Chapter 05
Business-Level Strategy: Creating and Sustaining Competitive Advantages
True / False Questions
1.A business-level strategy is a strategy designed for a multi-business company that competes across multiple
businesses.
True False
2.The three generic strategies that Michael Porter believes a firm can use to overcome the five forces and
achieve competitive advantage include overall price leadership.
True False
3.Concentrating solely on one form of competitive advantage generally leads to the highest possible level of
profitability.
True False
4.A firm striving for cost leadership will typically spend relatively more on product-related research and
development than on process-related research and development.
True False
5.To generate above average returns, a firm following an overall cost leadership position should not be
concerned with attaining parity or proximity on the basis of differentiation relative to its peers.
True False
6.The experience curve concept suggests that production costs tend to decrease as production increases.
True False
7.A firm can attain an overall cost leadership position by increasing the management layers in order to reduce
overhead costs.
True False
8.A firm can attain an overall cost leadership position by using automated technology to reduce scrappage
rates.
True False
5-1
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.