1．A firm can pursue cost leadership and differentiation strategies simultaneously when:

A)   the firm is stuck in the middle and the condition is long term.

B)   there are no economies of scale and the firm is operating in the rising portion of its total average cost curve.

C)   the firm has a very strong management team with a great deal of experience.

D)   the firm's costs are strongly affected by market share or it pioneers a major innovation.

2．Sustainability of a competitive advantage is NOT challenged by:

A)   potential imitators and changes in technology.

B)   potential imitators and changes in demand characteristics of buyers.

C)   changes in technology and changes in demand characteristics of buyers.

D)   increase in the price of substitute products.

答案和详解如下：

1．A firm can pursue cost leadership and differentiation strategies simultaneously when:

A)   the firm is stuck in the middle and the condition is long term.

B)   there are no economies of scale and the firm is operating in the rising portion of its total average cost curve.

C)   the firm has a very strong management team with a great deal of experience.

D)   the firm's costs are strongly affected by market share or it pioneers a major innovation.

The correct answer was D)

Greater market share translates into greater sales volume, and the firm can exploit economies of scale to become a cost leader while new innovations can afford it monopoly power and make product differentiation possible.

2．Sustainability of a competitive advantage is NOT challenged by:

A)   potential imitators and changes in technology.

B)   potential imitators and changes in demand characteristics of buyers.

C)   changes in technology and changes in demand characteristics of buyers.

D)   increase in the price of substitute products.

The correct answer was D)

Increase in the price of substitute goods will increase demand for the product in question and will not challenge its competitive advantage.