Question 1

Which of the following characteristics must be satisfied for a commitment by one firm to generate the desired response from its competitors?

Accepted Answer

A) It must be visible 
B) It must be understandable 
C) It must be credible 
D) a & c 
E) All of the above 
A) It must be visible 
B) It must be understandable 
C) It must be credible 
D) a & c 
E) All of the above E

Question 2

Suppose a firm has $50 million to invest in a new market.Given market uncertainties,the firm forecasts a high-scenario where the present value of the investment is $200 million and a low-scenario where the present value of the investment is $20 million.Suppose that by waiting a year,the firm can learn with certainty which scenario will arise.Assume a 10% annual discount rate.If the firm waits one year and learns that the high-scenario will happen,what is the firm's expected net present value of the investment?

Accepted Answer

$68.2 million

Question 3

Which of the following commitment strategies involves soft commitment postures,strategic complements for the stage 2 tactical variables,a refrain commitment action and an acceptance of the status quo out of fear thus waiting to follow the leader?

Accepted Answer

A) Top Dog 
B) Lean and Hungry Look 
C) Mad Dog 
D) Puppy-Dog Ploy 
E) Fat-Cat Effect 
A) Top Dog 
B) Lean and Hungry Look 
C) Mad Dog 
D) Puppy-Dog Ploy 
E) Fat-Cat Effect E

Question 4

Suppose a firm has $50 million to invest in a new market.Given market uncertainties,the firm forecasts a high-scenario where the present value of the investment is $200 million and a low-scenario where the present value of the investment is $20 million.If the firm believes each scenario is equally likely and invests today,what is the net present value of the investment?

Accepted Answer

The answer of Suppose a firm has $50 million to...

Question 5

What type of contractual clause in a sales contract with a buyer provides a provision such that the seller is obligated to extend the same price terms to the buyer that it extends to other customers?

Accepted Answer

A) Indemnification clause 
B) Most favored customer clause (MFC
C)  
C) Escape clause 
D) Money back guarantee 
E) Meet the competition clause (MC
C)  
A) Indemnification clause 
B) Most favored customer clause (MFC
C)  
C) Escape clause 
D) Money back guarantee 
E) Meet the competition clause (MC
C)

Question 6

What step of Ghemawat's framework for analyzing commitment intensive choices involves analyzing whether the firm's commitment is likely to result in a product market position in which the firm delivers superior benefits to consumers or operates with lower costs than competitors?

Accepted Answer

A) Positioning analysis 
B) Sustainability analysis 
C) Flexibility analysis 
D) Judgment analysis 
E) Final Commitment analysis 
A) Positioning analysis 
B) Sustainability analysis 
C) Flexibility analysis 
D) Judgment analysis 
E) Final Commitment analysis

Question 7

Suppose a firm has $50 million to invest in a new market.Given market uncertainties,the firm forecasts a high-scenario where the present value of the investment is $200 million and a low-scenario where the present value of the investment is $20 million.Suppose that by waiting a year,the firm can learn with certainty which scenario will arise.Assume a 10% annual discount rate.If the firm waits one year and learns that the high-scenario will happen,how much has the firm increased its NPV over if it had been forced to make the investment decision solely on the basis of its current,uncertain assessment of demand?

Accepted Answer

The answer of Suppose a firm has $50 million to...

Question 8

Which of the following statements is true about a soft commitment?

Accepted Answer

A) It is bad for competitors 
B) It is good for competitors 
C) In Cournot competition, capacity expansion is an example of a soft commitment 
D) In Betrand competition, a commitment to reduce prices is an example of a soft commitment 
E) Tough commitments are always in the best interest of a firm 
A) It is bad for competitors 
B) It is good for competitors 
C) In Cournot competition, capacity expansion is an example of a soft commitment 
D) In Betrand competition, a commitment to reduce prices is an example of a soft commitment 
E) Tough commitments are always in the best interest of a firm

Question 9

Which of the following statements is true in general about firm actions that are strategic substitutes?

