Chapter 5 - Product Differentiation

Question 1 of 50

1

________ is a business strategy whereby firms attempt to gain a competitive advantage by increasing the perceived value of their products or services relative to the perceived value of other firms' products or services.

Select one of the following:

Product differentiation
Related diversification
Cost leadership
Best-cost provider

Explanation

Question 2 of 50

1

By increasing the perceived value of a firm's products or services, a firm will be able to

Select one of the following:

charge a lower price than it would otherwise be able to do.
charge a higher price than it would otherwise be able to do.
sell its products at lower prices than firms pursuing a cost-leadership strategy.
gain significantly more market share than firms pursuing a cost-leadership strategy.

Explanation

Question 3 of 50

1

While firms often alter the of their products or services in order to implement a product-differentiation strategy, the existence of product differentiation, in the end, is always a matter of .

Select one of the following:

customer perceptions; objective properties
objective properties; price
customer perceptions; price
objective properties; customer perception

Explanation

Question 4 of 50

1

If an individual is considering purchasing a Toyota Camry or a Ferrari and decides that it is worth paying the extra money for the prestige that is associated with the Ferrari, the additional money the customer is willing to pay for the prestige is known as a(n)

Select one of the following:

altruistic price.
hedonic price.
fair market value.
margin price.

Explanation

Question 5 of 50

1

The most obvious way that firms can try to differentiate their products is by

Select one of the following:

making the product more complex.
introducing the product at the right time.
customizing the product for a particular segment.
altering the features of the products they sell.

Explanation

Question 6 of 50

1

Which of the following bases of product differentiation attempts to create the perception that a firm's products or services are unusually valuable by focusing directly on the attributes of the products or services a firm sells?

Select one of the following:

Product complexity
Product customization
Consumer marketing
Reputation

Explanation

Question 7 of 50

1

The ability of companies that produce complex software packages to tailor these packages to the specific needs of their customers is an example of product differentiation through

Select one of the following:

complexity.
consumer marketing.
product customization.
timing

Explanation

Question 8 of 50

1

A firm's ________ is really no more than a socially complex relationship between a firm and its customers and can serve as a basis for product differentiation.

Select one of the following:

location
reputation
consumer marketing
architectural competence

Explanation

Question 9 of 50

1

In the bicycle industry, the feel of high-end bicycles when they are ridden is important. As a serious rider becomes accustomed to a particular bicycle, it is very difficult for that rider to switch to an alternative supplier. This is an example of product differentiation through which of the following?

Select one of the following:

linkages between functions
product customization
location
product complexity

Explanation

Question 10 of 50

1

Through which bases of competitive advantage do firms attempt to alter the perceptions of current and potential customers, whether or not specific attributes of a firm's products or services are altered?

Select one of the following:

reputation
location
product customization
consumer marketing

Explanation

Question 11 of 50

1

________ is the ability to use organizational structure to facilitate coordination among specific disciplines to conduct research.

Select one of the following:

Architectural competence
Cross-functional linking
Organizational coordination
Managerial leverage

Explanation

Question 12 of 50

1

Which of the following bases of product differentiation attempts to create the perception that a firm's products or services are unusually valuable by focusing on links within and between firms?

Select one of the following:

reputation
product complexity
consumer marketing
product mix

Explanation

Question 13 of 50

1

________ can be can be a source of product differentiation when a single set of customers purchases several of a firm's products.

Select one of the following:

Product placements
Reputation
Product mix
Architectural competence

Explanation

Question 14 of 50

1

Product differentiation is ultimately an expression of the of individuals and groups within firms and is limited only by the that exist, or that can be created, in a particular industry.

Select one of the following:

creativity; resources
resources; opportunities
creativity; opportunities
opportunities; resources

Explanation

Question 15 of 50

1

In general, firms selling differentiated products face a demand curve that is

Select one of the following:

upward sloping.
horizontal.
vertical.
downward sloping.

Explanation

Question 16 of 50

1

According to Chamberlin, firms selling differentiated products and facing a downward sloping demand curve are in an industry described as

Select one of the following:

perfect competition.
monopolistic competition.
oligopolistic competition.
semi-structured competition.

Explanation

Question 17 of 50

1

Which of the following statements regarding the impact of product differentiation on the threat of new entry is accurate?

