Lesson 3.8.2

3.8.2 Strategic positioning: choosing how to compete Quiz: AQA Business, Unit 8

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 3.8.2, Strategic positioning: choosing how to compete: 20 multiple choice questions for the AQA Business (7132), Unit 8: Choosing strategic direction, written with Revision Ninja.

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The 20 questions

  1. In Porter's generic strategies, what strategy focuses on becoming the lowest-cost producer industry-wide?

    • Cost leadership
    • Cost focus
    • Differentiation
    • Differentiation focus

  2. In Porter's generic strategies, offering unique features that allow charging a premium price is called what?

    • Cost focus
    • Differentiation
    • Market penetration
    • Cost leadership

  3. A strategy targeting a narrow market niche using low costs or unique features is called what?

    • Market penetration
    • Focus strategy
    • Cost leadership
    • Differentiation

  4. Which generic strategy allows a business to maintain profit margins while offering competitive prices?

    • Differentiation
    • Differentiation focus
    • Market development
    • Cost leadership

  5. What is a primary benefit of achieving a successful differentiation strategy?

    • Price inelasticity
    • Low production costs
    • Economies of scale
    • High volume sales

  6. Offering unique high-quality features to justify premium prices is an example of which generic strategy?

    • Diversification
    • Cost leadership
    • Differentiation
    • Cost focus

  7. Stripping out non-essential operational costs to offer the lowest prices in an industry is what?

    • Differentiation focus
    • Product development
    • Cost leadership
    • Differentiation

  8. Which market segment does a business target when adopting a focus strategy?

    • The mass market
    • The entire industry
    • A narrow niche
    • Multiple broad segments

  9. A firm sells a product at 12 pounds, with unit cost of 8 pounds, and sells 50,000 units. What is the total contribution?

    • 200,000 pounds
    • 600,000 pounds
    • 400,000 pounds
    • 100,000 pounds

  10. A cost leader has unit cost of 6 pounds, sells at 8 pounds and sells 100,000 units. What is the total profit before fixed costs?

    • 600,000 pounds
    • 200,000 pounds
    • 100,000 pounds
    • 800,000 pounds

  11. A product sells for 20 pounds and costs 15 pounds per unit to make. What is the gross margin as a percentage of price?

    • 75%
    • 33%
    • 5%
    • 25%

  12. What is a major difficulty in maintaining a competitive advantage over time?

    • Higher profit margins
    • Decreased total revenue
    • Lower entry barriers
    • Competitor imitation

  13. What main benefit does a sustainable competitive advantage provide to a firm?

    • Higher profit margins
    • Higher interest rates
    • Reduced total assets
    • Lower employee turnover

  14. What is a key risk associated with pursuing a cost leadership strategy?

    • Brand image dilution
    • Price wars
    • Excessive product features
    • High brand loyalty

  15. What is a major risk when implementing a differentiation strategy?

    • Shorter lead times
    • Economies of scale
    • Reduced market share
    • Higher production costs

  16. What is the main risk for a business adopting a focus strategy?

    • High wage bills
    • Small market size
    • Diseconomies of scale
    • Excessive product range

  17. Strategic positioning aims to align internal capabilities with which external factor?

    • Customer needs
    • Interest rates
    • Government regulations
    • Exchange rates

  18. How can a business protect profit margins without cutting prices against rivals?

    • Reduce advertising spend
    • Increase product differentiation
    • Lower product quality
    • Increase output volume

  19. Which strategy is most suitable for a business operating in a price-sensitive market?

    • Cost leadership
    • Premium differentiation
    • Strategic retrenchment
    • Focused differentiation

  20. Which pricing strategy is typical for a business competing on benefits rather than price?

    • Penetration pricing
    • Discount pricing
    • Premium pricing
    • Loss leader pricing

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