Management 405 - Strategic Management » Fall 2022 » Quiz 3

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Question #1
At its most basic, a firm's business-level strategy is about whom a company decides to serve, what customer needs and desires the company is trying to satisfy, and how the company decides to satisfy those needs and desires.
A.   False
B.   True
Question #2
Differentiation can help a company grow overall demand and capture market share from its rivals.
A.   False
B.   True
Question #3
A company has a competitive advantage if it can increase costs relative to rivals.
A.   True
B.   False
Question #4
In commodity markets, competitive advantage goes to the company that has the lowest costs.
A.   True
B.   False
Question #5
Market segmentation refers to the process of subdividing a market into clearly identifiable groups of customers with similar needs, desires, and demand characteristics.
A.   False
B.   True
Question #6
The globalization of production has been decreasing as companies have been facing lower barriers to international trade and location economies.
A.   True
B.   False
Question #7
Factor endowments—the cost and quality of factors of production—are a prime determinant of the competitive advantage that certain countries have in certain industries.
A.   False
B.   True
Question #8
By offering a standardized product to the global marketplace and manufacturing that product in each nation in which it does business irrespective of production costs, a multinational company can realize substantial scale economies.
A.   False
B.   True
Question #9
Location economies refer to the economic benefits that arise from performing a value creation activity at an optimal location.
A.   False
B.   True
Question #10
A localization strategy is most appropriate when there are substantial differences across nations or regions with regard to consumer tastes and preferences, and where cost pressures are not too intense.
A.   True
B.   False
Question #11
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?
A.   Medium market segmentation strategy
B.   Low market segmentation strategy
C.   Broad differentiation strategy
D.   Focus differentiation strategy
E.   Broad high-cost strategy
Question #12
A company pursuing a focus strategy:
A.   produce different offerings for different segments.
B.   has a greater impact on costs and revenues.
C.   concentrates on building market share in one market segment.
D.   attempts to serve all market segments.
E.   typically has more resources at its disposal than a differentiator does.
Question #13
Global economies of scale can be realized by:
A.   limiting the utilization of production facilities.
B.   decreasing cost savings through learning effects.
C.   spreading the fixed costs associated with developing a product.
D.   restricting the expansion of overseas sales.
E.   curbing bargaining power with suppliers.
Question #14
Which of the following factors increases pressures for cost reductions?
A.   Meaningful differentiation between products
B.   Persistent excess capacity
C.   Reduced international competition
D.   High switching costs
E.   Competitors that are based in high-cost locations
Question #15
Companies that pursue a __________ strategy are trying to develop a business model that simultaneously achieves low costs, differentiates the product offering across geographic markets, and fosters a flow of skills between different subsidiaries in the company’s global network of operations.
A.   transnational
B.   centralization
C.   localization
D.   global standardization
E.   downsizing

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