Exam 4: Further Topics in Industry and Competitive Analysis

The tendency for both Coca-Cola and Pepsi to compete through large advertising budgets which have little impact on their relative market shares cannot be a true example of a "prisoners' dilemma" because both firms remain highly profitable.

In hypercompetitive markets, the quest for sustainable competitive advantage is the overwhelmingly important priority for firm strategy.

In a market where Firm A and Firm B are leading suppliers, if Firm A initiates a price cut, the likelihood that Firm B responds with an identical price cut will be greater:

Signaling refers to:

When applied to real business situations, the usefulness of game theory is enhanced by its ability to predict very different outcomes on the basis of small changes in initial conditions.

The profitability of making inkjet cartridges depends critically upon their complementary relationship with between inkjet printers.

A strategic groups consists of:

The suppliers of video game consoles (Sony, Microsoft and Nintendo) are less able to appropriate the profits generated by the sales of video game systems because of d the growing size and power of the video game developers and publishers.

Empirical studies on hypercompetition show unanimously that industries are becoming increasingly turbulent and competitive advantage increasingly short-lived

A "prisoners' dilemma" situation in which a failure to cooperate leaves both parties worse off is just as likely in a multi-period game as in a single-period game.

The more similar are key success factors across the different segments of an industry, the more likely it is that the firms within that industry will specialize by segment.

The difference between barriers to entry and barriers to mobility is:

A company whose primary goal is profitability is likely to be a much more aggressive competitor than one whose primary goal is market share.

To attempt to predict competitive behaviors, Porter suggests a four-step framework, where analysts must identify:

Winner-take-all industries, where the leading firm accounts for the great majority of the industry's total profit, are usually the result of:

The main purpose of competitive intelligence is to:

To divide an industry into segments it is always preferable to focus on the characteristics of different customers rather than the characteristics of different products.

The more variables that are deployed to segment a market, the more useful is the resulting segmentation likely to be.

The producer of a complementary product can maximize its relative bargaining power by means of:

Segmentation is a process through which: