MGT 4800J Ch1-Ch5 – Flashcards
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Which of these could be a definition of strategic competitiveness?
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b. The ability of a firm to outperform its rivals by forming and executing a strategy that creates value for its stakeholders.
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The strategic management process is
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a. the way that businesses formulate initiatives that will create superior value for customers and then implement them to out-perform competitors.
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Which of these describes a company that has delivered above-average returns to its investors?
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b. A tool manufacturer that announced it will increase its dividend payment - the highest dividend amongst all of its industry competitors - for the upcoming quarter due to market share gains in overseas markets.
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Hypercompetition describes a competitive landscape where:
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b. the industry is constantly changing with global competition and innovative competitors.
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Michael is the CEO of a manufacturer with plants in three countries. He currently has a product line that is manufactured only in the company's U.S. plant. That product has experienced a steady increase in its export sales to Europe over the last three years. The international sales director is recommending that the company expand manufacturing capabilities at the European plant to include this product line. Michael and his management team must consider whether to pursue this strategy. This is:
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. a decision that would benefit from using the entire strategic management process.
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Which of these is an example of a disruptive technology?
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b. The introduction of Global Positioning System (GPS) technology, which is used in standalone and hand-held navigation tools, smartphone apps, and in-car navigation systems
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Companies must be aware of technological advances within their industry and make strategic management decisions that take into account perpetual innovation and disruptive technologies. Which of these is an example of a company that did not respond strategically to technological changes?
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c. Kodak revolutionized the automatic snapshot camera more than 100 years ago, making photography accessible to everyone. When innovators brought digital cameras to the marketplace, Kodak focused on making it easy for people to print their photos using this technology.
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The industrial organization (I/O) model of above-average returns:
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a. puts emphasis on the external environment, which plays a role in determining a company's ability to achieve above-average returns.
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Which of these represents a criticism of the industrial organization (I/O) model of above-average returns?
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b. The model assumes that most firms operating in an industry have similar valuable resources that are mobile across companies, which is not necessarily true.
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Which of these is an example of the mobility of strategies and resources across firms in the mobile network industry, one of the assumptions of the industrial organization (I/O) model of above-average returns?
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d. The spread of 4G technology between Verizon, AT&T, and Sprint, so that the high-speed network is available to nearly all mobile phone customers.
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A multi-divisional corporation that manufactures large steel tanks is considering starting a new business unit to serve the transportation industry. The company is utilizing the I/O model to develop its strategy. Which of these decisions is consistent with this model?
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c. The company's research into a new railcar guideline that requires all tanker cars to be replaced or retrofitted over the next five years leads its leaders to start a business that manufactures tanker cars to capitalize on the new demand.
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In the resource-based model of above-average returns, differences in company performance can be attributed to:
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b. the unique capabilities and resources of the company.
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In the resource-based model of above-average returns, a core competency is
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d. something that gives a company an edge over the competition, something that the company possesses that its competitors do not have, and something that is too difficult or costly for competitors to copy or produce an alternative.
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A local community arts nonprofit organization is seeking to expand its programming and is considering putting just one new program in place this year. It may choose painting workshops, youth summer camps, a musical performing arts series or classes for seniors. The organization's most committed volunteer is a kindergarten art teacher who has offered to be the leader of whichever new program the organization implements. If the nonprofit is utilizing the resource-based model of above-average returns, it should expand its programming in the following way:
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b. Youth summer camps because the organization should use the knowledge of its passionate volunteer to their greatest advantage
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Which of these represents a core competency for Alibaba as presented in the opening case in the chapter?
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. The company's diversification of web services tailored to the Chinese market directly, which has resulted in transactions that account for more than 2 percent of China's GDP.
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A mission statement can describe:
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b. what the company does in terms of its customers and their needs and what core competencies it utilizes to meet those needs.
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Below are several statements from companies. Which of these is a vision statement?
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c. Habitat for Humanity: A world where everyone has a decent place to live.
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A vision statement differs from a mission statement in that it:
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c. speaks in broad terms of what the company ultimately would like to achieve.
