Question 1

Discuss why timing of strategic moves is important.

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Question 2

Identify and briefly discuss two "best targets" for offensive attacks by companies.

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Question 3

In which of the following instances is being a first-mover NOT particularly advantageous?

Accepted Answer

A)  when moving first with a preemptive strike makes imitation difficult or unlikely 
B)  when first-time buyers remain strongly loyal to pioneering firms in making repeat purchases 
C)  when early commitments to new technologies, types of components, or emerging distribution channels produce an absolute cost advantage over rivals 
D)  when markets are slow to accept the innovative product offering of a first-mover, and fast followers possess sufficient resources and marketing muscle to overtake a first-mover 
E)  when being a pioneer helps build a firm's image and reputation with buyers

Question 4

A primary reason for why mergers and acquisitions sometimes fail is due to the

Accepted Answer

A)  misinterpretation of the cultural differences, like employee disenchantment and low morale, differences in management styles and operating procedures, and operations integration decision mistakes. 
B)  execution of functional and integration activity, while sustaining and capitalizing on the combined sources of revenue. 
C)  development of effective integration plans conducive to employee satisfaction. 
D)  advertising message detailing the merger announcement. 
E)  creation of management-employee programs in order to foster better communication.

Question 5

First-mover disadvantages (or late-mover advantages) rarely ever arise when

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A)  the costs of pioneering are much higher than being a follower and only negligible learning/experience curve benefits accrue to the pioneer. 
B)  rapid market evolution gives fast followers an opening to leapfrog the pioneer with next-generation products of their own. 
C)  the pioneer's products are somewhat primitive and do not live up to buyer expectations, allowing clever followers to win disenchanted buyers with better-performing products. 
D)  the marketplace is skeptical about the benefits of a new technology or product being pioneered by a first-mover. 
E)  the market response is strong and the pioneer gains a monopoly position that enables it to recover its investment.

Question 6

What are the purpose of defensive strategies? Give at least two examples of defensive moves.

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Question 7

The range of product and service segments that the firm serves within its market is known as the firm's

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A)  horizontal scope. 
B)  vertical integration. 
C)  vertical scope. 
D)  product outsourcing. 
E)  joint venture partnership.

Question 8

Which of the following signals would NOT warn challengers that strong retaliation is likely?

Accepted Answer

A)  Publicly announcing management's commitment to maintain market share 
B)  Publicly committing to a company policy of matching competitors' terms or pricing 
C)  Maintaining a war chest of cash and marketable securities 
D)  Making a strong counter-response to the moves of weak competitors 
E)  Announcing strong quarterly earnings potential to financial analysts

Question 9

What are the strategic advantages of a forward vertical integration strategy?

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Question 10

An alliance becomes "strategic" as opposed to just a convenient business arrangement when it serves all of the following strategic purposes EXCEPT

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A)  builds, sustains, or enhances a core competence or competitive advantage. 
B)  blocks a competitive threat. 
C)  increases the bargaining power of alliance members over suppliers or buyers. 
D)  opens up important new market opportunities. 
E)  contracts out certain value chain activities that are normally performed in-house to outside vendors.

Question 11

What is the goal of signaling a challenger that strong retaliation is likely in the event of an attack?

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A)  to alleviate their fears by committing to reduce the costs of value chain activities 
B)  to cause the challenger to begin the attack instead of waiting 
C)  to dissuade challengers from attacking or diverting them into using less threatening options 
D)  to create collaborative relationships with challengers 
E)  to insulate other firms from adverse impacts resulting from the challenge

Question 12

The two most compelling reasons for a company to pursue vertical integration (either forward or backward) are to

Accepted Answer

A)  strengthen the company's competitive position and/or boost its profitability. 
B)  achieve product differentiation and/or lengthen the company's value chain to include more activities performed in-house and thereby gain greater ability to reduce internal operating costs. 
C)  broaden the firm's product line and/or avoid the need for outsourcing. 
D)  expand into foreign markets and/or control more of the industry value chain. 
E)  enable use of offensive strategies and/or gain a first-mover advantage over rivals in revamping the industry value chain.

Question 13

What are mergers and/or acquisitions? How do they contribute to enhancing a company's position?

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Question 14

What are the merits of strategic alliances and collaborative partnerships for companies racing to seize opportunities in an industry of the future? Under what circumstances do they make sense? How do they contribute to competitive advantage?

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Exam 6: Supplementing the Chosen Competitive Strategy: Other Important Business Strategy Choices