Accepted Answer

A) Reaction functions are downward sloping & the more of the action one firm chooses, the more of the action the other firm chooses 
B) Reaction functions are downward sloping & the less of the action one firm chooses, the less of the action the other firm chooses 
C) Reaction functions are upward sloping & the more of the action one firm chooses, the more of the action the other firm chooses 
D) Reaction functions are upward sloping & the less of the action one firm chooses, the less of the action the other firm chooses 
E) In the Cournot model, quantities are strategic substitutes 
A) Reaction functions are downward sloping & the more of the action one firm chooses, the more of the action the other firm chooses 
B) Reaction functions are downward sloping & the less of the action one firm chooses, the less of the action the other firm chooses 
C) Reaction functions are upward sloping & the more of the action one firm chooses, the more of the action the other firm chooses 
D) Reaction functions are upward sloping & the less of the action one firm chooses, the less of the action the other firm chooses 
E) In the Cournot model, quantities are strategic substitutes

Question 10

Which of the following commitment strategies involves tough commitment postures,strategic substitutes for the stage 2 tactical variables,a make commitment action and an assertion of dominance forcing rivals to back off?

Accepted Answer

A) Top Dog 
B) Lean and Hungry Look 
C) Mad Dog 
D) Puppy-Dog Ploy 
E) Fat-Cat Effect 
A) Top Dog 
B) Lean and Hungry Look 
C) Mad Dog 
D) Puppy-Dog Ploy 
E) Fat-Cat Effect

Question 11

Which of the following is a way that Airbus significantly enhanced the credibility of its commitment to enter super jumbo jet market?

Accepted Answer

A) By announcing entrance into the market 
B) By entering a market they had not been in previously 
C) By projecting changes in air travel included increased congestion in the traditional hub-and-spoke system 
D) By war gaming how the A380 would accommodate growing numbers of passengers and relive airport slot congestion 
E) By securing over 60 early orders for the Airbus A380 
A) By announcing entrance into the market 
B) By entering a market they had not been in previously 
C) By projecting changes in air travel included increased congestion in the traditional hub-and-spoke system 
D) By war gaming how the A380 would accommodate growing numbers of passengers and relive airport slot congestion 
E) By securing over 60 early orders for the Airbus A380

Question 12

Which of the following statements is true about a tough commitment?

Accepted Answer

A) It is good for competitors 
B) It is bad for competitors 
C) In Cournot competition, elimination of production facilities is an example of a tough commitment 
D) In Betrand competition, a commitment to increase prices is an example of a tough commitment 
E) Tough commitments are always in the best interest of a firm 
A) It is good for competitors 
B) It is bad for competitors 
C) In Cournot competition, elimination of production facilities is an example of a tough commitment 
D) In Betrand competition, a commitment to increase prices is an example of a tough commitment 
E) Tough commitments are always in the best interest of a firm

Question 13

What tactical term best describes the capacity relationship between Toyota and Honda such that Toyota's response is to reduce production output of the Rav 4 if Honda were to first announce a large increase in the production of the CR-V that drove down prices?

Accepted Answer

A) Tough commitment 
B) Strategic complement 
C) Soft commitment 
D) Strategic substitute 
E) Duopoly 
A) Tough commitment 
B) Strategic complement 
C) Soft commitment 
D) Strategic substitute 
E) Duopoly

Question 14

What key element of a competitive move adds credibility to a making it a "true" commitment?

Accepted Answer

A) Fund raising 
B) Public announcement 
C) Relatedness factor 
D) Irreversibility 
E) Capacity expansion 
A) Fund raising 
B) Public announcement 
C) Relatedness factor 
D) Irreversibility 
E) Capacity expansion

Question 15

What term describes a decision that has a long-term impact and is difficult to reverse?

Accepted Answer

A) Dedicated investment 
B) Strategic commitment 
C) Critical choice 
D) Market investment 
E) Firm commitment 
A) Dedicated investment 
B) Strategic commitment 
C) Critical choice 
D) Market investment 
E) Firm commitment

Question 16

What step of Ghemawat's framework for analyzing commitment intensive choices involves taking stock of the organizational and managerial factors that might distort the firm's incentive to choose an optimal strategy?

