Business Level Strategy

Question 1

a strategy designed for a firm or a division of a firm that competes within a single business

Answer 1

5.1. Business-level strategy

Question 2

basic types of business-level strategies based on breadth of target market (industrywide versus narrow market segment) and type of competitive advantage (low cost versus uniqueness).

Answer 2

5.2. Generic strategies

Question 3

a firm’s generic strategy based on appeal to the industrywide market using a competitive advantage based on low cost.

Answer 3

5.3. Overall cost leadership

Question 4

the decline in unit costs of productions as cumulative output increases.

Answer 4

5.4. Experience curve

Question 5

a firm’s achievement of similarity, or being “on par, with competitors with respect to low cost, differentiation, or other strategic product characteristic.

Answer 5

5.5. Competitive parity

Question 6

a firm’s generic strategy based on creating differences in the firm’s product or service offering by creating something that is perceived industrywide as unique and valued by customers.

Answer 6

5.6. Differentiation strategy

Question 7

a firm’s generic strategy based on appeal to a narrow market segment within an industry.

Answer 7

5.7. Focus strategy

Question 8

firm’s integrations of various strategies to provide multiple types of value to customers.

Answer 8

5.8. Combination strategies

Question 9

– a firm’s ability to manufacture unique products in small quantities at low cost.

Answer 9

5.9. Mass customization

Question 10

– the total profits in an industry at all points along the industry’s value chain.

Answer 10

5.10. Profit pool

Question 11

the first stage of the industry life cycle, characterized by (1) new products that are not known to customers, (2) poorly defined market segments, (3) unspecified product features, (4) low sales growth, (5) rapid technological change, (6) operating losses, and (7) a need for financial support.

Answer 11

5.12. Introduction stage

Question 12

the second stage of the product life cycle, characterized by (1) strong increases in sales; (2) growing competition; (3) developing brand recognition; and (4) a need for financing complementary value-chain activities such as marketing, sales, customer service, and research and development.

Answer 12

5.13. Growth school

Question 13

the third stage of the product life cycle, characterized by (1) slowing demand growth, (2) saturated markets, (3) direct competition, (4) price competition, and (5) strategic emphasis on efficient operations.

Answer 13

5.14. Maturity stage

Question 14

a break in the industry tendency to continuously augment products, characteristics of the product life cycle, by offering products with fewer product attributes and lower prices.

Answer 14

5.15. Reverse positioning

Question 15

a break in the industry tendency to incrementally improve products along specific dimensions, characteristics of the product life cycle, by offering products that are still in the industry but are perceived by customers as being different.

Answer 15

5.16. Breakaway positioning

Question 16

the stages of introduction, growth, maturity, and decline that typically occur over the life of an industry.

Answer 16

5.11. Industry life cycle

Question 17

the fourth stage of the product life cycle, characterized by (1) falling sales and profits, (2) increasing price competition, and (3) industry consolidation.

Answer 17

5.17. Decline stage

Question 18

– a strategy of wringing as much as possible out of a business in the short to medium term by reducing costs.

Answer 18

5.18. Harvesting strategy

Question 19

a firm’s acquiring or merging with other firms in an industry in order to enhance market power and gain valuable assets.

Answer 19

5.19. Consolidation strategy

Question 20

a strategy that reverses a firm’s decline in performance and returns it to growth and profitability.

Answer 20

5.20. Turnaround strategy