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Exam 5: Business-Level Strategy: Creating and Sustaining Competitive Advantages

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Question 61

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In evaluating the sustainability of the Atlas Door competitive advantages over the long run, it is important to evaluate the ability of rivals to

A) easily imitate its strategy.
B) communicate with its customers.
C) consistently overprice their products.
D) find new suppliers.

E) B) and D)
F) B) and C)

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Question 62

Multiple Choice

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Rivals would find it difficult to challenge Atlas Door in the short run because of

A) weak customer loyalty.
B) high barriers to entry.
C) high threat of substitution.
D) low buyer switching costs.

E) A) and B)
F) C) and D)

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Question 63

Multiple Choice

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Which statement regarding competitive advantages is true?

A __________ can be defined as the total profits in an industry at all points along the industry value chain.

Porsche has enhanced power over buyers because its strong reputation makes buyers more willing to pay a premium price. This ______ rivalry, since buyers become _____ price-sensitive.

The factors that lead to a low-cost position do not provide a substantial entry barriers position with respect to substitute products introduced by new and existing competitors.

Barnes and Noble lost its market share in book retailing to Amazon. It tried to regain market share by offering a similar electronic reader, the Nook, to the Amazon Kindle series. This demonstrates that Barnes and Noble lacked

Which of the following is FALSE regarding how a differentiation strategy can help a firm to improve its competitive position relative to the Porter five forces model?

The desktop computer is in the decline stage of the industry life cycle, but it is not dead because companies have found ways to improve the price-performance trade-off.

Piecemeal productivity improvements can be used by a mature business in need of a turnaround.

Renault has found a way to generate high profits on low-priced cards by using simple designs that incorporate components from older car designs and a no-discount retail policy. They are using a(n) ______________ strategy.

Atlas Door could lose competitive advantage for all of the following reasons except

Given the attractiveness of premium pricing during the growth stage of the market life cycle, managers should emphasize short-term results to increase profits.

Zulily pays close attention to costs which helps to protect the company from buyer power and intense rivalry from competitors.

Renault both lessens the degree of rivalry it faces and increases entry barriers for new entrants by increasing productivity and lowering unit costs.

Which of the following is most often true of mature markets?

Focus, by itself, often constitutes a competitive advantage.

A need for turnaround occurs only during the maturity or declining stage of the life cycle.

Due to its size with over 475 billion USD in sales in 2014, Walmart has enormous bargaining power over its suppliers.

Concentrating solely on one form of competitive advantage generally leads to the highest possible level of profitability.