Exam 4: Further Topics in Industry and Competitive Analysis

The ability to predict a competitor's behavior is facilitated by the tendency for the managers within an industry to share common beliefs about their industry and about the key success factors within it.

The key insight from the "prisoners' dilemma" game is:

The key problem facing Nespresso in implementing a "razors and blades" strategy for its Nespresso system is that:

The propensity for similar businesses to cluster in the same locality (e.g.IT companies in Silicon Valley, fashion houses in Milan) is evidence of the intensity of the competitive instincts that drive the owners of these businesses.

A strategic group is a group of firms in an industry that serving the same market segment.

The key implication of "hypercompetition" in business is that:

The "prisoners' dilemma" can be resolved by changing the payoffs in a way that induces cooperative behavior.

The difference between substitute and complementary products may be summarized as follows:

After arriving in Mexico in 1519, the destruction by Hernan Cortes of his own ships was a signal, in game theory terminology, of "commitment" for his troops to the conquest of the Aztec empire

In the world of business, competition and cooperation seldom coexist.

The main use of industry segmentation analysis is to:

The value of a product to its consumers tends to be reduced by availability of close substitutes.Similarly, the value if a product to its consumers is reduced by the availability of complements.

Schumpeter's process of "creative destruction" challenges Porter's five forces of competition framework by:

In the European airline industry, EasyJet, Baltic Air, WizzAir, and Ryanair:

Industries are the central arenas in which competition takes place.Disaggregating industries into segments and groups of firms add little to our understanding of competition.

The Schumpeterian view of competition emphasizes the role of innovation and entrepreneurship

The contribution of game theory to the field of strategic management is in:

Industry segmentation is always horizontal-it is based upon the products an industry supplies and the customers to which they are supplied.The notion of vertical segmentation-segmenting an industry along its value chain is attractive in principle but impossible in practice.

Strategic group analysis is primarily useful for:

Empirical research shows that proportion of inter-firm differences in profitability that industry factors explain is: