Deck 8: Entrepreneurial Strategy and Competitive Dynamics

Question 1

During the introductory stage of the life cycle, firms tend to depend on

A) tight management control systems.
B) research and development.
C) low cost leadership.
D) production efficiency.

Answer 1

B

Question 2

Most successful turnarounds begin with

A) external analysis.
B) internal analysis.
C) both internal and external analysis.
D) a change in leadership.

Answer 2

C

Question 3

Disruptive innovations

A) allow a company to charge high prices for innovative products
B) allow consumers at the bottom of the market access to a product historically they did not have access to
C) allow for demanding consumers at the top of the market to access a product
D) are often simpler but more expensive for the consumer

Answer 3

B

Question 4

Four basic strategies that are available in the decline stage are maintaining, harvesting, exiting, or

A) eliminating competitors.
B) consolidating.
C) minimizing office expenses.
D) reducing business travel.

Question 5

The deregulation of the airline industry completely upset the bases of competition and led to the dramatic realignment of the dominant companies and their competitive advantages. Which of the following is not an example of a low cost airline that emerged with a different business model?

A) Swissair.
B) Westjet.
C) Ryanair.
D) Easyjet.

Question 6

Low to moderate emphasis on process design tends to occur during the _______ stage in the industry life cycle.

A) preliminary
B) decline
C) introductory
D) growth

Question 7

Which of the following is not an example of a disruptive technology?

A) The personal computer
B) Smart phones.
C) Fuel-injected engines.
D) Just in time inventory systems.

Question 8

The life cycle idea used to describe industries is clearly analogous to a living organism that experiences birth, growth, maturity, and death. This comparison

A) provides clear insight into how organizations change over time.
B) has some limitations and does not always hold true.
C) is appropriate because firm rarely experience renewal.
D) perfectly explains the cereal industry.

Question 9

The automotive industry is considered to be at the _______ stage in the industry life cycle.

A) maturity
B) decline
C) growth
D) re-birth

Question 10

In the maturity stage, aggregate industry demand begins to slow and the markets are becoming

A) less competitive.
B) less equally balanced.
C) saturated.
D) attractive to new adopters.

Question 11

The most intense level of competition within an industry tends to occur during the _________ stage in the industry life cycle.

A) introductory
B) growth
C) competitive
D) maturity

Question 12

In general, the industry life cycle model implies an evolutionary change and

A) rapid transition from stage to stage.
B) applies primarily to larger, older companies.
C) is concerned primarily with new entrants.
D) gradual progression from one stage to the next.

Question 13

Which of the following is not a characteristic of a turnaround strategy?

A) it can occur at any stage in the life cycle.
B) it is most likely to occur during the maturity or decline stage.
C) it can be used to reverse decline.
D) it is not possible at the introduction stage.

Question 14

Success in the introduction stage requires an emphasis on research and development and marketing activities to enhance awareness of the product or service. The challenge involves

A) conflict with existing products.
B) dealing with high sales volumes.
C) keeping production costs low.
D) developing the product and getting people to try it.

Question 15

During the growth stage, revenues increase at an accelerating rate because new consumers are trying the product and

A) product differentiation is more difficult HYPERLINK ""
B) products become regarded as rare or unique.
C) there are infrequent purchases.
D) a growing number of satisfied customers are making repeat purchases.

Question 16

Building a recognizable brand, gaining customer loyalty, and setting the standards for the industry are all potential benefits of being

A) the first mover in the market.
B) a follower in the market.
C) a late mover able to overcome barriers to entry.
D) a late mover in a market.

Question 17

According to the text, the overall objective of defending the market share and extending the product life cycle tends to be typical of the __________ stage in the industry life cycle.

A) growth
B) decline
C) maturity
D) mortality

Question 18

By far the most potent forces for industry change are

A) technology and venture capital.
B) the bargaining power of buyers.
C) competitive rivalry.
D) technology and innovation.

Question 19

Which of the following is not one of the evolutionary trajectories of industry change?

A) creative change.
B) regressive change.
C) radical change.
D) progressive change.

Question 20

Although all decisions in all phases of an industry life cycle are important, they become particularly ______________ in the decline stage.

A) critical
B) radical
C) cautious
D) expensive

Question 21

Once attacked, competitors are faced with deciding

A) how to find a good lawyer.
B) whether the attack is personal or "just business."
C) how they will respond, their reasons to respond and their capability to respond.
D) how important the line of business that has been attacked in is to their overall strategy.