Select one of the following:

Product differentiation helps reduce the threat of new entry by forcing potential new entrants to absorb costs associated with overcoming incumbent firms' product-differentiation advantages.
Product differentiation increases the threat of new entry by allowing potential new entrants to avoid costs associated with overcoming incumbent firms' product-differentiation advantages.
Product differentiation has no impact on the threat of new entry.
It is not possible to determine the impact of product differentiation on the threat of new entry.

Explanation

Question 18 of 50

1

When considering the impact of product differentiation on the threat of rivalry, product differentiation

Select one of the following:

reduces the threat of rivalry to zero.
increases the threat of rivalry by forcing each firm in an industry to compete directly with one another instead of allowing them to carve out their own unique product niche.
has no impact on the threat of rivalry.
reduces the threat of rivalry because each firm in an industry attempts to carve out its own unique product niche.

Explanation

Question 19 of 50

1

With regard to the threat of suppliers, product differentiation

Select one of the following:

reduces the threat of suppliers because a firm with a highly differentiated product can pass increased costs on to customers.
increases the threat of suppliers because a firm with a highly differentiated product is unable to pass increased costs on to customers.
has no impact on the threat of suppliers.
can either increase or reduce the threat of suppliers.

Explanation

Question 20 of 50

1

In emerging industries

Select one of the following:

firms that are first movers are unlikely to gain product-differentiation advantages based on buyer loyalty and high switching costs.
firms that are first movers can gain product-differentiation advantages based on perceived technological leadership.
product-differentiation efforts are focused on product refinement as a basis of product differentiation.
firms can sometimes be tempted to exaggerate the extent to which they have refined and improved their products and services.

Explanation

Question 21 of 50

1

In a declining industry

Select one of the following:

product-differentiation efforts are focused on product refinement as a basis of product differentiation.
firms that are first movers can gain product-differentiation advantages based on perceived technological leadership.
highly differentiated firms may be able to gain product-differentiation advantages by preempting strategically valuable assets.
highly differentiated firms may be able to discover a viable market niche that will enable them to survive despite the overall decline in the market.

Explanation

Question 22 of 50

1

Which of the following bases of product differentiation is almost always easy to duplicate?

Select one of the following:

product features
product mix
product customization
consumer marketing

Explanation

Question 23 of 50

1

Which of the following bases of product differentiation is usually costly to duplicate?

Select one of the following:

product features
links with other firms
reputation
product mix

Explanation

Question 24 of 50

1

Which of the following bases of product differentiation is by far the most popular way for firms to try to differentiate their products but is identified as almost always being easy to duplicate?

Select one of the following:

product mix
product features
customization
distribution channels

Explanation

Question 25 of 50

1

Product features, by themselves, are

Select one of the following:

usually not a source of temporary competitive advantage, but they can be a source of a sustainable competitive advantage.
usually not a source of either a temporary competitive advantage, or a source of a sustainable competitive advantage.
usually can be a source of both a temporary competitive advantage and a source of a sustainable competitive advantage.
usually not a source of sustained competitive advantage, but they can be a source of a temporary competitive advantage.

Explanation

Question 26 of 50

1

Under which of the following conditions is the product mix advantage as a basis of product differentiation the least difficult to duplicate?

Select one of the following:

when the base of a product mix advantage is a common customer
when the mix of products is highly integrated with each other
if each of the products in a product mix has unique features
if a firm brings a series of products to market

Explanation

Question 27 of 50

1

Research on architectural competence in pharmaceutical firms suggests that

Select one of the following:

not only do some firms possess this competence, but that other firms do not; firms without this competence have, on average, been able develop it with minimal investment.
very few firms possess this competence, but firms without this competence, on average, are able to develop it.
not only do some firms possess this competence, but also that other firms do not and firms without this competence have, on average, been unable to develop it.
virtually every firm possesses this competence to some extent.

Explanation

Question 28 of 50

1

Which of the following bases of product differentiation is generally viewed as the most difficult to duplicate?

Select one of the following:

product features
reputation
linkages with other firms
location

Explanation

Question 29 of 50

1

The U-form structure used to implement a product-differentiation strategy

Select one of the following:

rarely uses temporary cross-divisional and cross-functional teams to manage the development and implementation of new, innovative, and highly differentiated products.
has simple reporting relationships.
often uses temporary cross-divisional and cross-functional teams to manage the development and implementation of new, innovative, and highly differentiated products.
has a small corporate staff.