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Every organization has groups of people that it must establish and manage relationships with to be successful. These groups include:
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d. All of these
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Which of these represents a product market stakeholder:
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b. A local pipefitters union dealing with a plumbing contractor
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Capital market stakeholders are most satisfied when:
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a. a company's returns align with the amount of risk they incurred by investing in a company or lending the company money.
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Product market stakeholders often have very different priorities, but each can exert power and influence over a company. Which of these correctly describes a way that a product market stakeholder exerted its power to the potential detriment of a company?
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a. Protesters swarmed and picketed Hobby Lobby after it won a U.S. Supreme Court decision allowing it an exemption from covering employees' contraceptives on religious grounds.
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Organizational culture is:
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a. the complex set of ideologies, symbols and core values that are shared throughout a firm that influence how the firm conducts business.
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Strategic leaders:
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c. promote exploratory and exploitative learning as well as innovation.
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Logan is an entrepreneur and president of his own company with a new software product that manages benefits administration for large multinational corporations. His start-up company grew quickly to a team of about 25. A new federal law recently passed by Congress will cause small business owners to invest in software like his to manage employee healthcare. Logan announces that the company will be investing in training for employees to better understand small business owners and research and development to create a small business version of the software. This is an example of:
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a. promoting exploratory and exploitative learning as well as innovation as a strategic leader.
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Christopher is the CEO of a company. Recently, he scheduled a meeting with a challenging objective - to discuss with a team of his employees a project that is failing. It is costing a lot of investment in time and money and does not appear to have any return on investment in sight. Which of these approaches would demonstrate successful strategic leadership?
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d. He should start by thanking the team for their hard work on the project so far but explain the company is no longer pursuing it. He should clearly articulate his vision for the future of the company and the team and set a meeting to debrief on the project.
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Firms use the strategic management process to:
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d. meet the needs of its stakeholders and achieve financial goals.
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According to Hitt et al., which of these would be considered an important step in the ASP strategic management process?
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d. Defining the company's corporate mission and major corporate goals
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Marquis is the international operations manager for an athletic clothing line. As part of his responsibilities, he regularly tours the factories of the company's suppliers. He recently took a tour of one of the most efficient plants that delivers low-cost clothing. This gives his company a greater profit margin. However, on the tour, he noticed an 8-year-old child operating one of the machines. Which of these best describes how Marquis should report back to his CEO about the plant tour?
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b. Marquis should bring this issue to the attention of the CEO and other top leadership immediately. He has a personal, ethical objection to child labor and believes that it is also inconsistent with the company's core values.
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Which of these could be a part of the analysis stage of the strategic management process?
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b. A review of a company's competitive landscape, identifying competitors, naming their differentiations and detailing a profile of those competitors' customers
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What is the set of factors that directly influences a firm and its competitive actions and responses within the industry?
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b. not all strategies will work for all firms; successful strategies must be aligned with a company's strengths.
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A telecommunications company is impacted by government regulations of the wireless spectrum, cell tower locations, and internet accessibility. The company decides to hire a lobbying firm to represent its interests with the U.S. government, specifically the FCC, FTC, and Congress. This is an example of a company managing which forces in the macroenvironment?
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b. Political and legal forces
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General Electric, the multinational conglomerate, is researching rivals in the appliance industry by analyzing the financials, current product offerings, and strategies of competitors in order to gain insight on how to act to gain a competitive advantage. What is GE performing?
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a. Competitor analysis
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In an external analysis, there are two important elements that need to be identified. What are those two elements?
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d. Opportunities and threats
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In 2011, Apple and Samsung were in a legal battle over patenting. Apple and Samsung were mutually accusing each other of infringing on intellectual property and each took action legally. Why would both parties want to spend the time and resources to reclaim their intellectual property?
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c. To neutralize a threat that will hinder strategic competitiveness
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P&G is a consumer products company that is consistently implementing scanning systems of the environment. They want to identify early signals of environmental changes and trends. P&G's competitors also frequently utilize scanning systems but are not as competitive as P&G. What could be the reason for P&G's competitiveness?
