Deck 6: Supporting the Business-Level Strategy: Competitive and Cooperative Moves

Question 1

Bricolage is a situation where a firm faces the same rival in more than one market.

Answer 1

False

Question 2

Mutual forbearance is a situation where rivals do not act aggressively because each recognizes that the other can retaliate in multiple markets.

Answer 2

True

Question 3

Executives who are deciding whether to pursue a disruptive innovation must first make sure that their firm can sustain itself during an initial period of slow growth.

Answer 3

True

Question 4

Instead of trying to outmaneuver its competition, a firm using a blue ocean strategy tries to make the competition irrelevant.

Question 5

Fighting brands prevent devaluation of a firm's established brands.

Question 6

The bricolage strategy, that many executives adopt to compete against a rival, may devalue a firm's brands.

Question 7

Executives routinely use the bricolage strategy to respond to a rival who has introduced a disruptive innovation.

Question 8

Cutting prices to match a rival's lower cost products can be effective in the long-term.

Question 9

The blue ocean strategy involves using whatever materials and resources happen to be available as the inputs into a creative process.

Question 10

First movers must be willing to commit sufficient resources to follow through on their pioneering efforts.

Question 11

The concept of bricolage stresses on firms using innovative strategies for competing in existing markets.

Question 12

If there is a long delay between a competitor's attack and a firm's response, this generally provides the attacker with an edge.

Question 13

Typically, most disruptive innovations are overnight sensations.

Question 14

The three factors that determine the likelihood of a firm responding to a competitive move are awareness, motivation, and capability.

Question 15

First moves that build on strategic resources, such as patented technology, are difficult for rivals to imitate and thus are likely to succeed.

Question 16

Executives apply the concept of bricolage when they combine ideas from existing businesses in order to create a new business.

Question 17

Federal Express' invention of the fast-shipping business is an example of the foothold strategy.

Question 18

A foothold is a small position that a firm intentionally establishes within a market in which it does not yet compete.

Question 19

A fighting brand is a lower-end brand that a firm introduces to try to protect the firm's market share without damaging the firm's existing brands.

Question 20

Johannes Gutenberg's printing press is a classic example of the foothold strategy.

Question 21

Which of the following is true about the first mover strategy?

A) The first mover bears the costs of developing the product and educating customers.
B) Owing to its novel and unique product, a first mover can be sure that customers will embrace its offering.
C) First movers are likely to succeed even without committing resources to follow through on their pioneering efforts.
D) First moves that build on strategic resources are easy for rivals to imitate.
E) First movers typically enjoy an advantage over rivals for about five years.

Question 22

The term co-opetition refers to a blending of competition and cooperation between two firms.

Question 23

Hypercompetition is a situation that involves very rapid and unpredictable moves and countermoves that can undermine competitive advantages.

Question 24

A joint venture is a cooperative arrangement between two or more organizations that does not involve the creation of a new entity.

Question 25

A strategic alliance is a cooperative arrangement between two or more organizations that does not involve the creation of a new entity.

Question 26

A strategic alliance is a cooperative arrangement that involves two or more organizations, each contributing to the creation of a new entity.

Question 27

The partners in a joint venture share decision making authority, control of the operation, and any profits that the joint venture earns.

Question 28

By undercutting rivals on tuition, using data analytics to identify students who are struggling, and relying on low paid adjunct instructors rather than full-time professors, Southern New Hampshire University developed what type of situation?

A) Blue ocean
B) Foothold
C) First mover
D) Disruptive
E) Didactic

Question 29

The bricolage strategy refers to a blending of competition and cooperation between two firms.

Question 30

Apple's creation of a user-friendly small computer in the early 1980s helped fuel a reputation for creativity and innovation that persists today. This is an example of a _____ strategy.

A) co-opetitive
B) foothold
C) bricolage
D) fighting brand
E) first mover

Question 31

A _____ strategy involves creating a new, untapped market rather than competing with rivals in an existing market.

A) blue ocean
B) disruptive
C) foothold
D) fast follower
E) didactic

Question 32

The blue ocean strategy involves blending of competition and cooperation between two firms.

Question 33

Which of the following is true about disruptive innovations?

A) Most disruptive innovations are overnight sensations.
B) Fast followers can easily imitate strategic resources based on disruptive innovations.
C) Typically, a large group of customers embrace a disruptive innovation as it is launched.
D) Disruptive innovations conflict with, and threaten to replace, traditional approaches to competing within an industry.
E) Executives must have sufficient resources on hand to cope with the initial burst of demand for disruptive innovations.

Question 34

Which of the following best describes the foothold strategy?

