Question

1. It stands to reason that the greater the consumer’s ___________, the better he or she feels about the deal at the time of purchase.

• a. producer surplus
• b. consumer surplus
• c. price
• d. value
• e. economic value created

2. Rolls Royce makes a car that is considered by many to be the height of luxury. Its $400K price tag suggests that the company is using a ____________________ competitive strategy.

• a. first mover
• b. broad differentiation
• c. Overall cost leadership
• d. focused differentiation

focused cost leadership

3. The Honda Accord offers a great combination of values for its customer. While it does not provide the highest level of luxury or performance, it is clearly a step up from entry level automobiles present in the market. As such, the Accord represents an example of the execution of _________________________.

• a. best-cost strategy
• b. differentiation strategy
• c. cost leadership strategy
• d. price leadership strategy

balanced scorecard strategy

4. The aspect that makes cost leadership superior to price leadership as a source of sustainable competitive advantage is:

• a. rarity
• b. value
• c. inimitability
• d. value innovation
• e. differentiation

5. A business strategy is more likely to lead to a competitive advantage if it has a clear strategic profile as:

• a. Either a cost leader or a differentiator
• b. A cost leader
• c. A differentiator
• d. A cost leader and a differentiator
• e. A balanced scorecard

6. Amazon’s decision to shift its newly acquired Whole Foods stores to a more price competitive position in the industry is an example of:

• a. Corporate-level strategy.
• b. Business-level strategy.
• c. Functional-level strategy.
• d. The mission statement.
• e. The vision statement.

7. Since competition is competition, business-level strategy can be just as effective in dealing with Porter's Five Forces as it is in dealing with competitors.

• a. True
• b. False

Answer 1

1. The answer is d.

Customer value refers to the perception of the customer about the worthiness of a product or service as compared to the possible alternatives.