Deck 2: Strategy, Competitive Forces and Positioning

Question 1

What is part of a firm's business environment?

A) market environment
B) legal frameworks
C) institutional structures
D) all of these

Answer 1

D

Question 2

Strategists refer to ______ as factors shaping ______ for the organization's goods and services in the environments in which the organization operates.

A) properties/demand
B) demand drivers/demand
C) technology drivers/goals
D) properties/objectives

Answer 2

B

Question 3

______ are relationships with other entities, such as competing firms or government.

A) Competitive relationships
B) Horizontal relationships
C) Thorough relationships
D) Vertical relationships

Answer 3

B

Question 4

______ are about the management of suppliers and buyers.

A) Vertical relationships
B) Horizontal relationships
C) Governmental relationships
D) Institutional relationships

Question 5

______ takes an external perspective and is concerned with the industry within which firms operate and behave as producers, sellers and buyers of goods and services.

A) Resource-based view
B) Value chain
C) Industrial organization
D) Macro economics

Question 6

According to industrial organization theory, which factor does NOT influence market structure?

A) supply conditions
B) demand for a product
C) manufacturing base of the leading firm
D) the degree of differentiation of products

Question 7

______ refers to the characteristics of the product and is the way through which firms improve the quality of their offerings over time (usually by means of innovation).

A) Product differentiation
B) Augmented product
C) Core product
D) Product development

Question 8

What do we call firms that invest in a variety of different product markets to reduce exposure to risk in single product markets?

A) investment firms
B) diversified firms
C) monopolies
D) oligopolies

Question 9

National, regional and local governments, as well as economic or political unions like the European Union (EU) or the North American Free Trade Agreement (NAFTA), often enforce regulations that can do which of the following?

A) guide and restrict competition
B) impose taxes and subsidies
C) regulate employment
D) all of these

Question 10

Michael Porter (1980, 1985) suggested that factors such as initial capital requirements, the threat of price-cutting by established firms and the level of product differentiation represent ______ for new-firm entrants into markets.

A) barriers to entry
B) opportunities
C) market ideas
D) threats

Question 11

The concentration among competing players in a market and the extent to which one or a few large producers dominate this market helps us understand what?

A) the degree of governmental intervention
B) whether competing in a market is economically and strategically profitable
C) the capital that needs to be invested by the market follower
D) none of these

Question 12

In the global airline industry a firm may have many choices as to which segments to compete in. However, this also means it will be more difficult for the firm to find a ______.

A) partner
B) niche segment
C) network
D) profitable competitive position

Question 13

Business objectives might relate to:

A) maximization of profits
B) increasing sales revenues
C) growth in market share
D) all of these

Question 14

The acronym S-C-P refers to:

A) market structures, firm conduct and firm performance
B) synergies, customized products and performance
C) systematic screening, co-evolution of needs and profitability
D) strategy, competitive advantage and profitability

Question 15

Strategic ______ are decisions made by the top management team with respect to important factor conditions such as markets and technology.

A) avenues
B) choices
C) possibilities
D) imperatives

Question 16

What term is used to refer to conditions when one party has superior information to the other party, creating an imbalance of power, as the better-informed party gains strategic advantage?

A) power asymmetry
B) imbalanced market dynamics
C) asymmetry of information
D) information overload

Question 17

How can firm performance affect market structure?

A) The best performing firms can dominate the market in the long term by setting standards for prices.
B) The best performing firms can have exclusive access to key resources.
C) Firm performance cannot affect market structure.
D) Both the best performing firms can dominate the market in the long term by setting standards for prices and can have exclusive access to key resources.

Question 18

The S-C-P concept enables a firm to do what?

A) identify opportunities for a business, especially if it is planning to enter into an industry as a new player
B) help determine if an industry is attractive enough to remain competing in
C) gain competitive advantage by differentiating its products or services
D) all of these

Question 19

Sustainable competitive advantage is what allows a firm to maintain and improve its ______ in a market against competitors in the long term.

A) competitive position
B) profitability
C) environmental sustainability
D) corporate social responsibility

Question 20

______ is the situation where an organization earns above market returns.

A) Market returnability
B) Economic rent
C) Financial capacity
D) Market dominance

Question 21

Barnett and McKendrick argue that differences in competitive performance within an industry can be attributed to ______ such as ______.

A) external phenomena/wars
B) networks/governments
C) organizational attributes/firm size
D) events/sponsorships

Question 22

Which is NOT part of a PESTEL analysis?

A) environmental
B) economic
C) electoral
D) social

Question 23

Which are parts of the macro-economic factors influencing firms?

A) exchange rates
B) business cycles
C) economic growth rates
D) all of these

Question 24

Sociocultural macro-environmental influences incorporate:

A) changing cultures and demographics
B) urbanism
C) gender relations
D) all of these

Question 25

Legal macro-environmental influences incorporate:

A) legislative constraints such as health and safety legislation
B) equal opportunity directives
C) both legislative constraints such as health and safety legislation and equal opportunity directives
D) none of these

Question 26

Market ______ describes the state of a market with respect to competition.

A) structure
B) process
C) dynamism
D) all of these

Question 27

Which of the following is NOT one of the basic market structures?

A) the homogeneous or pure market
B) the monopoly
C) the oligopoly
D) the duopoly

Question 28

In a homogeneous or pure market, what is it relatively easy for a firm to do?

A) imitate success almost immediately
B) conquer the market
C) gain access to capital
D) all of these

Question 29

In a pure market, the only distinguishing variable that a firm can use to its advantage is ______.

A) product superiority
B) relative price
C) technological know-how
D) none of these

Question 30

______ is characterized by a ______ number of players acting in relatively predictable and coordinated ways to supply products and services.

A) Oligopoly/limited
B) Free market economy/limited
C) Duopoly/large
D) Free market economy/huge

Question 31

______ occurs when competitors within an industry cooperate illegally for mutual benefit.

A) Collusion
B) Bribery
C) Corruption
D) None of these

Question 32

______ depicts a market in which the sources of competitive advantage can change quickly, and maintaining above-average profits over a long time is difficult.

A) hypercompetition
B) low-level competition
C) high-level competition
D) oligopoly

Question 33

Which force is NOT part of Porter's five forces model?

A) deregulation
B) globalization
C) deregulation and globalization
D) barriers to entry

Question 34

______ is an economic term used to describe a situation where a firm's assets are highly specialized and, therefore, cannot easily be sold to other buyers in another industry.

A) asset specificity
B) asset allocation
C) asset dominance
D) asset toxicity

Question 35

______ are a group of firms in the same industry that follow the same, or similar, strategies.

A) strategic partners
B) cooperating firms
C) strategic groups
D) strategic networks

Question 36

What is NOT part of Porter's generic strategies?

A) diversification
B) cost leadership
C) focus
D) differentiation