Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Often, successful imitation of the first mover's innovations allows the second mover to avoid the mistakes and major investments of the first mover.

Accepted Answer

A) True 
 B)False

Question 3

Bayou Belle Water markets water drawn only from a single artesian well in Southern Louisiana. It has a loyal following in its region. Since Bayou Belle markets the water, just as Coca-Cola, Nestle, and PepsiCo do, Bayou Belle has high resource similarity with these international firms.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A)  a "two movies for the price of one" campaign by Blockbuster Video 
B)  use of product coupons by a local grocer 
C)  entry into the European market by Home Depot 
D)  fare increases by Southwest Airlines

Question 5

In the The Chapter 5 Strategic Focus, rivals (Amazon, Oracle, HP and Dell) in the cloud computing market have competitive advantages that are __________________.

Accepted Answer

A)  shielded from imitation 
B)  partially shielded from imitation 
C)  sustainable for long periods of time 
D)  not shielded from imitation

Question 6

A firm with a reputation as a price predator (an actor that frequently reduces prices to gain or maintain market share) generates few responses to its pricing tactical actions.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

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

Question 8

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 9

Case Scenario 2: Plasco.
Plasco is a $3 billion U.S.-based manufacturer of flexible plastic products like trash cans, reheatable and freezable food containers, and a broad range of other plastic storage containers designed for home and office use. Historically, Plasco has been the category killer for most of its products and has devoted tremendous resources to new product development on an ongoing basis - this research intensity has allowed the company to release, on average, a new product every day over the past five years. Despite its past strength and high brand awareness, Plasco's profitability has been eroded by dramatic increases in the cost of plastic resin, the primary input into its plastic products. Moreover, the retail channel has experienced rapid consolidation resulting in a shift in the balance of power from branded manufacturers like Plasco, to strong retailers like Wal-Mart, who in turn have been unwilling to help Plasco absorb the higher resin costs. Enhancing Wal-Mart's power is the fact that it can always turn to alternative high-volume sources of consumer plastic products like Sterlite. Further hampering Plasco's recovery is the emergence of feisty little foreign competitors like Zig Industries, a $250 million Israeli firm that has begun to take part of Plasco's market share in plastic toolboxes. Ironically, Plasco was the first company to offer plastic toolboxes some 20 years ago. This innovation changed the market dramatically and Plasco's first mover strategy rewarded it with a rapidly growing new segment and a dominant market position. Today, Plasco's toolboxes are viewed as rather boring, while Zig's products are ingeniously designed to catch the customer's eye in the aisle (better merchandising the product) and capture their interest (and pocketbook) with many new and novel features. Zig is also able to provide this new line of toolboxes at between 10% to 15% less than Plasco.
-(Refer to Case Scenario 2) Is the toolbox business a slow-, standard-, or fast-cycle business?

Accepted Answer

The answer of Case Scenario 2: Plasco.
Plasco is a $3...

Question 10

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 11

Which of the following statements is FALSE?

Accepted Answer

A)  First movers tend to take higher risks than second and later movers. 
B)  First movers tend to have significantly higher revenues than second movers. 
C)  First movers have lower survival rates than second and late movers. 
D)  First movers tend to have more organizational slack than later movers.

Question 12

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

Accepted Answer

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

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Firms are likely to imitate the actions of a competitor that is noted for risky, complex, and unpredictable behavior because this is a way to imitate unobservable core competencies.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

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

Question 16

Which company below committed significant resources to enter the information services market and, given its success, was imitated by other competitors?

Accepted Answer

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

Question 17

Quality affects competitive rivalry because a competitor whose products suffer from poor quality likely will _____________ until ________________.

Accepted Answer

A)  initiate more competitive actions; the firm returns to profitability 
B)  initiate fewer competitive actions; the quality problems are corrected 
C)  initiate more competitive actions; the quality problems are corrected 
D)  advertise more; customers believe the quality had improved

Question 18

Without quality, the firm's products

Accepted Answer

A)  can compete effectively on the basis of low price. 
B)  lack credibility among customers. 
C)  must be exported to developing countries, because they are not competitive in the U.S. or developed countries. 
D)  are associated with predatory competition.

Question 19

Among the drivers of competitive actions and responses, motivation refers to the perceived gains that will result from a firm which initiates an attack. If a firm perceives that its position will improve, it is more likely to attack.

Accepted Answer

A) True 
 B)False

Question 20

In general, strategic actions elicit fewer competitive responses than do tactical actions.

Accepted Answer

A) True 
 B)False

Exam 5: Competitive Rivalry and Dynamics

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

Often, successful imitation of the first mover's innovations allows the second mover to avoid the mistakes and major investments of the first mover.

Bayou Belle Water markets water drawn only from a single artesian well in Southern Louisiana. It has a loyal following in its region. Since Bayou Belle markets the water, just as Coca-Cola, Nestle, and PepsiCo do, Bayou Belle has high resource similarity with these international firms.

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

In the The Chapter 5 Strategic Focus, rivals (Amazon, Oracle, HP and Dell) in the cloud computing market have competitive advantages that are __________________.

A firm with a reputation as a price predator (an actor that frequently reduces prices to gain or maintain market share) generates few responses to its pricing tactical actions.

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

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.

Which of the following statements is FALSE?

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

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

Firms are likely to imitate the actions of a competitor that is noted for risky, complex, and unpredictable behavior because this is a way to imitate unobservable core competencies.

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

Which company below committed significant resources to enter the information services market and, given its success, was imitated by other competitors?

Quality affects competitive rivalry because a competitor whose products suffer from poor quality likely will _ until ____.

Without quality, the firm's products

Among the drivers of competitive actions and responses, motivation refers to the perceived gains that will result from a firm which initiates an attack. If a firm perceives that its position will improve, it is more likely to attack.

In general, strategic actions elicit fewer competitive responses than do tactical actions.