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a. P&G's ability to take action on ambiguous, incomplete, or unconnected data
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Car manufacturers have a large lead time on new products. If an idea for a feature on a vehicle is developed, it will likely be two years before consumers know about it and can decide if they want to buy it. Consumer trends are sometimes short lived as they are always evolving. Which external analysis element is a primary focus of car manufacturers?
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d. Assessing
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The five competitive forces includes all of the following forces that shape competition within an industry except:
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c. rate of innovation and change.
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What is the term that is concerned with a population's size, age structure, geographic distribution, ethnic mix, and income distribution?
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b. Demographic segment
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Cisco is a technology company looking to diversify its portfolio and compete in a new market. After conducting a scan and forecast, the consultants hired by Cisco provided several options. In which of the following economic segments should Cisco seek to compete?
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d. A relatively stable economy with strong growth potential
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Many large corporations have a presence in Washington in the form of lobbyists. These individuals attempt to have their voice, and the voice of the company they represent, heard. If there is a potential advantage to be had due to new legislation or implementation/abolition of laws and rules, it is the lobbyists' duty to ensure it is in their company's favor. Which segment is this process referring to?
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b. Political/legal segment
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An industrial tool manufacturer relies on a particular distributor network. This distributor network has the largest online outlet and store network, and its product lines are aimed at construction workers. The distributor network is seeking a manufacturer to provide it with private label products, as it has decided to offer only its own product line in this category of industrial tools. Now, the industrial tool company must decide whether to agree to this proposition or lose this network as a customer. This is an example of which of the competitive forces at play in this industry?
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d. Bargaining power of buyers
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Potential competitors may enter an industry and begin to take market share from existing companies. What would be one of the largest challenges a new entrant would need to overcome to be successful when entering an industry?
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c. Production costs are high and require high volumes to achieve profitability
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Through research and development, a cable company has found a way to use its existing network lines to serve customers with a new product offering - home security systems. The company is offering the service with a lower monthly fee than most other security companies. However, the sales force didn't see a lot of interest among its customers who had an existing security system from a competitor until they ran a promotion for reduced prices on equipment and free installation. Which of the competitive forces is at play?
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c. Customer switching costs
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Suppliers are most powerful when a company:
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b. would have switching costs if it went to a different supplier because the current supplier's products are unique.
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The country's largest landscape company is the result of a merger between two multi-state firms, Brickman Group and ValleyCrest. Now called BrightView, the $2 billion firm was created in 2015. The company is operating in a fragmented industry dominated by small, local businesses. Which of the following identifies a relevant competitive force and a way the company might leverage it?
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b. Risk of Entry by Potential Competitors: BrightView may be able to lessen the impact of this force in a low-barrier industry through economies of scale, specifically discounts on bulk purchases of raw material inputs
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As an industry environment evolves over time the:
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c. the strength of the competitive forces in the industry change.
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A company is debating on entering a new industry. The first order of business is to conduct an analysis of the five forces. Why is this a crucial first step in the decision-making process of entering into a new market or industry?
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a. If the barrier for entry is low, and suppliers and buyers have strong bargaining power, the venture will most likely fail.
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Strategic groups exist because:
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a. companies within the same industry may position themselves differently regarding distribution channels, market segments, and other differentiators. This affects their strategies.
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In the toy industry, Mattel is one of the world leaders, especially with their line of Barbie dolls. However, it has faced competition from MGA Entertainment, who has produced Bratz dolls since the 1990s. Which of these statements is true about the strategic group in which these companies compete?
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d. By competing in the same strategic group, the two companies are dealing with customers who view their products as direct substitutes for each other.
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What is a set of competitive firms emphasizing similar strategic dimensions and using a similar strategy?
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Strategic group
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The term "white space" has become a very popular term over the last few years. This term describes a space in the competitive landscape that competitors are not occupying. Pricing, quality, and distribution channels are examples of what may be plotted along strategic dimensions to determine points of parity and points of difference. As a company, do you want to be in the "white space"?
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d. Possibly, as the "white space" could be a place that is competitive but was neglected. It could also be a space that is not competitive or profitable.
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What is a competitor analysis?
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a. An analysis of companies in which a firm competes directly
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Which of the following is not a concern of a competitive analysis?
