Question 1

Product differentiation helps reduce the threat of new entry by forcing potential entrants to an industry to absorb not only the standard costs of beginning business but also the additional costs associated with overcoming incumbent firms' product-differentiation advantages.

Accepted Answer

A) True 
 B)False

Question 2

Firms that pursue a product-differentiation strategy can choose whether or not they want to reveal this strategic choice to their competition by adjusting their prices.

Accepted Answer

A) True 
 B)False

Question 3

In emerging industries

Accepted Answer

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

Question 4

Products can be differentiated by the extent to which they are customized for particular customer applications.

Accepted Answer

A) True 
 B)False

Question 5

One feature of Coach's compensation policies is likely to be

Accepted Answer

A)   rewards for cost reduction.
B)   rewards for efficiency.
C)   rewards for creative flair.
D)   rewards for manufacturing efficiency.E) All of the above
F) A) and C)

Question 6

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

Accepted Answer

A)   low-cost
B)   all
C)   domestic
D)   product-differentiationE) All of the above
F) B) and D)

Question 7

More recent work contradicts Porter's assertion about being "stuck in the middle" and suggests that firms that are successful in both cost leadership and product differentiation often can expect to gain a sustained competitive advantage.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A)   Product features
B)   Consumer marketing
C)   Location
D)   ReputationE) A) and D)
F) A) and C)

Question 9

Chryslers' introduction of the "cab forward" design was an attempt at differentiation through product features.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A)   Product features
B)   Links with other firms
C)   Reputation
D)   Product mixE) A) and B)
F) A) and C)

Question 11

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?

Accepted Answer

A)   Reputation
B)   Product complexity
C)   Consumer marketing
D)   Product mixE) B) and D)
F) None of the above

Question 12

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

Accepted Answer

A)   reduces the threat of rivalry to zero.
B)   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.
C)   has no impact on the threat of rivalry.
D)   reduces the threat of rivalry because each firm in an industry attempts to carve out its own unique product niche.E) A) and B)
F) A) and C)

Question 13

In emerging industries,product-differentiation efforts often focus on product refinement as a basis for product differentiation.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A)   co-branding.
B)   architectural competence.
C)   skunk works.
D)   product placement.E) B) and C)
F) B) and D)

Question 15

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

Accepted Answer

A)   policy of substitution
B)   policy of extrapolation
C)   policy of exploration
D)   policy of experimentationE) B) and D)
F) B) and C)

Question 16

The physical location of a firm cannot be a source of product differentiation.

Accepted Answer

A) True 
 B)False

Question 17

The concept of product differentiation generally assumes that the number of firms that have been able to differentiate their products in a particular way is,at some point in time,less than the number of firms needed to generate perfect competition dynamics.

Accepted Answer

A) True 
 B)False

Question 18

The ability to use organization structure to facilitate coordination among scientific disciplines to conduct research is known as architectural competence.

Accepted Answer

A) True 
 B)False

Question 19

In a declining industry

Accepted Answer

A)   product-differentiation efforts are focused on product refinement as a basis of product differentiation.
B)   firms that are first movers can gain product-differentiation advantages based on perceived technological leadership.
C)   highly differentiated firms may be able to gain product-differentiation advantages by preempting strategically valuable assets.
D)   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.E) A) and B)
F) A) and C)

Question 20

Product differentiation can lead to high market share and low costs.

Accepted Answer

A) True 
 B)False

Exam 5: Product Differentiation

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?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In emerging industries,product-differentiation efforts often focus on product refinement as a basis for product differentiation.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In a declining industry

Correct AnswerverifiedShow Answer

Product differentiation can lead to high market share and low costs.

Correct AnswerverifiedShow Answer

Chryslers' introduction of the "cab forward" design was an attempt at differentiation through product features.

Correct AnswerverifiedShow Answer

Products can be differentiated by the extent to which they are customized for particular customer applications.

Correct AnswerverifiedShow Answer

The physical location of a firm cannot be a source of product differentiation.

Correct AnswerverifiedShow Answer

In emerging industries

Correct AnswerverifiedShow Answer

The concept of product differentiation generally assumes that the number of firms that have been able to differentiate their products in a particular way is,at some point in time,less than the number of firms needed to generate perfect competition dynamics.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The ability to use organization structure to facilitate coordination among scientific disciplines to conduct research is known as architectural competence.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

One feature of Coach's compensation policies is likely to be

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

More recent work contradicts Porter's assertion about being "stuck in the middle" and suggests that firms that are successful in both cost leadership and product differentiation often can expect to gain a sustained competitive advantage.

Correct AnswerverifiedShow Answer

Firms that pursue a product-differentiation strategy can choose whether or not they want to reveal this strategic choice to their competition by adjusting their prices.

Correct AnswerverifiedShow Answer

Product differentiation helps reduce the threat of new entry by forcing potential entrants to an industry to absorb not only the standard costs of beginning business but also the additional costs associated with overcoming incumbent firms' product-differentiation advantages.

Correct AnswerverifiedShow Answer

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