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Chapter Quiz
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1
Which of Porter's generic strategies should be used when directing attention toward narrow product lines, buyer segments or targeted geographic markets?
A)overall cost leadership
B)differentiation
C)focus
D)constricted
2
For a cost leader, competitive parity on the basis of differentiation is necessary and will result in higher profits.
A)True
B)False
3
Which of the following is an example of using a differentiation strategy to improve a firm's competitive position as defined by the five forces model?
A)General Mills enjoys greater scale economies and erects higher entry barriers for others by increasing productivity and lowering unit costs.
B)Ryanair pays close attention to costs helps in order to protect the company from buyer power and intense rivalry from competitors.
C)Lexus has enjoyed enhanced power over buyers because its top J. D. Power ranking makes buyers more willing to pay a premium price.
D)Network Appliances, the successful rival to EMC in the computer storage industry, was able to absorb pricing increases from suppliers as a result of its lower cost structure.
4
Two variants of the focus strategy rely on providing better service than broad-based competitors who are trying to serve the focuser target segment. What are they?
A)single and multiple
B)cost and differentiation
C)breakaway and consolidation
D)growth and maturity
5
A combination strategy provides multiple types of value to customers. A mass customization strategy is a combination strategy, because it provides unique products to customers and lower costs to the firm.
A)True
B)False
6
The use of the Internet and digital technologies makes it easier to use traditional differentiation strategies such as building strong brand identity and prestige pricing.
A)True
B)False
7
Which of the following is NOT an Internet-enabled focus strategy?
A)Permission marketing techniques are focusing sales efforts on specific customers who opt to receive advertising notices.
B)Niche portals that target specific groups are providing advertisers with access to viewers with specialized interests.
C)Virtual organizing and online officing are being used to minimize firm infrastructure requirements.
D)Paperless transactions reduce the costs of procurement and paper due to online purchase orders.
8
Most products have multiple cycles of innovation and renewal.
A)True
B)False
9
Efforts in the growth stage of the industry life cycle are directed toward stimulating what type of demand in which a product offering of a firm is chosen over that of a rival?
A)unilateral
B)selective
C)aggregate
D)breakaway
10
Which of the following is FALSE regarding the decline stage of the industry life cycle?
A)If competitors leave the market, sales and profit opportunities increase.
B)Firms should exit the market once it is clear that an industry is declining.
C)A firm's market power may be eroded if competitors merge.
D)Decline may be brought on by a change in consumer preferences.





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