A) It refers to the idea of creating a new, untapped market rather than competing with rivals in an existing market.
B) It involves combining ideas from existing businesses in order to create a new business.
C) It involves introducing a lower-end brand to protect the firm's market share without devaluating the firm's existing brands.
D) It involves a firm intentionally establishing a small position within a market in which it does not yet compete.
E) Such a strategy conflicts with, and threatens to replace, traditional approaches to competing within an industry.

Question 35

When IKEA enters a new country, it opens just one store. This store is then used as a showcase to establish IKEA's brand. Once IKEA gains brand recognition in a country, more stores are established. This is an example of the _____ strategy.

A) blue ocean
B) disruptive
C) foothold
D) bricolage
E) first mover

Question 36

Co-location occurs when goods and services offered under different brands are located very close to each other.

Question 37

Genentech's early development of biotechnology allowed it to overcome many of the pharmaceutical industry's traditional entry barriers (such as financial capital and distribution networks) and become a profitable firm. This is an example of a _____ strategy.

A) co-opetitive
B) foothold
C) bricolage
D) fighting brand
E) first mover

Question 38

A _____ advantage exists when making the initial move into a market allows a firm to establish a dominant position that other firms struggle to overcome.

A) co-opetitive
B) bricolage
C) first mover
D) hypercompetitive
E) blue ocean

Question 39

Co-opetition is a situation that involves very rapid and unpredictable moves and countermoves that can undermine competitive advantages.

Question 40

A _____ innovation is an innovation that conflicts with, and threatens to replace, traditional approaches to competing within an industry.

A) blue ocean
B) disruptive
C) foothold
D) first mover
E) didactic

Question 41

When online trading emerged in the late 1990s, A.G. Edwards avoided online trading because personal relations with brokerage clients are central to the firm's strategy. Which of the following responses of firms to disruptive innovations does this example illustrate?

A) Focusing on traditional modes of business.
B) Offering lower cost products or services.
C) Entering a strategic alliance with a global player.
D) Developing better product differentiation.
E) Matching the competitor's move.

Question 42

_____ is a situation where a firm faces the same rival in more than one market.

A) Resource-based rivalry
B) Global co-opetition
C) Focused rivalry
D) Multipoint competition
E) Bricolage

Question 43

_____ is one of the three factors that determines the likelihood of a firm responding to a competitive move.

A) Capability
B) Differentiation
C) Focus
D) Fragmentation
E) Integration

Question 44

One Flew South's strategy of locating their high-end restaurant in the Atlanta airport rather than where premier establishments are usually placed - the city center or crowded suburbs, is an example of the _____ strategy.

A) blue ocean
B) disruptive
C) foothold
D) hypercompetitive
E) fighting brand

Question 45

Former General Electric CEO Jack Welch is quoted as describing success in most competitive rivalries as "less a function of grandiose predictions than it is a result of being able to respond rapidly to real changes as they occur. That's why strategy has to be _____ and ________."

A) dynamic and anticipatory
B) predictable and consistent
C) complex and rigid
D) anticipatory and complex
E) dynamic and consistent

Question 46

Which of the following best describes mutual forbearance?

A) It is a situation where a firm faces the same rival in more than one market.
B) It is a situation where rivals launch lower-end brands to protect devaluation of their established brands.
C) It is a situation where competing firms form a cooperative arrangement to ward off third-party competition.
D) It is a situation where rivals do not act aggressively because each recognizes that the other can retaliate in multiple markets.
E) It is a situation where rivals form a strategic alliance without forming a new entity to deal with third-party competition.

Question 47

Kellogg's and General Mills compete fiercely for the breakfast cereal market not only in the United States but in many countries around the world. This is an example of:

A) resource-based rivalry.
B) global co-opetition.
C) focused rivalry.
D) multipoint competition.
E) bricolage.

Question 48

Which of the following best describes multipoint competition?

A) It is a situation where a firm faces the same rival in more than one market.
B) It is a situation where rivals launch lower-end brands to protect devaluation of their established brands.
C) It is a situation where competing firms form a cooperative arrangement to ward off third-party competition.
D) It is a situation where rivals do not act aggressively because each recognizes that the other can retaliate in multiple markets.
E) It is a situation where rivals form a strategic alliance without forming a new entity to deal with third-party competition.

Question 49

Which of the following best describes the blue ocean strategy?

A) A firm using a blue ocean strategy tries to make the competition irrelevant.
B) It involves combining ideas from existing businesses in order to create a new business.
C) It involves introducing a lower-end brand to protect the firm's market share without devaluating the firm's existing brands.
D) It involves a firm intentionally establishing a small position within a market in which it does not yet compete.
E) Such a strategy conflicts with, and threatens to replace, traditional approaches to competing within an industry.

Question 50

Which of the following is true about a firm following the concept of bricolage?