Accepted Answer

A) Positioning analysis 
B) Sustainability analysis 
C) Flexibility analysis 
D) Judgment analysis 
E) Final Commitment analysis 
A) Positioning analysis 
B) Sustainability analysis 
C) Flexibility analysis 
D) Judgment analysis 
E) Final Commitment analysis

Question 17

What tactical term best describes the pricing relationship between Toyota and Honda such that Toyota's response is to lower the price on the Camry if Honda were to first announce a large price cut on the Accord?

Accepted Answer

A) Tough commitment 
B) Strategic complement 
C) Soft commitment 
D) Strategic substitute 
E) Duopoly 
A) Tough commitment 
B) Strategic complement 
C) Soft commitment 
D) Strategic substitute 
E) Duopoly

Question 18

Which of the following statements is true in general about firm actions that are strategic complements?

Accepted Answer

A) Reaction functions are downward sloping & the more of the action one firm chooses, the more of the action the other firm chooses 
B) Reaction functions are downward sloping & the less of the action one firm chooses, the less of the action the other firm chooses 
C) Reaction functions are upward sloping & the more of the action one firm chooses, the more of the action the other firm chooses 
D) Reaction functions are upward sloping & the less of the action one firm chooses, the less of the action the other firm chooses 
E) In the Cournot model, quantities are strategic complements 
A) Reaction functions are downward sloping & the more of the action one firm chooses, the more of the action the other firm chooses 
B) Reaction functions are downward sloping & the less of the action one firm chooses, the less of the action the other firm chooses 
C) Reaction functions are upward sloping & the more of the action one firm chooses, the more of the action the other firm chooses 
D) Reaction functions are upward sloping & the less of the action one firm chooses, the less of the action the other firm chooses 
E) In the Cournot model, quantities are strategic complements

Question 19

What step of Ghemawat's framework for analyzing commitment intensive choices involves analyzing potential responses to the commitment by competitors and potential entrants in light of the commitments that they have made and the impact of those responses on competition?

Accepted Answer

A) Positioning analysis 
B) Sustainability analysis 
C) Flexibility analysis 
D) Judgment analysis 
E) Final Commitment analysis 
A) Positioning analysis 
B) Sustainability analysis 
C) Flexibility analysis 
D) Judgment analysis 
E) Final Commitment analysis

Question 20

What type of option exists when a decision maker has the opportunity to tailor a decision to information that will be received in the future?

Accepted Answer

A) Real option 
B) Commitment option 
C) Project option 
D) Decision option 
E) Future option 
A) Real option 
B) Commitment option 
C) Project option 
D) Decision option 
E) Future option

Which of the following characteristics must be satisfied for a commitment by one firm to generate the desired response from its competitors?

Which of the following commitment strategies involves soft commitment postures,strategic complements for the stage 2 tactical variables,a refrain commitment action and an acceptance of the status quo out of fear thus waiting to follow the leader?

What type of contractual clause in a sales contract with a buyer provides a provision such that the seller is obligated to extend the same price terms to the buyer that it extends to other customers?

What step of Ghemawat's framework for analyzing commitment intensive choices involves analyzing whether the firm's commitment is likely to result in a product market position in which the firm delivers superior benefits to consumers or operates with lower costs than competitors?

Which of the following statements is true about a soft commitment?

Which of the following statements is true in general about firm actions that are strategic substitutes?

Which of the following commitment strategies involves tough commitment postures,strategic substitutes for the stage 2 tactical variables,a make commitment action and an assertion of dominance forcing rivals to back off?

Which of the following is a way that Airbus significantly enhanced the credibility of its commitment to enter super jumbo jet market?

Which of the following statements is true about a tough commitment?

What tactical term best describes the capacity relationship between Toyota and Honda such that Toyota's response is to reduce production output of the Rav 4 if Honda were to first announce a large increase in the production of the CR-V that drove down prices?

What key element of a competitive move adds credibility to a making it a "true" commitment?

What term describes a decision that has a long-term impact and is difficult to reverse?

What step of Ghemawat's framework for analyzing commitment intensive choices involves taking stock of the organizational and managerial factors that might distort the firm's incentive to choose an optimal strategy?

