Accy Problem Set #1

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  • 1/13 Questions

    ________ occur when larger more established firms are able to reduce the cost of operation per unit of product or service.

    • Economies of scale
    • Economies of experience
    • Vertical integration
    • Location
    • None of the above
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About This Quiz

This quiz assesses knowledge in strategic management, focusing on competitive strategies, market positioning, and response to customer needs.

Accy Problem Set #1 - Quiz

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  • 2. 

    A company invests in extensive customer training to assure high-quality product installations. Which strategy is the company most likely using?

    • Low-cost leadership

    • Differentiation

    • Focused differentiation strategy

    • B or c

    • None of the above

    Correct Answer
    A. B or c
    Explanation
    The company is most likely using a differentiation strategy. By investing in extensive customer training, the company aims to provide high-quality product installations, which sets them apart from competitors and creates a unique value proposition for customers. This strategy focuses on offering a superior product or service that is perceived as unique and valuable by the target market.

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  • 3. 

    A company prides itself on rapid response to customers' unique manufacturing specifications. What type of strategy is the company using?

    • Low cost leadership

    • Differentiation

    • Focused differentiation strategy

    • B or c

    • None of the above

    Correct Answer
    A. B or c
    Explanation
    The company is using a differentiation strategy. This is evident from the statement that the company prides itself on rapid response to customers' unique manufacturing specifications. By focusing on providing unique and customized solutions to customers, the company differentiates itself from competitors and creates value for customers. This strategy allows the company to stand out in the market and gain a competitive advantage.

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  • 4. 

    A company's competitive advantage is strongly based on its ability to improve the performance and quality characteristics of its product. The company is most likely using a

    • Low cost leadership strategy

    • Differentiation strategy

    • Focused differentiation strategy

    • B or c

    • None of the above

    Correct Answer
    A. B or c
    Explanation
    The correct answer is either a differentiation strategy or a focused differentiation strategy. This is because a company's competitive advantage is strongly based on its ability to improve the performance and quality characteristics of its product, which aligns with the goals of differentiation strategies. These strategies focus on creating unique and superior products that stand out in the market, allowing the company to charge premium prices and attract customers who value the enhanced features or benefits. Focused differentiation strategy further narrows down the target market to a specific segment, allowing the company to tailor its products to meet the unique needs and preferences of that particular group.

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  • 5. 

    The market for a company's product is large and broad-based. The company's competitive advantage is strongly based on developing economies of scale. The company is most likely using a

    • Low-cost leadership strategy

    • Differentiation strategy

    • Focused low-cost leadership strategy

    • A and c

    • None of the above

    Correct Answer
    A. Low-cost leadership strategy
    Explanation
    The company's competitive advantage being strongly based on developing economies of scale indicates that the company is focused on reducing costs and achieving efficiency in production. This aligns with a low-cost leadership strategy, where the company aims to offer its product at a lower cost compared to competitors while maintaining acceptable quality. This strategy allows the company to appeal to a broad market and gain a competitive edge. Therefore, the correct answer is a low-cost leadership strategy.

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  • 6. 

    A company has highly efficient systems to link its suppliers' products with the firms' production processes. Which strategy is the company most likely using?

    • Low-cost leadership

    • Differentiation

    • Focused low-cost leadership

    • A or c

    • None of the above

    Correct Answer
    A. A or c
    Explanation
    The company is most likely using a combination of low-cost leadership and focused low-cost leadership strategies. This is because the highly efficient systems that link suppliers' products with the firm's production processes indicate a focus on cost reduction and efficiency. By optimizing the supply chain and production processes, the company can achieve cost advantages and offer products at competitive prices. Additionally, the mention of "focused" suggests that the company may be targeting a specific market segment or niche to further differentiate itself.

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  • 7. 

    _______________ occur when cost reductions result from continuous repetition of activities that allow for improvement with each successive act.

