Question 1

____ markets are often described as volatile and innovative.

Accepted Answer

A)  Slow-cycle 
B)  Fast-cycle 
C)  Standard-cycle 
D)  Sheltered

Question 2

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

Accepted Answer

A)  A "two movies for the price of one" campaign by Redbox 
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 3

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 4

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

Accepted Answer

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

Question 5

The satellite dish at Faye's weekend home has malfunctioned. When she calls to have the dish repaired, the service representative tells her that the dish is obsolete and that parts for it are no longer made. Faye must replace the old dish with a new dish. This is an example of lack of firm loyalty to a product in a fast-cycle market.

Accepted Answer

A) True 
 B)False

Question 6

Firms with high market commonality and highly similar resources are direct and mutually acknowledged competitors.

Accepted Answer

A) True 
 B)False

Question 7

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 8

Patent laws and regulatory requirements such as required FDA (Food and Drug Administration) approval to launch new products shield pharmaceutical companies' positions in this slow-cycle market.

Accepted Answer

A) True 
 B)False

Question 9

A strategy's success is determined not only by the firm's initial competitive actions but also by how well it anticipates competitors' responses to them and by how well the firm anticipates and responds to its competitors initial actions.

Accepted Answer

A) True 
 B)False

Question 10

Firms with ______ market commonality and _____ resource similarity are direct and mutually acknowledged competitors.

Accepted Answer

A)  low; high 
B)  low; low 
C)  high; high 
D)  high; low

Question 11

It is more likely that locally owned, one-location cafes in a small town will respond more rapidly to tactical actions by each other than they will to strategic actions by the Burger King franchise that has recently moved to their town.

Accepted Answer

A) True 
 B)False

Question 12

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 13

Disney is an example of a firm in a slow-cycle market because its animated characters are shielded from imitation by copyrights and trademarks.

Accepted Answer

A) True 
 B)False

Question 14

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

Question 15

Competitive rivalry is the set of competitive actions and responses that occur among firms as they maneuver for an advantageous market position.

Accepted Answer

A) True 
 B)False

Question 16

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 17

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 in addition to movies 
D)  Dell's launch of a new line of high performance, custom-made PCs

Question 18

Two firms, such as Fed Ex and UPS that have similar resources and common markets would be direct and mutually acknowledged competitors.

Accepted Answer

A) True 
 B)False

Question 19

Akamai Technologies is a dominant player in the content delivery network (CDN) market. Akamai is not very diversified (i.e., is dependent on the CDN market). If rival CDN providers such as Limelight Networks and Level 3 Communications lower their basic CDN service prices, what would be Akamai's likely response?

Accepted Answer

A)  Raise its prices 
B)  Do nothing since it is the market leader 
C)  Exit the industry 
D)  Lower its prices

Question 20

Which of the following is TRUE of Southwest Airlines?

Accepted Answer

A)  Southwest has an unusually low amount of flexibility for a large firm. 
B)  Southwest's success is largely due to the fact it has little market commonality with other airlines. 
C)  Decision-making responsibility is centered at its Dallas headquarters, which allows the firm to respond quickly to competitive attacks. 
D)  Southwest's advantage lies in its ability to "think small."

Exam 5: Competitive Rivalry and Competitive Dynamics

____ markets are often described as volatile and innovative.

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

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

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

Firms with high market commonality and highly similar resources are direct and mutually acknowledged competitors.

The chief disadvantage of being a first mover is the:

Patent laws and regulatory requirements such as required FDA (Food and Drug Administration) approval to launch new products shield pharmaceutical companies' positions in this slow-cycle market.

A strategy's success is determined not only by the firm's initial competitive actions but also by how well it anticipates competitors' responses to them and by how well the firm anticipates and responds to its competitors initial actions.

Firms with __ market commonality and _ resource similarity are direct and mutually acknowledged competitors.

It is more likely that locally owned, one-location cafes in a small town will respond more rapidly to tactical actions by each other than they will to strategic actions by the Burger King franchise that has recently moved to their town.

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.

Disney is an example of a firm in a slow-cycle market because its animated characters are shielded from imitation by copyrights and trademarks.

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.

Competitive rivalry is the set of competitive actions and responses that occur among firms as they maneuver for an advantageous market position.

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

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

Two firms, such as Fed Ex and UPS that have similar resources and common markets would be direct and mutually acknowledged competitors.

Which of the following is TRUE of Southwest Airlines?