would be considered competing in ________ because moving capital and labor requires him to follow ________.

• a single market; both Nepali and U.S. laws and regulations
• a single market; only the U.S. laws and regulations
• a single market; Nepali laws and regulations
• multiple markets; both Nepali and U.S. laws and regulations

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Question 7

________ is a business strategy whereby firms attempt to gain a competitive advantage by increasing the perceived value of their products or services relative to the perceived value of other firms’ products or services.

• product differentiation
• best-cost provider
• cost leadership LSU. Strategic Management Module 4 Exam 1SU
• related diversification

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Question 8

Kevin P owns a hotel chain operating in New York and Los Angeles. Customers choose his hotels for their cleanliness, comfort, and convenient proximity to the city center. However, guests rave about the presence of highly personalized service, fine-dining restaurants led by renowned chefs, and boutique experiences, rather than cleanliness and comfort.

Kevin P’s hotel chains must be pursuing?

• Cost leadership
• Product differentiation
• Related diversification
• Unrelated diversification

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Question 9

Professor Dangol owns Dangol LLC, a company that produces soccer balls. To gain an advantage over competing producers, Dangol LLC introduced a divisional labor system in which employees specialize in specific production tasks. This specialization has improved efficiency and allowed the company to increase its production volume.

By using employee specialization to increase production efficiency and output, Dangol LLC is pursuing which source of cost advantage?

• size differences and diseconomies of scale
• economies of scale
• technological advantages
• differential access to productive inputs

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Question 10

Our textbook defines strategy as a theory of competitive advantage. According to this definition, the theory of strategy is best described as:

• developing an understanding of what it takes to be the best in the industry.
• An explanation of why certain management actions lead to competitive advantage, while others do not.
• gaining an understanding of how to outsmart competitors.
• How to implement activities to gain a competitive advantage

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Question 11

While firms often alter the ________ of their products or services in order to implement a product-differentiation strategy, the existence of product differentiation, in the end, is always a matter of ________.

• customer perceptions; price
• customer perceptions; objective properties
• objective properties; price
• objective properties; customer perception

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Question 12

Cost leadership and product differentiation are ________.

• business-level strategies.
• macro-level strategies.
• corporate-level strategies.
• functional-level strategies.

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Question 13

Which of the following is an example of how businesses can achieve a technological advantage?

• increasing advertising spend
• Offering more product variations
• Hiring more staff than needed
• Designing products for easy and cost-effective manufacturing LSU. Strategic Management Module 4 Exam 1SU

Question 14

Apple Inc. sells several standardized versions of the iPhone, with prices close to $1,000. Despite the high price, many customers are willing to purchase these standardized models. To produce iPhones efficiently at large scale, Apple has invested heavily in specialized manufacturing plants and production systems. Apple’s investment in specialized plants indicates that it is pursuing which competitive strategy?

• mixed strategy
• customer-focused strategy
• product differentiation strategy
• cost leadership strategy

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Question 15

Which of the following bases of product differentiation attempts to create the perception that a firm’s products or services are unusually valuable by focusing directly on the attributes of the products or services a firm sells?

• product complexity
• reputation
• consumer marketing
• product customization

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Question 16

Firms that create the same economic value as their rivals experience competitive ________.

• superiority.
• advantage.
• disadvantage.
• parity.

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Question 17

Professor Dangol owns Dangol LLC, a company that produces soccer balls in different standardized sizes (1, 3, 4, and 5). To gain a competitive advantage, Dangol LLC invested more than $10 million in specialized plants and equipment to increase production volume.

Dangol LLC is pursuing which strategy?

• product-differentiation business strategy
• cost-leadership corporate strategy
• product-differentiation corporate strategy
• cost-leadership business strategy

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Question 18 (Page 19)

A firm trying to differentiate its products based on product attributes can employ which of the following business models based on

• Product features
• Economies of scale
• Consumer relationships
• Consumer marketing

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Question 18 (Page 20)

When marketing its products, a cost leadership business will emphasize ________.

• functionality and value
• product exclusivity and value
• business reputation and style
• product features and style

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Question 18 (Page 21)

According to Porter’s generic strategies, firms that attempt to pursue both cost leadership and differentiation simultaneously without a clear strategic focus are likely to become ________ and experience a ________.

• Stuck in the middle; competitive disadvantage
• Strategy—structure alignment; competitive advantage
• Stuck in the middle; competitive advantage
• Focused on markets; competitive advantage

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Question 18 (Page 22)

________ helps a firm understand which of its resources and capabilities are likely to be sources of competitive advantage.

• Comparative analysis
• Internal analysis LSU. Strategic Management Module 4 Exam 1SU
• Competitive analysis
• External analysis

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Question 18 (Page 23)

Business-level strategy focuses on how a firm competes within a particular industry or product market. It involves decisions about the firm’s competitive position and how it creates value for customers. Which of the following best describes a business-level strategic choice?

• Positioning a firm within a single market or product line
• All answers
• Positioning a firm as offering high quality or low priced products
• Positioning a firm in international markets

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Question 18 (Page 24)

Which of the following is a recognized source of cost advantage in strategic management?

• Differential cost of innovative products
• All of the above
• Differential cost of inputs
• Differential cost of product styles

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Question 18 (Page 25)

A differentiation strategy focuses on increasing a product’s perceived uniqueness and value so customers are willing to pay a premium. Which of the following is NOT typically associated with a differentiation strategy?

• Producing unique or customized versions of products
• Increasing customers’ willingness to pay more
• Increasing the sense of scarcity or exclusivity of a product or service
• Producing different models of standardized products

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Question 22 (Page 26)

In strategic management, firm activities are considered strategic when they involve commitment to ________.

• customer segments
• shared organizational vision
• market segments
• irreversible resources

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Question 22 (Page 27)

Consumers often agree when one product is objectively better than another, for example, a hotel with cleaner rooms and better service. However, in some cases, people have different preferences without agreeing that one option is objectively superior. For example, there is no consensus that one political party is universally better than another—preferences depend on individual beliefs and values. This example illustrates which type of differentiation?

• Socially differentiated
• Horizontally differentiated
• Vertically differentiated
• Geographically differentiated

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Question 22 (Page 28)

If Dangol Inc. and Jefferson LLC compete in the same market for the same customer and Dangol Inc. generates $900 of economic value each time it sells a product or service while Jefferson LLC generates $400 of economic value each time it sells a product or service. Dangol Inc. has a competitive advantage of:

• $3,600.
• $1,300. LSU. Strategic Management Module 4 Exam 1SU
• $360,000.
• $500.