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b. Data on what the competitor's available funds are for innovation, as shown by their balance sheet
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What is the most likely outcome for a company if the executives never analyze a competitor's possible reaction to competitive actions the firm takes?
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a. The company will most likely fail because the competitor might neutralize their competitive advantage.
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The executive leadership team of a large corporation is analyzing a report. The report's contents have information that can be used to better understand and anticipate a competitor's objectives, strategies, assumptions, and capabilities. What is the term for the report being analyzed?
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d. Competitor intelligence
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What is the term that would describe the relationship between Apple, the leading cellphone manufacturer and applications provider, and King, the developers behind the Candy Crush app?
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a. Complementors
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Which of the following would be deemed as unethical when developing competitor intelligence?
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d. All of these actions are ethical
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You are hired as strategic analyst for a Fortune 500 company. Your first task is to develop a competitive intelligence report to find key insights on the rivals' latest actions, current capabilities, and potential future actions. Being new to this type of report and the ethical protocols, what should be your first action?
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c. Contact Strategy and Competitive Intelligence Professionals
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What are the possible repercussions of a company that performs unethically in order to receive competitive intelligence to gain an advantage?
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b. Possible jail time or fines, but not always
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Firms should study their internal organization as part of the strategic management process because:
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d. it provides the insights the firm requires, to match what a firm can do, with what a firm might do when formulating strategies.
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An internal analysis is important because:
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b. not all strategies will work for all firms; successful strategies must be aligned with a company's strengths.
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A software company that is seeking a sustained competitive advantage will constantly be facing obsolescence because of environmental change. To generate a sustained competitive advantage, this company must:
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c. be continually building its technological capabilities to develop new skills as technology advances so that it can offer constant upgrades to meet customers' needs.
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If a start-up U.S.-based automobile parts supplier were to apply a global mind-set to its internal analysis, it would:
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d. study all of its internal resources with an understanding of which capabilities offer value to meet the needs of U.S., Japanese, European and Korean automakers.
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Value is measured by:
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a. a product's performance characteristics and by its attributes for which customers are willing to pay.
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Which of these might be a definition for a value-generating activity?
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b. The core competencies that a company holds that make it possible for it to serve customers in a different way from its competitors
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An intangible resource is one that:
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c. is rooted deeply in the company history, is gathered over time, and is difficult for competitors to analyze or imitate.
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One example of a tangible resource might be a:One example of a tangible resource might be a:
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b. network of distribution centers in strategic locations around the world.
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Capabilities are:
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c. the combination of tangible and intangible resources to complete the organizational tasks required to produce, distribute and service the goods or services for customers.
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Capabilities develop into core competencies that can serve as the source of competitive advantage when:
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d. employees, or human capital, integrate them and deploy them to deliver value to customers.
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A hospital system operates 22 physicians' offices, 5 skilled nursing facilities, and 2 hospitals. The system employs more than 500 people directly and is affiliated with more than 100 additional physicians. The system offers a wide breadth of medical services, including all of the major specialties. The system was recently recognized as the top cardiac hospital in the state. Which of these represents the company's capabilities?
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c. Its complete list of medical services
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An industrial fabrication firm has purchased a facility capable of housing large-scale projects - as long as 120 feet. The firm could develop this tangible resource into a capability by:
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c. employing engineers who can design large projects and welders with expertise in these projects.
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A resource or capability can be classified as a core competency that can be a source for a sustainable competitive advantage if:
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a. it is different and better than the way a competitor is executing the same capability.
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A capability is nonsubstitutable when:
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b. it does not have strategic equivalents.
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A company owns a patent, with six more years of protection, on a prescription medication that is used by people around the world. This resource is:
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a. rare and valuable.
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Which of the following capabilities meets the criteria for being a core competency, in that it is rare, valuable, costly to imitate, and nonsubstitutable?
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b. A company history and brand
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A capability can be considered costly to imitate when:
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c. it is developed because of unique historical conditions.
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A company is analyzing its value chain to discover its value-creating activities. While formulating its strategy, the firm will:
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a. consider the operational functions and support functions to determine which activities contribute the greatest value in the product or service being sold to customers.
