Deck 6: Competitive Rivalry and Competitive Dynamics

Question 1

Firms are mutually independent only when two or more firms jockey with one another in their pursuit of market position.

Answer 1

False

Question 2

Product quality is a universal theme and is a necessary,but not a sufficient condition for competitive success.

Answer 2

True

Question 3

Quality begins at the bottom of the organization where employees must create values for quality that permeate the entire organization.

Answer 3

False

Question 4

Two firms that share markets but have little similarity in their resources would not be direct and mutually acknowledged competitors.

Question 5

Choosing not to respond to the competitive actions of large companies with great resources is a viable long-term option for small companies.

Question 6

In competitive dynamics,actions taken by one firm seldom elicit responses from competitors.

Question 7

High quality increases costs which damages profitability.

Question 8

Intensified rivalry within an industry results in decreased average profitability for the firms within it.

Question 9

Large firms with significant market power who act like small firms (making strategic decisions and implementing them with speed) and are innovative are typically strong competitors and are likely to earn above-average returns.

Question 10

According to the discussion in the textbook,it is unlikely that firms that are typically late movers have much organizational slack.

Question 11

Expanding geographic scope in the global economy allows competitive rivalry to ease because of the larger potential customer base.

Question 12

First movers can gain a sustained competitive advantage when they reduce their costs through reverse engineering.

Question 13

Competitive dynamics indicates that firms and their strategic actions are not mutually interdependent.

Question 14

The relationship of Burger King and McDonald's provides an example of multimarket competition where market commonality exists.

Question 15

Multimarket competition refers to situations in which firms compete against each other in several or many product or geographic markets.

Question 16

Microsoft has dominated the software market for years despite experiencing intense competitive rivalry.

Question 17

The description of firms' strategic actions as dynamic in nature suggests that actions taken by one firm cause responses from competitors.

Question 18

Quality alone can assure a firm that it will achieve strategic competitiveness or earn above-average returns.

Question 19

Market commonality increases the likelihood of competitive interaction in an industry.

Question 20

Ability refers to an attacking or responding firm's knowledge of the competitive market characteristics.

Question 21

First movers are:

A) individuals who lead in the establishment of new industries.
B) firms that are first to exit an industry that begins to enter a decline stage.
C) firms that take an initial competitive action.
D) individuals who move frequently as employment opportunities change in a locale.

Question 22

Firms in a slow-cycle market are shielded from strong rivalry and imitators.

Question 23

A second mover is a (an):

A) firm that responds to a first mover's competitive action,often through imitation.
B) firm that leads a competitive action in an industry.
C) individual who imitates others in an industry to ensure the progress of his/her career.
D) individual who moves from a declining industry to a new expanding industry.

Question 24

It is much easier for a competitor to implement strategic actions than tactical actions.

Question 25

The chief disadvantages of being a first mover is:

A) the high degree of risk.
B) the high level of competition in the new marketplace.
C) an inability to sustain a sustained competitive advantage.
D) the difficulty of obtaining new customers.

Question 26

Intensified rivalry within an industry results in ____.

A) increased hiring across the industry
B) increased total revenues across the industry
C) decreased average profitability across the industry
D) increased entries into the industry

Question 27

Multimarket competition occurs when firms:

A) sell different products to the same customer.
B) have a high level of awareness of their competitors' strategic intent.
C) simultaneously enter into an attack strategy.
D) compete against each other in several geographic or product markets.

Question 28

Unlike fast-cycle markets,the struggle for market share in standard-cycle markets is not intense.

Question 29

Firms with fewer resources are less likely to respond to tactical actions than to strategic actions in order to preserve resources for the most important competitive battles.

Question 30

Compared with standard-cycle firms,fast-cycle firms have little loyalty to their products.

Question 31

Both ____ and ____ affect the awareness and motivation of a firm to undertake actions and responses.

A) first mover advantages,corporate size
B) market commonality,resource similarity
C) management capabilities,competitive analysis
D) speed of management decisions,management actions

Question 32

The larger the resource imbalance between the firm taking the competitive action and the other firms in the industry,the ____ of these other firms.

A) more fragmented the response will be
B) the slower the response will be
C) the larger the response will be
D) more tactical the response will be

Question 33

____ relates to the incentives a firm has to attack a rival or to respond if attacked.

A) Motivation
B) Awareness
C) Responsiveness
D) Ability

Question 34

Competitive dynamics refers to a series of:

A) competitive actions taken by only one firm in a market.
B) competitive actions taken by the market leader.
C) competitive actions and competitive responses initiated among firms competing within a given market.
D) competitive actions and competitive responses initiated among firms competing within numerous markets.

Question 35

Two companies that share markets,but who have little similarity in their resources are ____.

A) direct,mutually-acknowledged competitors
B) neither direct nor mutually-acknowledged competitors
C) competitors who are probably not engaged in intense rivalry
D) competitors who have reached mutually-sustainable competitive advantage

Question 36

The more dependent a firm is on its market,the more aggressively it will defend it from another competitor.

Question 37

A method of reducing competitive rivalry may be to reduce the firm's market commonality with other firms by doing all EXCEPT which of the following?

A) competing in a different geographic market
B) competing in a different product segment
C) competing in a different market segment
D) competing in a different labor market

Question 38

Competitive rivalry exists ONLY when:

A) two or more firms establish their domains and do not challenge each other over those domains.
B) two or more firms compete against one another in pursuit of an advantageous market position.
C) two or more firms compete against international firms in pursuit of the world's dominant market position.
D) a firm is willing to accept its market position without regard to its competitors' intentions.

