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Strategic Management An Integrated Approach 10th Edition By Charles – Test Bank
Chapter 5–Building Competitive Advantage Through Business-Level Strategy
Student: ___________________________________________________________________________
1. A firm’s business model should contain three components: what is to be satisfied, who is to be satisfied, and how they will be satisfied.
True False
2. Both the way a product is differentiated from other products of its type and the price of the product determine which product a customer chooses to satisfy his or her needs.
True False
3. Companies with a differentiation advantage must charge a lower price for their products.
True False
4. A company searching for a successful business model has to group customers according to the similarities or differences in their needs to discover what kinds of products to develop that will best meet the needs of different kinds of customers.
True False
5. Market segmentation addresses the “what” portion of a firm’s business model.
True False
6. Maximizing the profitability of a company’s business model is about making the right choices with regard to value creation through differentiation, costs, and pricing given both the demand conditions in the company’s market and the competitive conditions in the company’s industry.
True False
7. Companies that successfully pursue a cost leadership strategy generally have a distinctive competency in research and development.
True False
8. All focus strategies entail serving a specific market segment using a differentiation approach.
True False
9. A cost leader must respond to the strategic moves of its differentiated competitors.
True False
10. Differentiation on the basis of innovation and technological competency depends on the research and development function.
True False
11. A major problem with a differentiation strategy centers on the long-term ability to maintain a product’s perceived difference or distinctness in customers’ eyes.
True False
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