1. In order for a firm to formulate an effective business-level strategy, it is important to remember that competitive advantage is determined by A) The characteristics of both the internal and the external environment of the firm. B) The characteristics of the firm alone. C) The characteristics of the industry in which a firm competes. D) The amount of market share a firm can gain. 2. Bigger & Better Inc. is a big box retailer who is in direct competition with Walmart and Target. Bigger & Better Inc. initially tried to respond to Walmart by cutting its prices and reducing costs. Walmart has greater buying power and a more efficient supply chain; therefore, Bigger & Better Inc. was not able to compete on costs. The company then tried to differentiate itself by signing a celebrity to create an in-house line of clothing. However, Target has a celebrity clothing line that has a more differentiated appeal. The economic value created by Bigger & Better Inc. is currently less than Target and Walmart. It can be said that A) Bigger & Better Inc. is successful in creating an integration strategy positioned between Walmart and Target. B) Bigger & Better Inc. is "stuck in the middle" and has a competitive disadvantage. C) Bigger & Better Inc. is still creating an integration strategy positioned between Walmart and Target and is on the right track. It should continue this business strategy. D) Bigger & Better Inc. is "stuck in the middle" and has a competitive advantage. 3. Bath & Chill is a spa that caters to the needs of a small percentage of highly health-conscious consumers. It offers state-of-the-art treatments in a luxurious setting. Since there are very few spas that offer the same unique services, customers are willing to pay a premium price for its products and services. In this scenario, Bath & Chill is following a A) Product diversification strategy. B) Liquidation strategy. C) Broad differentiation strategy. D) Focused differentiation strategy