Question 1

Carl has just graduated with a management degree. He has a good understanding of his personal strengths and weaknesses and knows he would fit best in a stable organizational environment. In his job search, Carl should target firms in slow-cycle markets.

Accepted Answer

A) True 
 B)False  True

Question 2

Which pair of firms has the LEAST resource similarity?

Accepted Answer

A)   McDonalds and Microsoft
B)   Target and Wal-Mart
C)   HP and Dell
D)   FedEx and UPS A

Question 3

The need for quality products and services is so high that quality alone can assure a firm that it will achieve strategic competitiveness and earn above-average returns.

Accepted Answer

A) True 
 B)False  False

Question 4

Which PC maker has historically benefited the most from its reputation?

Accepted Answer

A)   Compaq
B)   IBM
C)   HP
D)   Dell

Question 5

Because Coca-Cola, Nestle, and PepsiCo all sell a product (bottled water) that is essentially the same and all three giant companies are engaged in battles for market share using incremental changes in their products and seeking loyalty to brand names, it is most likely that the bottled water market is a(an)

Accepted Answer

A)   slow-cycle market
B)   standard cycle market.
C)   fast-cycle market.
D)   intermediate-cycle market.

Question 6

Late movers are those firms that

Accepted Answer

A)   wait to act for a long period of time after the second movers have responded.
B)   respond to a first mover's competitive action often through imitation or a move designed to counter the effects of the action.
C)   take an initial competitive action (either strategic or tactical) .
D)   typically achieve higher-than-average returns because they can imitate the most efficient actor.

Question 7

Lawsuits over patent and copyright infringements are more common and intense in

Accepted Answer

A)   fast-cycle markets because the market is innovation-driven.
B)   standard-cycle markets because the firm's brand name is such an important competitive advantage.
C)   slow-cycle markets, because of the ability to shelter the company from imitation of its competitive advantage.
D)   standard-cycle markets because innovation is rare, and so gives the innovating firm a significant competitive advantage.

Question 8

On the whole there are more competitive responses to

Accepted Answer

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 9

Unlike fast-cycle markets, the struggle for market share in standard-cycle markets is moderate.

Accepted Answer

A) True 
 B)False

Question 10

Competitive dynamics refers to the

Accepted Answer

A)   circumstances in which competitors are aware of the degree of their mutual interdependence resulting from market commonality and resource similarity.
B)   set of competitive actions and competitive responses the firm takes to build or defend its competitive advantages and to improve its market position.
C)   total set of actions and responses taken by all firms competing within a market.
D)   ongoing set of competitive actions and competitive responses between competitors as they maneuver for advantageous market position.

Question 11

The drivers of competitive behavior are awareness of the competitor, motivation to take action or respond, and the organization's ability in terms of resources and flexibility.

Accepted Answer

A) True 
 B)False

Question 12

____ and ____ describe the situation in which organizations are direct competitors and are fully aware of the competition.

Accepted Answer

A)   High market commonality, high resource similarity
B)   High market commonality, low resource similarity
C)   Low market commonality, high resource similarity
D)   Low market commonality, low resource similarity

Question 13

The chief disadvantage of being a first mover is the

Accepted Answer

A)   high degree of risk.
B)   high level of competition in the new marketplace.
C)   inability to earn above-average returns unless the production process is very efficient.
D)   difficulty of obtaining new customers.

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

The benefits of being a first mover are most substantial in fast cycle markets.

Accepted Answer

A) True 
 B)False

Question 16

Which industry can be LEAST described as a slow cycle market?

Accepted Answer

A)   Freight railroads
B)   Pharmaceuticals
C)   Cell phone provider
D)   Private ownership of highways and bridges

Question 17

Case Scenario 3: The Pet Food Industry.
The pet food industry is comprised primarily of six market segments: dry dog food, dry cat food, moist dog food, moist cat food, canned dog food, and canned cat food. Five large firms dominate the market and each has some market share in all segments, and the leading share in at least one segment. The largest firm participates solely in the pet food industry, while the next four firms are actually subsidiaries of some of the world's largest food and consumer products companies. Top management of these larger firms have made public statements that suggest they each see themselves as future leaders of the pet food industry. All five have acquired comparable skills in terms of manufacturing and marketing. Two small firms also participate in the industry, but these players are relatively weak and compete in just two of the six segments; the pet food industry is the only industry in which they operate. Inputs to the industry are basic commodities and there is no real threat of substitute products except across segments and price points. The industry is growing slowly, barely keeping up with the rate of inflation. Barriers to entry are enormous when pet food companies can gain scale economies in production coupled with aggressive marketing, though even then these coordinated actions may only yield average industry profitability. Any firm can increase its market share only to the extent that another firm's share is decreased.
-(Refer to Case Scenario 3) The pet food industry is best characterized as an example of

Accepted Answer

A)   slow-cycle markets.
B)   standard-cycle markets.
C)   fast-cycle markets.
D)   neither slow-cycle, standard-cycle, nor fast-cycle markets.

Question 18

Traditionally, the music industry signed multi-year contracts with artists and sold copyright protected music through established distribution channels. A shift to the digital format and the rise of Internet technology has resulted in the sharing of music over peer-to-peer networks, a practice the industry called "piracy." In recent years, the music industry has seen a rapid decline in the number of CDs sold. At the same time, the ownership of the distribution rights of musical content under copyright laws remains clear. Attempts at innovation by individual record labels to offer music as direct downloads to consumer are quickly copied by other labels. Based on these factors, the best assessment is that the music industry has shifted from a ____ to a ____ cycle market.

Accepted Answer

A)   slow; fast
B)   slow; standard
C)   standard; slow
D)   standard; fast

Question 19

Sustained competitive advantage is most achievable in a ____ market.

Accepted Answer

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

Question 20

Multimarket competition occurs when firms

Accepted Answer

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.

Exam 5: Competitive Rivalry and Competitive Dynamics

Carl has just graduated with a management degree. He has a good understanding of his personal strengths and weaknesses and knows he would fit best in a stable organizational environment. In his job search, Carl should target firms in slow-cycle markets.

Which pair of firms has the LEAST resource similarity?

The need for quality products and services is so high that quality alone can assure a firm that it will achieve strategic competitiveness and earn above-average returns.

Which PC maker has historically benefited the most from its reputation?

Late movers are those firms that

Lawsuits over patent and copyright infringements are more common and intense in

On the whole there are more competitive responses to

Unlike fast-cycle markets, the struggle for market share in standard-cycle markets is moderate.

Competitive dynamics refers to the

The drivers of competitive behavior are awareness of the competitor, motivation to take action or respond, and the organization's ability in terms of resources and flexibility.

and describe the situation in which organizations are direct competitors and are fully aware of the competition.

The chief disadvantage of being a first mover is the

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

The benefits of being a first mover are most substantial in fast cycle markets.

Which industry can be LEAST described as a slow cycle market?

Sustained competitive advantage is most achievable in a ____ market.

Multimarket competition occurs when firms