    • Economies of scale

    • Economies of experience

    • Vertical integration

    • Location

    • None of the above

    Correct Answer
    A. Economies of experience
    Explanation
    Economies of experience occur when cost reductions result from continuous repetition of activities that allow for improvement with each successive act. This means that as a company gains more experience in performing certain tasks or producing certain products, they become more efficient and effective, leading to cost savings. This can be achieved through learning and improving processes, adopting best practices, and gaining knowledge and expertise over time. As a result, economies of experience can contribute to increased productivity and profitability for the company.

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  • 8. 

    A company relies heavily on vertical integration to compete in its product market. Its product market is wide and broad based. What type of strategy is the company using?

    • Low cost leadership

    • Differentiation

    • Focused low-cost leadership strategy

    • A or c

    • None of the above

    Correct Answer
    A. Low cost leadership
    Explanation
    The company is using a low cost leadership strategy. This strategy involves minimizing costs in order to offer products at a lower price compared to competitors. By relying heavily on vertical integration, the company can control and streamline its supply chain, reducing costs and gaining a competitive advantage in the broad and wide product market.

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  • 9. 

    A company's competitive advantage is strongly based on its proximity to key suppliers. The company is most likely using a

    • Low-cost leadership strategy

    • Differentiation strategy

    • Focused low-cost leadership strategy

    • A or c

    • None of the above

    Correct Answer
    A. A or c
    Explanation
    The company's competitive advantage being strongly based on its proximity to key suppliers suggests that it is able to obtain cost advantages by being close to its suppliers. This aligns with a low-cost leadership strategy, where a company aims to offer products or services at a lower cost than its competitors. Additionally, it could also align with a focused low-cost leadership strategy, where the company targets a specific market segment and aims to offer products or services at a lower cost within that segment. Therefore, the correct answer is either a or c.

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  • 10. 

    The market for a company's product is large and broad-based. The company's competitive advantage is strongly based on lowering the customer's cost. The company is most likely using

    • A low-cost leadership strategy

    • A differentiation strategy

    • A focused low-cost leadership strategy

    • A or c

    • None of the above

    Correct Answer
    A. A differentiation strategy
    Explanation
    Remember the lightbulb example...lowering the customer's long-term costs (not initial)

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  • 11. 

    A company competes by finding ways to reduce its customers' cost. The company's customers are generally white males between the ages of 18 and 26. What type of strategy is the company using?

    • Low cost leadership

    • Differentiation

    • Focused differentiation strategy

    • Focused low-cost leadership strategy

    • B or c

    Correct Answer
    A. B or c
    Explanation
    The company is using a focused differentiation strategy. This is because they are targeting a specific group of customers, white males between the ages of 18 and 26, and finding ways to reduce their costs. By focusing on this specific market segment and offering unique value propositions, the company aims to differentiate itself from competitors and attract these customers.

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  • 12. 

    A company with a large broad based market uses a strategy that leaves it susceptible to failure to innovate. Which strategy is the company most likely using?

    • Low-cost leadership

    • Differentiation

    • Focused differentiation

    • B or c

    • None of the above

    Correct Answer
    A. Differentiation
    Explanation
    The company is most likely using the differentiation strategy. This strategy focuses on offering unique and innovative products or services that set the company apart from its competitors. By targeting a broad market, the company aims to attract a wide range of customers who value the distinctiveness of its offerings. However, this strategy may leave the company susceptible to failure to innovate, as constantly coming up with new and innovative products can be challenging.

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  • 13. 

    A company with a large broad based market uses a strategy that leaves it susceptible to becoming inflexible. Which strategy is the company most likely using?

    • Low-cost leadership

    • Differentiation

    • Focused low-cost leadership

    • A or c

    • None of the above

    Correct Answer
    A. Low-cost leadership
    Explanation
    The company is most likely using a low-cost leadership strategy. This strategy involves offering products or services at a lower cost than competitors while still maintaining acceptable quality. By focusing on cost reduction, the company may become inflexible as it may have limited resources to invest in innovation or adapt to changing market conditions. This strategy is suitable for a broad-based market as it aims to attract a large customer base through lower prices.

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  • Current Version
  • Mar 14, 2024
    Quiz Edited by
    ProProfs Editorial Team
  • Dec 10, 2008
    Quiz Created by
    Mrmbball
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