Explanation

Question 30 of 50

1

A ________ structure exists when individuals in a firm have two or more bosses simultaneously.

Select one of the following:

U-form
multidivisional
cross-divisional
matrix

Explanation

Question 31 of 50

1

The Lockheed Corporation Skunk Works is an example of a(n)

Select one of the following:

cross-divisional or cross-functional team
M-form structure
U-form structure
multidivisional structure

Explanation

Question 32 of 50

1

Ultimately the ________ of a product differentiation strategy depends on the ability of individual firms to be creative in finding new ways to differentiate their products.

Select one of the following:

sustained competitive advantage
rarity
imitation
innovation

Explanation

Question 33 of 50

1

A ________ exists when firms are committed to engage in several related product-differentiation strategies simultaneously.

Select one of the following:

policy of substitution
policy of extrapolation
policy of exploration
policy of experimentation

Explanation

Question 34 of 50

1

In developing a compensation policy used to implement a product-differentiation strategy, firms will

Select one of the following:

hold individuals responsible for experiments that fail.
punish individuals for taking risks when their projects are not successful
simultaneously use multiple dimensions to examine employee performance.
provide appropriate incentives for managers and employees to reduce costs.

Explanation

Question 35 of 50

1

More recent work in the area of strategic management regarding assertions about being stuck in the middle

Select one of the following:

supports the argument that firms that attempt to simultaneously pursue cost leadership and product differentiation will find themselves at a competitive disadvantage.
contradicts the argument and finds that firms that successfully pursue cost leadership and product differentiation simultaneously can often expect to gain a sustained competitive advantage.
partially contradicts the argument and finds that firms that successfully simultaneously pursue cost leadership and product differentiation can only expect to gain a temporary competitive advantage.
partially contradicts the argument and finds that only firms in certain select industries can successfully simultaneously pursue cost leadership and product differentiation and gain a temporary competitive advantage.

Explanation

Question 36 of 50

1

Firms that are stuck in the middle attempt to sell

Select one of the following:

high-priced products and gain small market share.
low-priced products and gain large market share.
high-priced products and gain a large market share.
medium-priced products and gain medium market share.

Explanation

Question 37 of 50

1

While cost leadership requires rewards for cost reduction, product differentiation requires rewards for ________.

Select one of the following:

creative flair
efficiency
quantitative goals
production goals

Explanation

Question 38 of 50

1

Recent research suggests that ________ firms must have competitive levels of cost to survive.

Select one of the following:

low-cost
all
domestic
product-differentiation

Explanation

Question 39 of 50

1

Recent research shows that firms can simultaneously implement cost-leadership and product-differentiation strategies if they learn how to manage the ________ inherent in these two strategies.

Select one of the following:

consistencies
similarities
contradictions
superfluousness

Explanation

Question 40 of 50

1

Cross-functional product development teams are suitable for a firm pursuing a ________ strategy.

Select one of the following:

cost-leadership
confrontation
product-differentiation
stuck-in-the-middle

Explanation

Question 41 of 50

1

Which generic business level strategy is Coach pursuing?

Select one of the following:

cost leadership
related diversification
product differentiation
unrelated diversification

Explanation

Question 42 of 50

1

The price premium that customers are willing to pay for the superior quality and perceived prestige of Coach's products over the prices of similar products are known as

Select one of the following:

marginal prices.
hedonic prices.
heroic prices.
elastic prices.

Explanation

Question 43 of 50

1

Which of the following bases of product differentiation does Coach appear to be employing?

Select one of the following:

product features, product complexity, and consumer marketing
location, linkages between functions, and reputation
reputation, consumer marketing, and product features
distribution channels, service and support, and links with other firms

Explanation

Question 44 of 50

1

Which of the following bases of Coach's competitive advantage is likely to be the most difficult to duplicate?

Select one of the following:

product features
consumer marketing
location
reputation

Explanation

Question 45 of 50

1

Which of the following bases of Coach's competitive advantage is likely to be the easiest to duplicate?

Select one of the following:

product features
consumer marketing
location
reputation

Explanation

Question 46 of 50

1

The business level strategy Coach is pursuing is likely to

Select one of the following:

reduce the threat of rivalry to virtually zero.
increase the threat of substitutes due to premium pricing.
decrease the threat of new entrants due to the additional cost they would face to overcome Coach's reputation advantages.
decrease the threat of buyers since Coach can lower its prices due to its efficient manufacturing operations.

