A. Three areas in the value chain where lower costs can be the basis for competi

Question

A. Three areas in the value chain where lower costs can be the basis for competitive advantage are

1. age of plants and equipment, number of employees, and advertising costs

2. operating activities, functional activities, and number of product lines

3. supplier-related activities, manufacturing-related activities, and distribution-related activities

4. human resource activities, vertical integration activities, and diversification activities

5. variable cost activities, fixed cost activities, and support activities

B. The most important differences among generic competitive strategies of different companies relate to

1. how they go about building a brand image

2. how they cope with the five competitive forces

3. whether they target the market broadly or narrowly and whether they seek competitive advantage based on cost or differentiation

4. the actions they take in order to increase their competitive assets and reduce their competitive capabilities

Explanation / Answer

A. The answer is given below:

5. variable cost activities, fixed cost activities, and support activities

The variable cost activities, fixed cost activities, and support activities are three areas to be considered for more competitive advantage as where the finance plays a major for supporting activities to make the company sustain longer in the market.

B. The answer is given below:

2. how they cope with the five competitive forces

The generic competitive strategies are related to understand on how the company cope up with their five competitive forces such as buyers, suppliers, industry rivalry, entrant and substitutes.

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