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Outsourcing is:
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b. the purchase of a value-creating activity or support function activity from an external supplier.
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A lawyer has grown his law firm, gaining new clients in two diverse areas - estate law and immigration law. He's not sure which specialty will become his focus in the long run. At the same time, he believes he has enough work to support hiring a paralegal. However, he is having trouble hiring a paralegal who can manage both types of clients. He was able to find a freelance paralegal referral service that connects lawyers to paralegals who have experience in a variety of specialties. He might consider outsourcing through the referral service because:
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b. it provides him with the flexibility to gain capabilities to serve both types of clients without making a long-term investment.
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A nonprofit organization is focused on providing mental health services to the homeless in its geographic area. It serves people by ensuring they receive the public assistance they are eligible for and then connects them with care providers who have expertise working with transient patients. The company's primary expenses are the salary and benefits for its staff of social workers, and it receives government funding to cover those. However, the organization does not have enough people to fill its open positions and has a waiting list of homeless people in need of case workers. Which of these represents a weakness for the nonprofit organization?
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b. Human Resources
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Identifying internal strengths and weaknesses is important because:
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a. strategies are more successful when they are aligned with a company's resources, capabilities, and core competencies.
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A sporting goods company developed an innovative material for the manufacture of baseball bats. For many years, the material and its process for manufacturing served as a rare and valuable capability, distinguishing it from competitors. Unfortunately, many of the baseball leagues have been changing their regulations to outlaw bats made of this material because they constitute an unfair advantage for players. As part of its internal analysis, its leaders might:
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c. determine if the company's core competency is in research and development of different materials, or if it is in working with this material specifically.
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A core rigidity is:
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a. when a resource becomes an obstacle, generating inertia and stifling innovation, often because of conditions in the external environment.
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A company has identified a core competency in providing telecommunications services for mid-sized businesses through a combination of simple technology and software, excellent customer service, and low-cost hardware. As competitors gain ground in competing for mid-sized companies, how might this core competency become a core rigidity?
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c. If the company doesn't keep up with advances in technology and customers begin to expect greater value from the technology
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Apple, a leader in mobile technology products, wasn't always focused on mobile technology. In 2007, the company changed its name from Apple Computers to Apple Inc. This change was indicative of a shift in the industry. Apple began introducing iPods, iPhones, iPads, iTunes, and the App Store. Apple recognized its core competencies in hardware design and software engineering should serve as the foundation of its future strategy. What tool did Apple use to determine its competitive advantage?
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d. Internal analysis
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Myspace, the social networking site, was a leader and innovator for modern social networking. However, not long after Myspace's peak, a new social networking site was quickly gaining ground, Facebook. Myspace was quickly made obsolete because of Facebook's superior functionality, design, and features. What was Myspace lacking that resulted in the company losing its competitive advantage?
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c. Costly-to-imitate capabilities because it became inexpensive to start a social networking site
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Blackberry, a one-time leader in secure cellphones, has lost its edge. Without significant upgrades or innovation, the company quickly lost marketshare to iPhones and Android devices. When attempting to imitate these advances with the Blackberry Storm product, it flopped. Blackberry was criticized as trying to leverage capabilities beyond its core competencies. What tool should Blackberry use to regain a scope of their core competencies and determine potential sources of competitive advantage?
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d. Value chain analysis
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TaylorTech, a high-quality metals finishing company, is struggling with its margins. TaylorTech has raw materials delivered to its foundry in Pittsburgh, where the company melts the metals into castings. The firm then polishes them as a value-added process before selling the custom castings to customers. Its unique process is rare in the United States, is very secretive, and results in a more efficient cast that commands a premium price. Unfortunately, the casting process is becoming more expensive due to increased wage pressure from the workers specializing in casting. With these issues, TaylorTech has to make a decision. Which is the most viable option for TaylorTech to increase its margins?
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b. Outsourcing of the casting process
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A CEO is in an argument with his Board of Directors over the direction of the software company he is leading. The CEO wants to branch out and take advantage of its competencies and capabilities to pursue opportunities enabled by new technology that are forecasted to be very profitable. But, these activities are not what the company is used to, and it would have to develop hardware alongside its specialty in software. The Board is arguing that the company is a software company and should remain a software company. What concept must the CEO overcome?
