Chapter 6 - Business Strategy:
Differentiation, Cost
Leadership, and Blue Oceans
exam questions and answers
2025(graded A+)
the most significant challenge JetBlue faced in implementing its
business strategy was - answer reconciling the trade-offs between
cutting costs and providing superior service
A ___________ outlines the steps a manager will take to achieve a
competitive advantage in a single product market. - answer
Business-level strategy
To formulate an appropriate business-level strategy, managers must
answer the ___________ questions of competition - answer who,
what, why, and how
A firm's competitive advantage is determined jointly by ___________
effects and firm effects. - answer industry
How to compete on a business level is defined by the variables,
value and cost. Together they define the - answer economic value
created
A firm's strategic position is determined by the relationship of which
two variables? - answer value creation and cost
, Choosing a business-level strategy helps to define a firm's ___________
in a given product market. - answer strategic position
What are considered the two generic business-level strategies? -
answer cost-leadership and differentiation
In a focused differentiation strategy, the competitive scope is
___________ than in a traditional differentiation strategy. - answer
narrower
High-end pen manufacturer Mont Blanc pursues a differentiation
strategy with a ___________ scope of competition, pursuing only those
who need or want an expensive writing instrument. - answer
focused
What determines a firm's competitive advantage? - answer value
position relative to competitors and cost pisition relative to
competitors
What best exemplifies a company that uses differentiation? - answer
Company X strengthens its brand by marketing a product with an
innovative feature
When pursuing a differentiation strategy, a firm can achieve a
competitive advantage by - answer ensuring that its economic
value exceed that of its competitors
A differentiation strategy is typically associated with ___________
pricing - answer premium
What best defines economies of scope? - answer They are the
savings that come from producing two or more outputs at less cost
than producing each output individually.
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