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.   True
B.   False
Question #2
Differentiation can help a company grow overall demand and capture market share from its rivals.
A.   True
B.   False
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.   False
B.   True
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.   True
B.   False
Question #6
The globalization of production has been decreasing as companies have been facing lower barriers to international trade and location economies.
A.   False
B.   True
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.   False
B.   True
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.   Focus differentiation strategy
C.   Broad high-cost strategy
D.   Low market segmentation strategy
E.   Broad differentiation strategy
Question #12
A company pursuing a focus strategy:
A.   produce different offerings for different segments.
B.   attempts to serve all market segments.
C.   has a greater impact on costs and revenues.
D.   concentrates on building market share in one market segment.
E.   typically has more resources at its disposal than a differentiator does.
Question #13
Global economies of scale can be realized by:
A.   curbing bargaining power with suppliers.
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.   limiting the utilization of production facilities.
Question #14
Which of the following factors increases pressures for cost reductions?
A.   Persistent excess capacity
B.   Competitors that are based in high-cost locations
C.   High switching costs
D.   Reduced international competition
E.   Meaningful differentiation between products
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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