Question

1. A Blue Ocean Strategy refers to:

   1. The creation of entirely new industries, or the recreation of existing industries

   2. The creation of new strategic trajectories

   3. All statements are true

   4. All statements are false

2. A firm should exploit its key strengths. This means that a firm should exploit resources and capabilities

   1. Of high strategic importance and for which the firm’s relative strength to competitors is low

   2. Of low strategic importance and for which the firm’s relative strength to competitors is low

   3. Of high strategic importance and for which the firm’s relative strength to competitors is high

   4. Of low strategic importance and for which the firm’s relative strength to competitors is high

3. What are generic strategies according to Michael Porter?

   1. Segment leadership, and global leadership

   2. Cost leadership, benefit leadership

   3. Price leadership, premium leadership

   4. Strategies that can be pursued simultaneously

Answer 1

1. Here, option (b) is the correct answer.

Blue Ocean strategy refers to the creation of new strategic trajectories. It is a simultaneous mix of product differentiation and low cost strategies so as to open up a new market space and create a new demand in the market space. It aims at creating and capturing the uncontested market space which would make the competition irrelevant. It consists of value innovation and four actions framework which consists of raising the factors within the industry, eliminating the irrelevant costs, reduction of certain actions and cost strategies and creation of innovative products.

2. Here, option (c ) is the correct answer.

The firm should exploit its key strength means that the firm should be able to exploit the resources and strategies which are of high strategic importance and its ability when compared with the competitors should be high. This would mean that the firm has a highly strategic policy which would make the firm more competitive in the market and this would help in increasing the position of the firm in comparison to the other competitors in the market

3. Here, option (b) is the more exact answer.

According to Michael porter, the two basic types of competitive advantage combined with the scope of activities would lead to three generic strategies for achieving the above average performance in the industry which are cost leadership, differentiation and focus. A cost leadership would focus on no-frills which means that the non-essential features are avoided so as to keep the prices lower. The differentiation strategy depends on the creation of unique and desirable products and services and the focus would be on offering some specialised services in the market.