What tactical term best describes the pricing relationship between Toyota and Honda such that Toyota's response is to lower the price on the Camry if Honda were to first announce a large price cut on the Accord?

Which of the following statements is true in general about firm actions that are strategic complements?

What step of Ghemawat's framework for analyzing commitment intensive choices involves analyzing potential responses to the commitment by competitors and potential entrants in light of the commitments that they have made and the impact of those responses on competition?

What type of option exists when a decision maker has the opportunity to tailor a decision to information that will be received in the future?

Basic Microeconomic Principles

Economies of Scale and Scope

Agency and Coordination

The Power of Principles - an Historical Perspective

The Vertical Boundaries of the Firm

Organizing Vertical Boundariesvertical Integration and Its Alternatives

Diversificationpart Threemarket and Competitive Analysis

Competitors and Competition

The Dynamics of Pricing Rivalry

Entry and Exit

Industry Analysispart Fourstrategic Position and Dynamics

Strategic Positioning for Competitive Advantage

Sustaining Competitive Advantage

The Origins of Competitive Advantage, innovation, evolution, and Environment part Five internal Organization

Performance Measurement and Incentives in Firms

Strategy and Structure

Environment, power, and Culture

Filters

Exam 9: Strategic Commitment

Which of the following characteristics must be satisfied for a commitment by one firm to generate the desired response from its competitors?

Which of the following commitment strategies involves soft commitment postures,strategic complements for the stage 2 tactical variables,a refrain commitment action and an acceptance of the status quo out of fear thus waiting to follow the leader?

What type of contractual clause in a sales contract with a buyer provides a provision such that the seller is obligated to extend the same price terms to the buyer that it extends to other customers?

What step of Ghemawat's framework for analyzing commitment intensive choices involves analyzing whether the firm's commitment is likely to result in a product market position in which the firm delivers superior benefits to consumers or operates with lower costs than competitors?

Which of the following statements is true about a soft commitment?

Which of the following statements is true in general about firm actions that are strategic substitutes?

Which of the following commitment strategies involves tough commitment postures,strategic substitutes for the stage 2 tactical variables,a make commitment action and an assertion of dominance forcing rivals to back off?

Which of the following is a way that Airbus significantly enhanced the credibility of its commitment to enter super jumbo jet market?

Which of the following statements is true about a tough commitment?

What tactical term best describes the capacity relationship between Toyota and Honda such that Toyota's response is to reduce production output of the Rav 4 if Honda were to first announce a large increase in the production of the CR-V that drove down prices?

What key element of a competitive move adds credibility to a making it a "true" commitment?

What term describes a decision that has a long-term impact and is difficult to reverse?

What step of Ghemawat's framework for analyzing commitment intensive choices involves taking stock of the organizational and managerial factors that might distort the firm's incentive to choose an optimal strategy?

What tactical term best describes the pricing relationship between Toyota and Honda such that Toyota's response is to lower the price on the Camry if Honda were to first announce a large price cut on the Accord?

Which of the following statements is true in general about firm actions that are strategic complements?

What step of Ghemawat's framework for analyzing commitment intensive choices involves analyzing potential responses to the commitment by competitors and potential entrants in light of the commitments that they have made and the impact of those responses on competition?

What type of option exists when a decision maker has the opportunity to tailor a decision to information that will be received in the future?

Basic Microeconomic Principles

Economies of Scale and Scope

Agency and Coordination

The Power of Principles - an Historical Perspective

The Vertical Boundaries of the Firm

Organizing Vertical Boundariesvertical Integration and Its Alternatives

Diversificationpart Threemarket and Competitive Analysis

Competitors and Competition

The Dynamics of Pricing Rivalry

Entry and Exit

Industry Analysispart Fourstrategic Position and Dynamics

Strategic Positioning for Competitive Advantage

Sustaining Competitive Advantage

The Origins of Competitive Advantage, innovation, evolution, and Environment part Five internal Organization

Performance Measurement and Incentives in Firms

Strategy and Structure

Environment, power, and Culture

Filters