Reading 41: Competitive Strategy: The Core Concepts - LOS

答案和详解如下：

1．All of the following may create competitive advantage EXCEPT:

A)   monopoly power.

B)   patents.

C)   special access to raw materials.

D)   special access to technology.

The correct answer was A)

If a firm has monopoly power, it doesn’t need competitive advantage. There would be no competition. Patents and special access to raw materials and technology can help create competitive advantage.

2．Which of the following statements is FALSE regarding cost leadership?

A)   Cost leadership requires that a firm achieve the lowest production costs and not be one of several firms trying to be the cost leader.

B)   Cost leaders will be above average performers if their products are priced at or just below the industry average.

C)   The cost leader's product must not be too different from its competitors.

D)   Cost leadership requires that a firm achieve the lowest production costs and be one of several firms trying to be the cost leader.

The correct answer was D)

Cost leadership requires that a firm achieve the lowest production costs and not be one of several firms trying to be the cost leader. If there is more than one competitor trying to be the cost leader, competition will be fierce (remember the fast food price wars).

3．Which of the following statements regarding cost leadership is FALSE?

A)   Cost leaders will be above average industry performers if they price their products above the industry average.

B)   Cost leaders will be above average industry performers if they price their products at or just below the industry average.

C)   The cost leader's product must not be too different from that of its competitors.

D)   Cost leadership requires that the firm achieve the lowest production cost.

The correct answer was A)

The price of the cost leader’s products must be at or slightly below the industry average.

4．Differentiation focus:

A)   is possible only in markets where buyers use the same product for multiple or different uses.

B)   is achieved in a segment of the target market which has a unique aspect.

C)   cannot be implemented in a narrow sub-sector of the market.

D)   can be implemented only in competitive markets where every firm makes zero economic profit and faces a horizontal demand curve.

The correct answer was B)

Differentiation focus relates to products and is used to gain a competitive advantage. It is usually implemented in a narrow sub-sector of the market that possesses a unique aspect, which can be exploited for higher profits.

5．According to Porter, which of the following are two important competitive strategies?

A)   Low cost leadership, barrier to entry.

B)   Differentiation, monopolistic.

C)   Low cost leadership, differentiation.

D)   New entrant deterrent, differentiation.

The correct answer was C)

By definition.