A) It is a small position that a firm intentionally establishes within a market in which it does not yet compete.
B) It is a lower-end brand that a firm introduces to try to protect the firm's market share without devaluating the firm's existing brands.
C) Executives apply the concept of bricolage when they combine ideas from existing businesses in order to create a new business.
D) It refers to an innovation that conflicts with, and threatens to replace, traditional approaches to competing within an industry.
E) It refers to a strategy in which a firm forms a cooperative arrangement with another firm to ward off potential competition.

Question 51

When pursuing a blue ocean strategy, executives try to create and exploit untapped markets rather than competing directly with rivals. Which of the following are examples of blue ocean strategies?

A) Nintendo's Wii
B) Henry Ford's Model T
C) Callaway's Big Bertha club
D) Yellow Tail Wines
E) All of the above

Question 52

Which of the following is a factor that determines the likelihood of a firm responding to a competitive move?

A) Differentiation
B) Awareness
C) Focus
D) Fragmentation
E) Integration

Question 53

In the late 1990s, Southwest Airlines and United Airlines competed in some but not all markets. United's announcement of plans to move into some of Southwest's other routes caused Southwest to publicly threaten retaliation. United then backed down and Southwest had no reason to attack. The result was better performance for both firms. This is an example of _____.

A) resource-based rivalry
B) mutual forbearance
C) global co-opetition
D) focused rivalry
E) hypercompetition

Question 54

Which of the following responses of firms to disruptive innovations carries with it the risk of cannibalization of a firm's traditional business?

A) Focusing on traditional modes of business.
B) Offering lower cost products or services.
C) Entering a strategic alliance with a global player.
D) Developing better product differentiation.
E) Matching the competitor's move.

Question 55

Coffeeshops were once the domain of old men, insomniacs, and urban hipsters. By reinventing coffee shops, Starbucks made the $4 latte a must-have item for college students, businesspeople, and soccer moms. By altering the business model to address the demand of new markets, Starbucks used a ______________ strategy.

A) competitive
B) disruptive
C) foothold
D) reinvention
E) blue ocean

Question 56

Fresh Mornings, a breakfast chain, is known for its old-style potatoes, ham, and egg sandwiches. A rival introduces a new breakfast concept with exotic fruits and sandwiches customers can make themselves that conflicts with the industry's current competitive practices. The owners of Fresh Mornings realize that they may lose some customers to this new concept. But instead of competing by offering the new breakfast concept that the rival has introduced, they decide to stick to and to market their old-style potatoes, ham, and egg sandwiches, which they are famous for. Which of the following responses are they following?

A) Forming a joint venture with another firm.
B) Offering lower cost products or services.
C) Entering a strategic alliance with a global player.
D) Developing better product differentiation.
E) Focusing on traditional modes of business.

Question 57

Monster Mini Golf partnered with the rock band KISS to create a niche for itself by custom-designing a frightfully fun course that features animated KISS and monster props lurking in all 18 fairways. This is an example of the:

A) blue ocean strategy.
B) disruptive strategy.
C) concept of fighting brands.
D) foothold strategy.
E) concept of bricolage.

Question 58

A _____ brand is a lower-end brand that a firm introduces to try to protect the firm's market share without damaging the firm's existing brands.

A) mass
B) value
C) fighting
D) defender
E) niche

Question 59

The printing press is a classical example of the concept of _____.

A) disruptive
B) bricolage
C) foothold
D) hypercompetitive
E) fighting brand

Question 60

Cigarette makers R.J. Reynolds (RJR) and Philip Morris square off not only in the United States but in many countries around the world. This is an example of:

A) resource-based rivalry.
B) global co-opetition.
C) focused rivalry.
D) multipoint competition.
E) bricolage.

Question 61

When goods and services offered by two or more organizations under different brands are stationed very close to each other:

A) hypercompetition always takes place.
B) a consortium is formed.
C) co-opetition occurs.
D) co-location occurs.
E) a joint venture is formed.

Question 62

When threatened with cheaper microprocessors from firms like AMD, Intel launched Celeron for retaining the lower-end of the chip market without devaluing its existing brand, Intel. Celeron is an example of a _____ brand.

A) mass
B) value
C) fighting
D) defender
E) niche

Question 63

A _____ is a cooperative arrangement that involves two or more organizations each contributing to the creation of a new entity.

A) strategic alliance
B) consortium
C) tactical association
D) cloud system
E) joint venture

Question 64

A _____ simply involves two or more firms collaborating, as opposed to creating a new entity together.

A) strategic alliance
B) consortium
C) tactical association
D) cloud system
E) joint venture

Question 65

Auto malls that contain several different car dealerships are found in many areas. This is an example of _____.

A) co-opetition
B) a strategic alliance
C) a joint venture
D) co-location
E) a consortium

Question 66

Which of the following is true about a fighting brand?

A) Firms launch fighting brands to protect their market share.
B) A fighting brand is usually a higher-end brand.
C) Firms fix prices of a fighting brand above the price of their established brands.
D) Firms launch fighting brands during times of economic boom.
E) A fighting brand leads to devaluation of a firm's established brands.

Question 67

In many cities, theatres and art galleries are clustered together in one neighborhood. This is an example of _____.

A) co-opetition
B) a strategic alliance
C) a joint venture
D) co-location
E) a consortium

Question 68

Ray Noorda, the founder of software firm Novell, coined the term _____.

A) co-location
B) frienemies
C) tactical alliance
D) co-opetition
E) friendly fire

Question 69

The term _____ refers to a blending of competition and cooperation between two firms.

A) co-location
B) joint venture
C) tactical alliance
D) co-opetition
E) friendly fire

Question 70

Exom and Royshe are two oil and natural gas exploration and production companies. They created a new entity, CalEner, for oil exploration in California. The two parent companies remained separate. CalEner is an example of a _____.

A) tactical alliance
B) consortium
C) strategic association
D) cloud system
E) joint venture

Question 71

NEC (a Japanese electronics company) has three different relationships with Hewlett-Packard Co.: customer, supplier, and competitor. Some units of each company work cooperatively with the other company, while other units are direct competitors. This is an example of _____.

A) co-location
B) joint survival
C) a joint venture
D) co-opetition
E) a friendly alliance

Question 72

A strategic alliance differs from a joint venture in that a strategic alliance:

A) occurs when goods and services offered by two or more organizations under different brands are located very close to each other.
B) is a cooperative arrangement that involves two or more organizations sharing only control of the operations.
C) is a cooperative arrangement between two or more organizations that does not involve the creation of a new entity.
D) refers to a blending of competition and cooperation between two firms.
E) is a cooperative arrangement that involves two or more organizations, each contributing to the creation of a new entity.

Question 73

In June 2011, Twitter and Yahoo! Japan entered into a cooperative arrangement that involves relevant Tweets appearing within various functions offered by Yahoo! Japan. This arrangement did not involve creation of a new entity. Such a cooperative arrangement is an example of a _____.

A) strategic alliance
B) consortium
C) tactical association
D) cloud system
E) joint venture

Question 74

In January 2011, Merck and PAREXEL International Corporation announced a cooperative arrangement for collaboration on biotechnology efforts known as biosimilars. This arrangement did not involve creation of a new entity. Such cooperative arrangements are examples of _____.

A) strategic alliances
B) consortiums
C) tactical associations
D) cloud systems
E) joint ventures

Question 75

The partners in a _____ share decision making authority, control of the operation, and profits earned.

A) tactical alliance
B) consortium
C) strategic association
D) cloud system
E) joint venture

Question 76

A joint venture:

A) occurs when goods and services offered by two or more organizations under different brands are located very close to each other.
B) is a cooperative arrangement that involves two or more organizations sharing only control of the operations.
C) is a cooperative arrangement between two or more organizations that does not involve the creation of a new entity.
D) refers to a blending of competition and cooperation between two firms.
E) is a cooperative arrangement that involves two or more organizations, each contributing to the creation of a new entity.

Question 77

Co-location differs from co-opetition in that co-location:

A) occurs when goods and services offered by two or more organizations under different brands are stationed very close to each other.
B) refers to a cooperative arrangement that involves two or more organizations sharing only control of the operations.
C) refers to a cooperative arrangement between two or more organizations that does not involve the creation of a new entity.
D) occurs when there is a blending of competition and cooperation between two closely located firms.
E) refers to a cooperative arrangement that involves two or more organizations, each contributing to the creation of a new entity.

Question 78

A _____ is a cooperative arrangement between two or more organizations that does not involve the creation of a new entity.

A) strategic alliance
B) consortium
C) tactical association
D) cloud system
E) joint venture

Question 79

In what ways did the Toyota and General Motors joint operation, New United Motor Manufacturing Incorporated, benefit the two firms?

A) NUMMI offered Toyota a lower-risk means of entering the U.S. market
B) The venture offered GM the chance to learn Japanese management
C) The venture offered GM the chance to learn Japanese production techniques
D) NUMMI offered both GM and Toyota economies of scale in manufacturing
E) All of the above

Question 80

All of the following are examples of risks that companies open themselves up to when they choose to enter into cooperative relationships except:

A) Loss of control over operations.
B) Leaking of valuable secrets to other companies.
C) Being taken advantage of by partners.
D) All of the above are potential risks.
E) A and C