Chapter 5 Quiz

1. Southwest Airlines focuses on low prices, transparency and customer service. The
company also appeals to many different customers. What strategy is the company
employing?
Select one:
A. Broad Low-Cost Strategy
B. Broad Differentiation Strategy
C. Focused Low-Cost Strategy
D. Focused Differentiation Strategy
E. Marginal-Cost Strategy

Correct Answer: A

2. Which quadrant is suitable for most Acura models?

Select one:
A. Focused Low Cost
B. Focused Differentiated
C. Broad Differentiated
D. Broad Low Cost

Correct Answer: C

3. Firms may enjoy pursuing a focused strategy for all of the following reasons except
Select one:
A. customers in their niche gravitate towards specialty products
B. limited demand exists
C. high prices can be charged
D. they have greater expertise

Correct Answer: B

4. Which of the following represents a best-cost strategy?

Select one:
A. Zappos offers customers unique products and excellent customer service.
B. IKEA is able to offer customers unique furniture at low prices.
C. Subaru offers customers unique vehicles built for towing.
D. Miller Brewing Company offers unique beer with excellent customer service.
E. Staples is able to offer customers printing supplies at the lowest cost.

Correct Answer: B

5. Which one of the following generic strategies is typically the right one for a business to
use?

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 Select one:
A. A broad differentiation strategy
B. A strategy that is customized a firm’s capabilities as well as macro-environment and
industry conditions
C. A broad low-cost strategy
D. A best-cost provider strategy
E. A focused low-cost strategy

Correct Answer: B

Chapter 6 Quiz

1. Which of the following is a disadvantage of being a first mover?

Select one:
A. The potential to be a major innovator.
B. The potential to establish a dominant position for a product/service.
C. The potential to overcome traditional entry barriers.
D. The potential to unnerve industry competitors.
E. The potential to ensure that customers are attracted to your product.

Correct Answer: E

2. Electric vehicles have the potential to replace traditional gasoline powered vehicles
as a lower cost, more efficient and more sustainable option. In this scenario, electric
vehicles can be viewed as a ___________.
Select one:
A. Blue Ocean Strategy
B. First Mover
C. Foothold
D. Disruptive Innovation
E. Bricolage

Correct Answer: D

3. Which of the following demonstrates fighting brands as a way to respond to rival's

moves?
Select one:
A. Fisher-Price and Mattel realize they have more to lose through hostility than they
can potentially gain.
B. Delta Airlines chooses to directly replicate the competitor's moves.
C. Jeep introduces a new model that is inexpensive and quality-focused to maintain
profits.

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 D. Coca-Cola introduces a new line of flavored diet beverages to maintain
competitiveness.
E. Regal Cinemas decides to relocate theater locations to other regions due to the
presence of their major competitor.

Correct Answer: C

4. Which of the following demonstrates the A-M-C Framework in reacting to

competitive tension?
Select one:
A. Apple realizes a new entrant is a competitor and has the drive to respond.
B. Walmart is familiar with a competitor, cannot decide how to respond and needs to
further analyze the competitive situation.
C. ExxonMobile realizes a threat but chooses not to act defensively.
D. CVS Health is aware of a specific threat and knows it can combat unexpected
competitors.
E. Nestle is alerted of a threat, is prompted to respond and has the resources to
retaliate.

Correct Answer: E

5. Although it might not be a great success, what if Chaco and Toms (which are both
footwear brands) decide to partner and create a completely new entity called Taco.
Taco will focus on putting different food designs on shoes. This would be best
defined as _______.
Select one:
A. co-opetition
B. a strategic alliance
C. a joint venture
D. colocation
E. a coalition

Correct Answer: C

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