Explanation

Question 47 of 50

1

Given that the leather handbag market that Coach largely competes in can be considered a mature market, Coach should focus its product-differentiation efforts on

Select one of the following:

exploiting a first-mover advantage as a basis of product differentiation.
introducing radically new technologies as a basis of product differentiation.
seeking a viable market niche that will enable it to survive.
refining products as a basis of product differentiation.

Explanation

Question 48 of 50

1

Coach's agreement with Lexus to produce automobiles with Coach leather interior is an example of

Select one of the following:

cooperative strategic alliance.
architectural competence.
skunk works.
product placement.

Explanation

Question 49 of 50

1

If Coach had an organizational structure that used cross-functional teams, the members of which reported not only to their functional boss (i.e. the head of production) but also to the head of the team, Coach could be said to be using which organizational structure?

	Created by Strategy IO over 7 years ago

Quiz on Chapter 5 - Product Differentiation, created by Strategy IO on 29/12/2016.

Chapter 5 - Product Differentiation

Chapter 5 - Product Differentiation

Question 1 of 50

________ is a business strategy whereby firms attempt to gain a competitive advantage by increasing the perceived value of their products or services relative to the perceived value of other firms' products or services.

Select one of the following:

Explanation

Question 2 of 50

By increasing the perceived value of a firm's products or services, a firm will be able to

Select one of the following:

Explanation

Question 3 of 50

While firms often alter the ________ of their products or services in order to implement a product-differentiation strategy, the existence of product differentiation, in the end, is always a matter of ________.

Select one of the following:

Explanation

Question 4 of 50

If an individual is considering purchasing a Toyota Camry or a Ferrari and decides that it is worth paying the extra money for the prestige that is associated with the Ferrari, the additional money the customer is willing to pay for the prestige is known as a(n)

Select one of the following:

Explanation

Question 5 of 50

The most obvious way that firms can try to differentiate their products is by

Select one of the following:

Explanation

Question 6 of 50

Which of the following bases of product differentiation attempts to create the perception that a firm's products or services are unusually valuable by focusing directly on the attributes of the products or services a firm sells?

Select one of the following:

Explanation

Question 7 of 50

The ability of companies that produce complex software packages to tailor these packages to the specific needs of their customers is an example of product differentiation through

Select one of the following:

Explanation

Question 8 of 50

A firm's ________ is really no more than a socially complex relationship between a firm and its customers and can serve as a basis for product differentiation.

Select one of the following:

Explanation

Question 9 of 50

Select one of the following:

Explanation

Question 10 of 50

Through which bases of competitive advantage do firms attempt to alter the perceptions of current and potential customers, whether or not specific attributes of a firm's products or services are altered?

Select one of the following:

Explanation

Question 11 of 50

________ is the ability to use organizational structure to facilitate coordination among specific disciplines to conduct research.

Select one of the following:

Explanation

Question 12 of 50

Which of the following bases of product differentiation attempts to create the perception that a firm's products or services are unusually valuable by focusing on links within and between firms?

Select one of the following:

Explanation

Question 13 of 50

________ can be can be a source of product differentiation when a single set of customers purchases several of a firm's products.

Select one of the following:

Explanation

Question 14 of 50

Product differentiation is ultimately an expression of the ________ of individuals and groups within firms and is limited only by the ________ that exist, or that can be created, in a particular industry.

Select one of the following:

Explanation

Question 15 of 50

In general, firms selling differentiated products face a demand curve that is

Select one of the following:

Explanation

Question 16 of 50

According to Chamberlin, firms selling differentiated products and facing a downward sloping demand curve are in an industry described as

Select one of the following:

Explanation

Question 17 of 50

Which of the following statements regarding the impact of product differentiation on the threat of new entry is accurate?

Select one of the following:

Explanation

Question 18 of 50

When considering the impact of product differentiation on the threat of rivalry, product differentiation

Select one of the following:

Explanation

Question 19 of 50

With regard to the threat of suppliers, product differentiation

Select one of the following:

Explanation

Question 20 of 50

In emerging industries

While firms often alter the of their products or services in order to implement a product-differentiation strategy, the existence of product differentiation, in the end, is always a matter of .

Product differentiation is ultimately an expression of the of individuals and groups within firms and is limited only by the that exist, or that can be created, in a particular industry.