Question 39

In the global economy,rivalry is intensifying.Consequently:

A) dominant cultures are overwhelming those of emerging nations,making cultural diversity an issue mainly among developed nations.
B) it is becoming more likely that industrialized nations will continue to dominate world markets,overwhelming emerging countries.
C) strong brand names are especially important in opening new markets.
D) only companies with cost-leadership strategies have a competitive advantage.

Question 40

A tactical competitive action involves a significant commitment of specific and distinctive organizational resources.

Question 41

On the whole there are more competitive responses to:

A) strategic actions than to tactical actions.
B) tactical actions than to strategic actions.
C) buyer pressures than to supplier pressures.
D) the demands of the top management team than to industry structural pressures.

Question 42

Goods or services in slow-cycle markets reflect:

A) organizations that serve a mass market.
B) numerous first mover advantages.
C) an inability to sustain a competitive advantage for long periods of time.
D) competitive advantages that are shielded from imitation.

Question 43

A competitive response is a (an):

A) move taken to counter the effects of an action taken by a competitor.
B) move taken to initiate a strategic change in an industry.
C) ineffective action for a firm to pursue.
D) military concept that does not apply to business.

Question 44

Reverse engineering is characteristic of ____.

A) first movers.
B) fast-cycle markets.
C) total quality management.
D) cost-leadership strategies.

Question 45

Walt Disney's focus on ____ is typical of a slow-cycle market.

A) innovation
B) total quality
C) proprietary rights
D) economies of scale

Question 46

Quality involves:

A) either meeting or exceeding customer expectations in the goods and/or services offered.
B) meeting the standards established by ISO 9000.
C) an assured way to gain competitive advantage.
D) an association only with differentiation strategies.

Question 47

All competitive advantages do not accrue to large-sized firms.A major advantage of smaller firms is that ____.

A) they are more likely to have organizational slack
B) they can launch competitive actions more quickly
C) they have more loyal and diverse workforces
D) they can wait for larger firms to make mistakes in introducing innovative products

Question 48

Sustained competitive advantage is most achievable in a ____ market.

A) slow-cycle
B) medium-cycle
C) standard-cycle
D) fast-cycle

Question 49

Which firm's competitive actions are most likely to elicit response and imitation?

A) Firms that have a history as a strategic player that takes risky actions
B) Firms that have a history of complex and unpredictable actions
C) Firms that are price predators
D) Firms that are market leaders

Question 50

Firms with few competitive resources are more likely to:

A) refuse to respond to competitive actions.
B) respond to all competitive actions.
C) respond to tactical actions.
D) respond to strategic actions.

Question 51

Quality is ____ strategic competitiveness.

A) necessary for
B) negatively related to
C) sufficient for
D) not associated with

Question 52

Late movers are those firms:

A) that do respond to a competitive action but only after considerable time has elapsed after the first mover's action and the second mover's response.
B) that respond to a first mover's competitive action often through imitation or a move designed to counter the effects of the action.
C) that take an initial competitive action (either strategic or tactical).
D) that stay in a declining industry.

Question 53

A benefit of being a second mover is:

A) an absence of the need to be the largest firm in the industry.
B) that a firm may be able to respond to first movers' competitive actions while avoiding the risks and development costs experienced by the first movers.
C) the absence of any risk.
D) the ability to lead the industry into new areas of product development and gain customer loyalty from its move.

Question 54

Competitors are more likely to respond to competitive actions that are taken by ____.

A) differentiators
B) larger companies
C) first movers
D) market leaders

Question 55

Companies initiate more competitive responses to ____ actions than to ____ actions.

A) tactical,strategic
B) strategic,tactical
C) business-level strategic,corporate-level strategic
D) business-level strategic,operating-level strategic

Question 56

A company in a ____ is most likely to make heavy use of patents and copyrights.

A) slow cycle
B) medium cycle
C) standard cycle
D) fast cycle

Question 57

As compared to strategic actions,tactical actions usually have a:

A) more delayed effect.
B) greater effect on the overall corporate strategy.
C) well-timed effect on the firm's corporate strategy.
D) more immediate effect.

Question 58

Because Hyundai Motor Company was instituting a drive for manufacturing quality in 1999,competitors could predict ____.

A) that Hyundai viewed quality as a sufficient condition for success
B) that Hyundai was consuming its organizational slack and would encounter financial problems
C) that Hyundai would not simultaneously launch aggressive competitive actions
D) that Hyundai was building for a first-mover advantage

Question 59

Which of the following would be an example of a strategic action?

A) Price cuts by Blockbuster Video
B) Use of product coupons by a local grocer
C) Entry into the European market by Wal-Mart
D) Price increases by Continental Airlines

Question 60

Which of the following is NOT an accurate statement with respect to quality? Quality is:

A) a universal theme in the global economy.
B) a necessary but not sufficient condition for competitive success.
C) in existence when a firm's goods or services meet or exceed customers' expectations.
D) possible when customers support it.

Question 61

What is market commonality?

Question 62

Define slow-cycle,fast-cycle,and standard cycle markets.

Question 63

Define awareness,motivation,and ability in reference to competitive behavior.

Question 64

Which of the following is an example of an organization considered to be in a standard-cycle market?

A) Boeing's airplanes
B) Procter & Gamble
C) Caterpillar's large-scale equipment
D) McIlhenny's Tabasco Sauce

Question 65

Firms will be more loyal to their products in a ____ market than in the other types of markets.

A) standard cycle
B) fast cycle
C) slow cycle
D) medium cycle

Question 66

Name and describe the two types of competitive actions.

Question 67

In order to compete effectively,standard-cycle firms need ____.

A) organizational slack
B) economies of scale
C) first mover capability
D) total quality

Question 68

What is resource similarity?

Question 69

What are the advantages and disadvantages of being a first mover,second mover,and late mover?

Question 70

What factors contribute to the likelihood of a response to a competitive action?