Question 22

During the introduction stage of the industry life cycle the major functional area or concern is research and development.

Question 23

There is little advantage in being the "first mover" in a market.

Question 24

Which of the following is not a tactic that falls within the asset and cost surgery turnaround strategy?

A) deferring investment in new plants and equipment.
B) outsourcing the production of various inputs.
C) cutting administrative expenses.
D) benchmarking specific activities against industry leaders.

Question 25

The underlying reasons that explains why companies launch new competitive initiatives is desire to

A) obtain first mover advantages.
B) expand production capacity.
C) improve market position.
D) strengthen financial outcomes.

Question 26

Radical change is most likely to occur under non-threatening conditions.

Question 27

During the introductory stage of an industry's life cycle research and development is a key activity.

Question 28

The turnaround strategy used by Stephen M. Bennett at Intuit could be described as

A) streamlining operations.
B) selective product and market pruning.
C) piecemeal productivity improvements.
D) asset and cost surgery.

Question 29

Which of the following is not a tactic that falls within the piecemeal productivity improvements turnaround strategy?

A) speeding up collection of receivables.
B) improving business processes by re-engineering them.
C) reducing R&D and marketing expenses.
D) increasing capacity utilization.

Question 30

Typically, the generic strategy of cost-leadership is adopted during the introduction stage.

Question 31

One of the most common reasons that a cycle of competitive actions and reactions get started is

A) electronic data interchange.
B) globalization.
C) economic recession.
D) the emergence of new entrants.

Question 32

Two broadly defined types of competitive action include

A) posturing and competitive moves.
B) strategic actions and tactical actions.
C) cost leadership and differentiation.
D) retaliation and counterattack.

Question 33

The four stages of the industry life cycle include introduction, growth, maturity and revitalization.

Question 34

There can be benefits to being a "late mover" in a market or industry.

Question 35

Two factors that may be used to assess whether or not other companies are close competitors are

A) Internet-based knowledge management systems and organizational learning.
B) Market commonality and resource similarity.
C) Online access to real-time sales and service information.
D) Espionage and corporate spying.

Question 36

The least potent forces for industry change are technology and innovation.

Question 37

Competitive dynamics may be understood as

A) intense rivalry among similar competitors.
B) strong buyer power.
C) a strong threat of substitutes.
D) strong supplier power.

Question 38

In general, the industry lifecycle implies an evolutionary change and gradual progression from one stage to the next.

Question 39

Disruptive technologies can be both product based and process based.

Question 40

Which of the following phrases best completes the following sentence? How strong a response an attacked rival can mount will be determined by

A) the direction from the Board of Directors.
B) the personality of the CEO.
C) its ability to access markets less expensively.
D) its strategic resource endowments.

Question 41

Most businesses in decline have no potential for rejuvenation.

Question 42

Outline the key reasons why companies launch new competitive initiatives.

Question 43

Companies operating in competitive environments need to have a keen sense of who their closest competitors are and the kinds of competitive actions they might be planning.

Question 44

Briefly explain the forces that lead an organization to follow the creative change trajectory.

Question 45

Outline the four stages in the industry lifecycle and discuss why lifecycle concept is relevant to strategic management.

Question 46

Intense rivalry among competitors rarely has the potential to alter a firm's strategy.

Question 47

Price cutting, imitating successful products, or expanding production capacity are examples of competitive actions that might provoke competitors to react.

Question 48

At what stage in the lifecycle is a turnaround strategy likely to be employed?

Question 49

Products in the decline stage often consume a large share of management time and financial resources relative to their potential worth.

Question 50

New entrants into markets, whether by start-ups or by incumbent firms, nearly always threatens existing competitors.

Question 51

Many product classes and whole industries, such as beer, automobiles, televisions, furniture and airlines are in the maturity stage.

Question 52

After stagnating and stumbling through the dot-com crash in 2000 and 2001, Intuit developed a turnaround strategy that resulted in substantial profits.

Question 53

How do industries change and move through the various stages of their life cycle?

Question 54

The lifecycle analogy always holds true because decline inevitably leads to death.

Question 55

Explain the "action-response" processes that create competitive dynamics within an industry.

Question 56

What are the key considerations for the rejuvenation of a firm in an industry that is in the maturity or decline stage of the lifecycle?

Question 57

Identify the four basic strategies that are available in the decline stage and discuss the factors that managers should consider when choosing from these four strategies.

Question 58

Even when an industry is in overall decline, there may be pockets of profitability.

Question 59

Explain the two key factors that are used to assess whether or not companies are close competitors.