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c. Core rigidity
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A business-level strategy is:
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b. an integrated and coordinated set of commitments and actions to gain an advantage by exploiting core competencies.
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A retail company feels that it has a mixed identity. Some of the leadership is focused on promoting the company as offering the highest quality, and other leaders argue they should be lowering prices to attract customers. The team is working through a strategic management process and determines that it needs better definition for the way it will compete against its rivals within the same industry and product category. This company needs to formulate and implement a(n):
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d. business-level strategy
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Which of these might be an alternative definition of business-level strategy?
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b. A plan for how the company will compete in its industry against its rivals to achieve a competitive advantage
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A company is working through its strategic management process to develop a long-term strategic plan that will help it to achieve a competitive advantage. The company's leaders have completed the work of developing a mission, a vision, and core values. They have also researched and conducted a thorough SWOT analysis identifying general, industry, and competitor environments, as well as internal resources, capabilities, and core competencies. As they determine the business-level strategy they will pursue for their core business unit, which of these steps would they take?
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b. Determine if the company will compete by reducing the cost structure or by focusing on generating greater perceived value by its customers - or both - based on conclusions reached in the research and decisions up to this point
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Companies must effectively manage their relationships with customers because:
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c. they must satisfy customers' needs to achieve a competitive advantage.
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As part of its selection of a business-level strategy, a firm will decide which customers it will serve and what goods or services it will use to satisfy customers' needs. It must determine:
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a. how it will satisfy those customers' needs using its core competencies to implement value-creating strategies.
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Market segmentation is a part of all business-level strategies and is used to determine which customers to serve. This is most critical for which business-level strategies?
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b. Focused differentiation and focused cost leadership strategies
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As a company works to build relationships with its customers, its leaders must determine which customer needs they will seek to satisfy. The company's leaders must also recognize that customer needs change over time. What might these leaders focus on to ensure they anticipate customers' changing needs?
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a. Monitoring customer trends in the industry and of consumers as a whole
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Which of these strategies could be implemented to improve a company's richness in its customer relationships?
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d. Provide email updates on shipping status and satisfaction surveys following the arrival of a produce
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A cost leadership strategy is one in which:
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b. companies use process innovations, such as advanced production or distribution methods, to operate efficiently.
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A differentiation strategy is one in which:
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b. firms create products that have features customers value and are willing to pay a higher price for.
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An oil company develops an innovative refining process that reduces the time required to produce gasoline by 25 percent. The company has identified its unique process as a core competency. Which of these strategies would be most beneficial for the company to pursue and would best be aligned with the firm's internal analysis?
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b. Cost leadership strategy
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About six months ago, a mid-sized manufacturer of athletic shoes decided to pursue an integrated cost leadership and differentiation strategy. The company reduced its internal costs by consolidating the number of colors and variations it offers to customers. At the same time, the R&D team added a patented sole to all of its shoes. Which of these represents the best argument for the company to continue pursuing its current business-level strategy?
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c. It's true we've seen our net sales decline, however, our gross profit has increased and our volumes are up year-over-year. Our patent for the sole has been approved and the legal department says we're good to go on our advertising claims about the new sole.
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In a focused strategy:
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c. a company selects a more narrow group, or niche, of customers on which to concentrate its efforts.
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Which of these strategies represents a company that has selected a differentiation strategy?
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a. A grocery store chain that is converting their local neighborhood stores to warehouses. The chain eliminates shopping in the aisles and instead has customers select items online or through an app. The customer can then pick up their items in a drive through without having to leave their vehicles.
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Research indicates that a competitive advantage in logistics is a primary strategy that creates the most value for a cost leadership strategy. Choose which of these value-creating activities should be a focus for a company pursuing a cost leadership strategy.
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a. Supply chain
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Many companies pursue an integrated cost leadership/differentiation strategy, working to lower cost structures while also enhancing their products and services. To successfully pursue this strategy, companies could:
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a. invest in developing total quality management systems and improving marketing effectiveness.
