Question 1

Market commonality is concerned with the number of markets with which the firm and a competitor are jointly involved and the degree of importance of the individual markets to each.

Accepted Answer

A) True 
 B)False  True

Question 2

Reverse engineering is characteristic of

Accepted Answer

A)  first movers.
B)  fast-cycle markets.
C)  market leaders.
D)  price predators. B

Question 3

Which of the following is an example of a tactical action?

Accepted Answer

A)  Walmart's launch of Sam's Club stores
B)  Continental Airlines exit from a hub airport in Denver
C)  Netflix beginning to offer music DVDs in addition to movies
D)  Dell's launch of a new line of high performance, custom-made PCs C

Question 4

Firms operating in the same market,offering similar products and targeting similar customers are competitors.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

The answer of Define awareness,motivation,and ability in reference to competitive...

Question 6

In order to compete effectively,standard-cycle firms need all of the following EXCEPT

Accepted Answer

A)  large market share.
B)  customer loyalty through brand name.
C)  careful control of operations to preserve consistency for customers.
D)  rapid and continuous product introductions.

Question 7

Hilliard Pharmaceuticals and Ahrens Vitamins,Inc.,have high market commonality,both geographically and in the market segments in which they compete. Hilliard,the number two firm in the industry,has undertaken a major strategic attack upon Ahrens,the market leader. Which of the following statements is most likely to be TRUE?

Accepted Answer

A)  Ahrens will not respond aggressively since this is a strategic move and not a tactical action.
B)  As the market leader, Ahrens has little to fear from an attack by Hilliard and will not expend organizational slack on a major response.
C)  Ahrens will respond aggressively because of the high multimarket contact between Hilliard and Ahrens.
D)  Ahrens will respond after a long delay as the nutrition supplement industry is a slow-cycle industry.

Question 8

Case Scenario 3: The Pet Food Industry.
The pet food industry is composed 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 provides an example of

Accepted Answer

A)   market commonality.
B)   resource similarity.
C)   multimarket competition.
D)   market commonality, resource similarity, and multimarket competition.

Question 9

The competitive actions and responses in
Markets are designed to seek large market shares,to gain
Customer loyalty through brand names,and to carefully control the firm's operations in order to consistently provide the same positive experience for customers.

Accepted Answer

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

Question 10

A firm that is LEAST likely to launch competitive actions is one that has

Accepted Answer

A)  organizational slack.
B)  advanced research and development.
C)  recently improved the quality of its products.
D)  large size.

Question 11

To be a first mover,the firm must have readily available resources to invest in R&D as well as to rapidly and successfully produce and market a stream of innovative products.

Accepted Answer

A) True 
 B)False

Question 12

A firm is likely to respond to an attack by a competitor in all of the following situations EXCEPT when

Accepted Answer

A)  the attack is by a price predator.
B)  the attack makes the firm's market position less defensible.
C)  the attack damages the firm's ability to use its capabilities.
D)  the attack improves the competitor's market position.

Question 13

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

Question 14

Walmart's aggressive pricing strategy is a strategic action that plays a major role in how it competes.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

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

Question 16

Lobelia's Nursery and Garden Resource Center has long provided high-quality,typical types of seasonal bedding plants to customers in the Mobile,Alabama,metropolitan area. It has traditionally competed with the other plant nurseries within a 50-mile radius of Mobile. Recently,Lobelia has opened a branch in Fairfax,Virginia. Lobelia's research shows that most Fairfax nurseries have only one location. Lobelia can expect the local Fairfax nurseries to

Accepted Answer

A)  be unmotivated to respond because their market position is not threatened by a new competitor from out-of- town.
B)  respond with fierce attacks because of resource dissimilarity.
C)  respond aggressively because of high market dependence.
D)  take no competitive response because of the lack of mutual interdependence among the nurseries.

Question 17

Case Scenario 3: The Pet Food Industry.
The pet food industry is composed 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). Members of the pet food industry are likely to experience

Accepted Answer

A)   no competition.
B)   little competition.
C)   moderate competition.
D)   extensive competition.

Question 18

Bubble-Up,Inc.,is a small manufacturer of educational toys for children under age 10. It has co-existed with three other competitors in the educational toy industry for over 20 years,each of them maintaining a stable market share. There is a wide-spread rumor that Mega-Toy,Inc.,the market leader in the broad children's toy market,has decided to target educational toys. Which of these statements is most likely TRUE?

Accepted Answer

A)  The owners of Bubble-Up are unconcerned about Mega-Toy's entry to the market because of the resource dissimilarity between the firms.
B)  Bubble-Up's greater organizational slack will allow it to aggressively attack Mega-Toy.
C)  Bubble-Up's smaller size may make it more flexible in introducing innovations than Mega-Toy.
D)  Competitive rivalry will not increase for Bubble-Up because Mega-Toy is not dependent on the educational toy market.

Question 19

Extensive market commonality guarantees intense competition in an industry.

Accepted Answer

A) True 
 B)False

Question 20

Case Scenario 1: Romulac, Inc.
Romulac Inc. (RI), a subsidiary of a large successful manufacturing conglomerate, supplies a key component in the assembly of residential cooling systems (air conditioning units, etc.). There has been tremendous consolidation in RI's industry, to the point where only five suppliers of this particular component account for nearly 90 percent of U.S. industry sales. Paralleling this trend, its customers-composed of makers of branded residential air conditioning units like Carrier and Trane-have seen similar levels of consolidation in their own industry. Half of these firms produce all their components in-house, while the balance purchases them from specialized component manufacturers like RI. RI's business is extremely capital intensive, and their 40 percent share of the market allows them to also be the most profitable domestic player. Strong competitors exist in Europe and Asia. Although like RI, these foreign players' strongholds are their home regions, with negligible presence outside of the region. Some of
the larger Asian manufacturers have signaled an interest in more aggressively pursuing the lucrative U.S. market. RI is presently considering a $400 million dollar investment in a new plant, which will create a component that is much quieter, more efficient, and is likely to satisfy future regulatory standards. While the core technology for the new component is very old, RI's engineering and design skills have allowed them to retain their low cost advantage, even though the component will represent a significant improvement over products currently provided by its competition.
-(Refer to Case Scenario 1). Develop an argument as to why RI should try to be a first-mover with this new technology.

Accepted Answer

The answer of Case Scenario 1: Romulac, Inc.
Romulac Inc. (RI),...

Exam 5: Competitive Rivalry and Competitive Dynamics.

Market commonality is concerned with the number of markets with which the firm and a competitor are jointly involved and the degree of importance of the individual markets to each.

Reverse engineering is characteristic of

Which of the following is an example of a tactical action?

Firms operating in the same market,offering similar products and targeting similar customers are competitors.

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

In order to compete effectively,standard-cycle firms need all of the following EXCEPT

The competitive actions and responses in Markets are designed to seek large market shares,to gain Customer loyalty through brand names,and to carefully control the firm's operations in order to consistently provide the same positive experience for customers.

A firm that is LEAST likely to launch competitive actions is one that has

To be a first mover,the firm must have readily available resources to invest in R&D as well as to rapidly and successfully produce and market a stream of innovative products.

A firm is likely to respond to an attack by a competitor in all of the following situations EXCEPT when

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.

Walmart's aggressive pricing strategy is a strategic action that plays a major role in how it competes.

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

Extensive market commonality guarantees intense competition in an industry.