STM Quiz 3 Chapter 5

How can a firm perform value chain activities more cost-effectively?

• By doing things on a smaller scale

• By doing things on a bigger scale

• By increasing marketing expenses

• By differentiating products from competitors

How can a firm reduce shipping costs?

• Ask suppliers to locate far from facilities

• Ask suppliers to locate near facilities

• Increase marketing expenses

• Differentiate products from competitors

What does a Focused Differentiation Strategy focus on?

• Efficiency and low costs

• Quality and innovation

• Customer relationships

• High prices

How can companies differentiate their products?

• By offering a wide selection and one-stop shopping

• By offering a limited selection and high prices

• By offering a similar product to competitors

• By decreasing quality and increasing prices

What does a Focused Differentiation Strategy develop?

• A lean organization

• Strong brand loyalty

• Efficient supply chain management

• A wide product line

What is a benefit of a Focused Low-Cost Strategy?

• Higher prices

• Increased costs

• Lower prices

• Reduced customer satisfaction

What is a risk of a Focused Low-Cost or Focused Differentiation Strategy?

• Others may copy your success

• Your target market may remain stable

• Growth may accelerate

• You may have no competition

When does differentiation work best?

• When buyers value unique features and the company can charge a higher price

• When buyers don't value unique features and the company can't charge a higher price

• When there are many rivals following a similar approach

• When there are few ways to differentiate products

What should companies avoid when differentiating their products?

• Overspending on differentiation efforts

• Underspending on differentiation efforts

• Increasing marketing expenses

• Decreasing prices

What is the main benefit of a broad low-cost strategy?

• Achieve high profit margins

• Especially effective in markets with many price-sensitive buyers

• Differentiate products from competitors

• Increase marketing expenses