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Often a company's business-level strategy can be easily identified by reviewing its marketing materials. Consider the marketing slogans of the following companies and identify which one is pursuing a business-level strategy of differentiation.
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b. HBO - It's not TV, It's HBO
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The effectiveness of a business-level strategy is contingent on:
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b. the opportunities and threats in a firm's external environment and the strengths and weaknesses of a firm's resources.
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Cost leadership strategies can be attractive to companies looking to address the competitive forces of rivalry with existing competitors because:
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c. rivals are hesitant to slash their own prices, and often their profitability, to compete with a low cost leader.
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An integrated cost leadership/differentiation strategy is able to address the competitive forces because:
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a. the strategy, when executed effectively, offers the strengths of both the cost leadership strategy and the differentiation strategy.
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Differentiation strategies are successful in addressing the competitive force of the bargaining power of suppliers because:
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d. the higher margins of the firm can reduce the influence of increases in supplier costs.
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A construction company is pursuing a focused differentiation strategy, and after reviewing its core competencies, the leaders have decided to specialize in hospital construction. Which of these is an example of how that strategy is addressing the bargaining power of buyers - customers?
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b. The company participates in competitive bidding processes, and despite often submitting a higher bid than competitors, it is awarded the job based on its expertise.
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An industry-leading technology firm utilizing a differentiation strategy has decided to increase prices on its patented product to bolster profit margins and deliver a higher return to investors. Consider the impact of this decision in light of the Five Forces of Competition. Which of these situations should the firm prioritize?
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d. Industry rivalry
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Which of these represents a risk for companies pursuing a cost leadership strategy?
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d. Competitors' innovations resulting in their ability to drive costs lower
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Which of these represents a risk for companies pursuing a differentiation strategy?
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a. Buyers choosing to purchase lower priced products during a recession
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When pursuing a business-level strategy, sometimes a company is unable to fulfill elements of the strategy because it has a split focus, resulting in a strategy that fails to satisfy customers' needs. This is a major risk of which business-level strategy?
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c. Integration cost leadership/differentiation strategy
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When pursuing a business-level strategy, sometimes a company is unable to fulfill elements of the strategy because it has a split focus, resulting in a strategy that fails to satisfy customers' needs. This is a major risk of which business-level strategy?
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c. Integration cost leadership/differentiation strategy
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A company president for a software firm has chosen to implement a differentiation strategy, offering his product in a Software as a Service (SaaS) platform with a monthly subscription. Most of his competitors are selling their products as a one-time purchase. Which of these represents the greatest risk to the strategy?
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b. An established competitor has announced it will begin offering its programs in an SaaS model next quarter.
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Michelle opens a residential heating company dedicated to geothermal heating systems. She is pursuing a focused differentiation strategy, serving the needs of customers who are looking for environmentally-friendly solutions to heat and cool their homes. Which of these represents a risk to the company because Michelle is using a focused strategy rather than a broad strategy?
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d. As renewable energy continues to gain popularity, mainstream residential heating and cooling companies that are larger and have more resources decide to offer more geothermal options.
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Firms operating in the same market, offering similar products, and targeting similar customers are:
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b. competitors.
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The ongoing set of competitive actions and competitive responses that occur among firms as they maneuver for an advantageous market position is a:
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c. competitive rivalry.
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By introducing Android Pay in response to Apple Pay, Google hopes to build and defend its competitive advantages and improve its market position through:
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c. competitive behavior.
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One constant improvement among smartphones of all brands is camera quality. As soon as Samsung, Google, or Apple introduces an updated phone, the others respond with equal or better quality in their next update. These competitive moves can be encompassed as the competitive _______________ of that market.
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d. dynamics
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Which of these represent a scenario in which Apple and Google participate in multimarket competition with one another?
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c. Both compete in the personal computer, tablet, and smartphone industries
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The number of markets with which a firm and a competitor are jointly involved, and the degree of importance of the individual markets to each is referred to as:
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a. market commonality.
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FedEx and United Postal Service compete in many of the same markets and have similar types of truck and airplane fleets, similar levels of financial capital, and other similarities. These tangible and intangible resources between the two firms describes the:
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b. resource similarity.
