I hate the competitive strategy questions. Belle cuisine is a higher quality producer and is no doubt attempting to differentiate, yet they sell to private hospitals, which i took to mean that this was a focus. And hence the answer is just that they differentiate?? Anyone care to expound on this one? Thanks
Brutal.
I thought that one definitely should have been differentiation focus… The even called it a niche market, which is a flashing red light for a focus strategy. ?
Yeah, crap like this is going to make me a better analyst. Please.
This is exactly what I was saying earlier. its shite like this that makes me question the ‘integrity’ of CFAi…
Agree with all of you 100%. I almost threw my laptop out of the window after I saw the answer to that question. The Mock #1 to me has to many obscurities, too little testing on whether you can actually analyze a company/industry/whatever. IMO, the CFA exam has to much of an element of luck in it. 40,000 people take the exam, you’re gonna have a sufficient amount of outliers in that size population, so enough people pass each year. Perhaps not all deserving… With that said, good ‘luck’ to all AFers. C.
Questions like this make me wish it was an essay test. I will tell you all you need to know about Porter and focus and such, but don’t give me cryptic info and then at the end I end up closing my eyes and picking the alleged best answer - which ends up being wrong. Time for lunch. Go to lunch. Would you please go to lunch. (A little Glengarry for ya)
This question drove me up the f’ing wall. Actually, the question was fine. It was the answer that drove me up the wall. I mean they called it a NICHE market, and explained it was just private hospitals? Might as well said it was private hospitals that start with the letter “M” and have a guy with red hair as chief of staff. How much more focus can you get? Grrrr.
Maybe its an error. Competitive strategy is the one subject that its authors would very likely flunk. I have no idea why they love that stuff so much.
Michael Porter plays GTA all day in his mom’s basement…GUARANTEED!
I missed whether the application software question was an attractive industry. I forget what I put. The explanation doesn’t help me much. Is it an attractive industry or not.
Not that there’s anything wrong with that. And that shit was focused, the question took me 10 mins and came down to a coin flip, the coin flip said focused differentiation.
not attractive
not a coin toss at all – it was CLEARLY diff focus…they even said ‘focus’ and ‘niche’…WTF???
There’s nothing you can do for these questions.
There are cople of questions similar to this in Mock 2. Answers are confusing.
given the obscurity of the answer key, (ie no answers) I’m not convinced that “differentiation focus” was wrong. The answer just says they were “differentiating” with a niche market. Assumed that was code for diff focus. call me crazy. Is there anyone out there who wants to defend “differentiation” as an answer?
I remember this question and answer irritating me greatly. I rationalized the CFA answer of “differentiation” in that the industry itself was a niche industry, and they were differentiating within that industry; they even had competitors doing the same thing. Whereas if they were “differentiation focus” their niche would have been a subset of the larger industry. But, who knows. When I get 4/6 of these questions correct, I’m happy.
not disagreeing with anything above. and for disclosure purposes, i also put in focused differentiation. CFAI text page 177 v4 “focus strategy has two variants. In cost focus a firm seeks a cost advantage in its target segment, while in a differentiation focus a firm seeks differentiation in its target segment. Both variants of the focus strategy rest on differences between a focuser’s target segments and other segments in the industry” the key question here - was the intention of Belle Cuisine to focus on the hospital segment to the exclusion of others, or was it that their top 4 customers happened to be hospitals? i dont have the Q in front of me and i don’t remember the fact pattern, but i could see how the answer could be differentiation if Belle Cuisine did NOT choose to serve the hospital segment to the exclusion of others (the def. of focus). in any event, its all gray area, and difficult.