Question 1

0 out of 0 points

Cost leadership and product differentiation are so widely recognized that they are
often called generic business strategies.
Selected Answer:
Answers:

True
True
False

Question 2
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A firm that chooses a cost-leadership business strategy focuses on gaining

advantages by reducing its costs to a level equal to all of its competitors.
Selected Answer:
Answers:

True
True
False

Question 3
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Economies of scale are said to exist when the increase in firm size (measured in
terms of volume of production) are associated with lower costs (measured in terms of
average costs per unit of production).
Selected Answer:
Answers:

False
True
False

Question 4
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When a firm has high levels of production, it is often able to purchase and use
specialized manufacturing tools that cannot be kept in operation in small firms.
Selected Answer:
Answers:

True
True
False

Question 5

0 out of 0 points

Differential low-cost access to productive inputs may create cost differences among
firms producing similar products in an industry.
Selected Answer:

True

Answers:

True
False

Question 6
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Efforts to move down the learning curve quickly by acquiring market share are likely
to obtain a cost advantage over rivals.
Selected Answer:

True

Answers:

True
False

Question 7
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A cost-leadership competitive strategy can reduce both the threat of substitutes and
the threat of suppliers that a firm may face.
Selected Answer:

True

Answers:

True
False

Question 8
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Given the relatively low margins of firms pursuing a cost-leadership strategy, firms
pursuing this strategy are especially vulnerable to buyers having their revenues
reduced to a point where they are unable to earn normal or above-normal
performance.
Selected Answer:

True
True

Answers:

False

Question 9
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Actions that firms take to gain competitive advantage in a single market or industry
are known as
Selected Answer:

business-level strategies.

Answers:

business-level strategies.

corporate-level strategies.
functional-level strategies.

macro-level strategies.

Question 10
0 out of 0 points

Cost-leadership and product-differentiation strategies are so widely recognized that

they are often called
Selected Answer:

common business strategies.

Answers:

common business strategies.

generic corporate strategies

generic business strategies.

common corporate strategies.

Question 11
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A firm that chooses a ________ focuses on gaining advantages by reducing its cost
below all of its competitors.
Selected Answer:

cost-leadership business strategy

Answers:

diversification strategy

product-differentiation business strategy

corporate strategy

cost-leadership business strategy

Question 12
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The best example of a firm following a cost-leadership business strategy is

Selected Answer:

Rolex
Answers:

Mercedes Benz.
Macy's.
Rolex
SouthWest Airline

Question 13
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________ are said to exist when the increase in firm size (measured in terms of
volume of production) are associated with lower costs (measured in terms of average
costs per unit of production).
Selected Answer:

Sustainable competitive advantages

Answers:

Sustainable competitive advantages

Economies of scale
Temporary competitive advantages

Economies of scope

Question 14
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Which of the following statements is accurate?

Selected
Answer:

Answers:

Cost leaders are especially vulnerable to substitute products.

A cost-leadership competitive strategy increases the threat of new
entrants by lowering cost-based barriers to entry.

Firms with a low-cost position can reduce the threat of rivalry in an

industry.

Cost leaders are especially vulnerable to substitute products.

Cost leaders are especially vulnerable to the threat of suppliers.

Question 15
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When a firm gets more efficient at a process with expeirence, it is called as ______________
Selected Answer:

None of the above

Answers:

Learning curve economies

Economies of scale
Economies of scope
None of the above

Question 16
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In 1979, SouthWest Airline offered self-ticketing machine to speed up the service.

Selected Answer:

True

Answers:

True
False

Question 17
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Southwest Airline had the lowest cost per mile of any U.S. airline.
Selected Answer:
Answers:

[None Given]
True
False

Question 18
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Inspired by studying pit crews at the Indianapolis 500, Southwest had an average
turnaround time of 24 minutes, which was 30 minutes faster than other US-based
airlines.
Selected Answer:
Answers:

[None Given]
True
False

Question 19
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All fares of Southwest corresponded to the same class: ECONOMY

Selected Answer:
Answers:

False
True
False

Question 20
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Southwest's two major cost components were its (1) salaries/wages/benefits and (2) its
fuel.
Selected Answer:
Answers:

True
True
False

Question 21
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Southwest was often credited with hedging fuel costs by managing financial instruments
better than many other airlines
Selected Answer:
Answers:

False
True
False

Question 22

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Besides the major airports, Southwest served secondary or downtown airports becasue
these were less congested and were often more convenient and cheaper for passangers.
Selected Answer:
Answers:

True
True
False

Question 23
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More than half of Southwest's passenger revenues were generated through its website.
Selected Answer:
Answers:

True
True
False

Question 24
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Many observers believed that Southwests in-flight experience was one of the features
that set it apart from other airline. Southwests management encouraged in-flight
attendants to sing out announcements or to add humor.
Selected Answer:
Answers:

False
True
False

Question 25
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