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If two well-known shoe stores, Famous Footwear and Journey's, compared their resource similarities and market commonalities, they would find that, aside from competing in the same industry and carrying some of the same shoe brands, they target very different markets. In using market commonalities and resource similarities, either Famous Footwear or Journey's can conduct a:
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c. competitor analysis.
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Rumor has it a new restaurant is coming to town called Italia Noodles. However, the owners are waiting to compare market commonalities and resource similarities to other local Italian restaurants. Italia Noodles is conducting a:
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d. competitor analysis.
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What is the outcome of a firm not performing a competitor analysis?
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c. A firm will not understand its competitor
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Awareness, motivation, and ability are drivers of:
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a. competitive behavior.
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Awareness affects the extent to which the firm understands the consequences of its:
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d. competitive actions and responses.
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A new family-owned organic grocer has been successful since its grand opening nearly a year ago. With little competition in the area, the organic grocery has been particularly successful in serving organic food consumers. The grocer has just found out that Whole Foods will be starting construction on a new store nearby. The grocery feels that its family ownership and locally grown foods offerings give it a position in which to take action against the developing Whole Foods. However, as a small business, the organic grocery does not have the financial means to launch a rivalry against Whole Foods. In this instance, the organic grocery is missing which driver of competitive behavior?
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c. Ability
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Prioritize the three drivers of competitive action ranking their importance from least to most important.
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d. Awareness, motivation, ability
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A strategic response to engaging in competitive rivalry is called a:
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d. competitive action.
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Which characteristic best describes tactical actions?
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a. Relatively easy to implement and reverse
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Fast food chain, Bob's Bigger Burgers, has just launched a campaign to market its new pound and a half burger against its competitor, Lou's Burgers, who has previously sold the biggest burger at a pound and a quarter. Bob's Bigger Burger's strategic move against Lou's Burgers is a:
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d. competitive action.
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A firm seeking to improve its market position or proactively defend its competitive advantage would be engaging in a:
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c. competitive action.
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A firm that responds to the first mover's competitive action, typically though imitation, is called a:
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c. second mover.
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The likelihood of a firm taking competitive action is affected by the:
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c. organization's size.
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Which is not a reason for a firm to respond to a competitor's action?
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c. The firm's market position becomes easier to defend.
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Car maker, BAAS, is known for its risky competitive behavior, including drastically changing its prices over short time spans. Based on this information, what is the most likely competitor response?
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b. Competitor will be less likely to respond because of BAAS's risky behavior.
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FreeForAll is an online retailer for graphic tees and hats. Previously, it was the only mass retailer for such goods. Hatz, an in-store retailer that sells predominantly baseball hats, has just launched an ecommerce site that also features tee-shirts for sale. FreeForAll has decided to respond quickly to Hatz's competitive action. This decision is based on FreeForAll's:
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a. market dependence.
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Why does it make sense for ecommerce-based FreeForAll to competitively respond after brick-and-mortar based Hatz enters the ecommerce market with the same product offerings?
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a. FreeForAll's profits depend on holding the majority of the ecommerce hat and tee-shirt market.
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Slow-cycle markets are:
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a. markets in which the firm's competitive advantage is shielded from imitation, commonly for long periods of time, and where imitation is costly.
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Fast-cycle markets are markets in which the firms' capabilities that contribute to competitive advantages aren't shielded from imitation and where imitation is often __________.
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b. rapid and inexpensive
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Apple quickly launches their next wave of innovative iPhones in order to keep up with competitors like Samsung and Microsoft. Imitation is rapid and inexpensive in the smartphone industry. Apple is a part of what kind of market?
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d. Fast-cycle market
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A pharmaceutical company has a patented antidepressant that has few side effects, and has dominated the market. The company has slowly been conducting research and development to improve this drug. The slow nature of drug development categorizes the pharmaceutical company as part of a:
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b. slow-cycle market.
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What is an advantage of being a part of a slow-cycle market as opposed to a fast-cycle market?
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b. In slow-cycle markets, firms can shield themselves from imitation.
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Standard-cycle markets are:
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c. markets in which the firm's competitive advantages are partially shielded from imitation, and imitation is moderately costly.
