Deck 6: Competitive Rivalry and Competitive Dynamics Emea Edition

Question 1

Quality is a universal theme and is a necessary, but not a sufficient, condition for competitive success.

Answer 1

True

Question 2

Two firms that have similar resources, but do not share markets would not be direct and mutually acknowledged competitors.

Answer 2

True

Question 3

Large firms are likely to initiate more competitive actions along with more strategic actions during a given period.

Answer 3

True

Question 4

A lack of awareness leads to a reduction in competition.

Question 5

Competitive rivalry is the contest to be the first mover in an international market.

Question 6

In general, small firms are more likely than large firms to launch competitive actions and tend to do it more quickly.

Question 7

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

Question 8

The benefits of being a first mover are most substantial in fast cycle markets.

Question 9

Without available resources (such as financial capital and people), the firm lacks the ability to attack a competitor or respond to its actions.

Question 10

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

Question 11

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

Question 12

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 competitor's initial actions.

Question 13

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.

Question 14

Intensified rivalry within an industry results in decreased average profitability for the firms within it.

Question 15

A competitive action is a strategic or tactical action taken by a firm to gain or defend a competitive advantage or improve its market position.

Question 16

Research suggests that a firm with greater multimarket contact is less likely to initiate an attack, but more likely to respond aggressively when attacked.

Question 17

Firms that are typically late movers usually have little organizational slack.

Question 18

The drivers of competitive behavior are awareness of the competitor, motivation to take action or respond, and the organization's ability in terms of resources and flexibility.

Question 19

Competitive dynamics refers to the total set of actions and responses taken by all firms competing within a market.

Question 20

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.

Question 21

Both ____ and ____ affect the awareness and motivation of a firm to undertake actions and responses.

A) first-mover advantages, corporate size
B) market commonality, resource similarity
C) management capabilities, competitive analysis
D) speed of management decisions, management actions

Question 22

Competitive rivalry has the most effect on the firm's ____ strategies than the firm's other strategies.

A) business-level
B) corporate-level
C) acquisition
D) international

Question 23

Competitive dynamics refers to the

A) circumstances in which competitors are aware of the degree of their mutual interdependence resulting from market commonality and resource similarity.
B) set of competitive actions and competitive responses the firm takes to build or defend its competitive advantages and to improve its market position.
C) total set of actions and responses taken by all firms competing within a market.
D) ongoing set of competitive actions and competitive responses between competitors as they maneuver for advantageous market position.

Question 24

Competitors are more likely to respond to strategic or tactical actions when they are taken by a market leader.

Question 25

Quality affects the degree of rivalry in that firms lacking quality are likely to me more aggressive in their competitive actions until the quality problems are corrected.

Question 26

In general, firms are more aware of competitors who have similar resources and who

A) have low market dependence.
B) are late movers.
C) have low market commonality.
D) compete against the firm in multiple markets.

Question 27

____ relates to the gains or losses a firm will experience if it attacks a rival or responds to an attack by a rival.

A) Motivation
B) Awareness
C) Responsiveness
D) Ability

Question 28

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

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

Question 29

A competitive action can be one of two types, either ____ or ____.

A) aggressive, defensive
B) quality-based, cost-based
C) strategic, tactical
D) market-based, resource-based

Question 30

The more dependent a firm is on its market, the more aggressively it will defend it from another competitor.

Question 31

Firms in a slow-cycle market are shielded from imitators for long periods of time.

Question 32

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

Question 33

Even if the effects of a competitor's strategic action on the focal firm are significant (e.g., loss of market share), little response is likely from that firm.

Question 34

A firm can expect that every launch of a successful new product will be followed by a counterattack by competitors, even in a slow-cycle market.

Question 35

Research suggests that a firm with greater multimarket contact is _______ likely to initiate and attack, and _____ likely to respond aggressively when attacked.

A) more; more
B) less; more
C) less; less
D) more; less

Question 36

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

Question 37

Multimarket competition occurs when firms

A) sell different products to the same customer.
B) have a high level of awareness of their competitors' strategic intent.
C) simultaneously enter into an attack strategy.
D) compete against each other in several geographic or product markets.

Question 38

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

Question 39

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.

Question 40

In general, compared with firms which compete in only one market, among firms which face one another in multiple markets there is

A) similar competitive rivalry.
B) less competitive rivalry.
C) more competitive rivalry.
D) no competitive rivalry.

Question 41

____ markets are often described as volatile and innovative.

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

Question 42

Sustained competitive advantage is most achievable in a ____ market.

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

Question 43

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

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

Question 44

Without quality, the firm's products

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 45

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

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

Question 46

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

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 47

Companies in fast-cycle markets need to profit quickly from an innovative product for all of the following reasons EXCEPT

A) the technology used is not proprietary.
B) the prices of component parts tend to rise rapidly.
C) product prices fall quickly in fast-cycle markets.
D) counterattacks from rivals come quickly.

Question 48

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

Question 49

Late movers are those firms that

A) respond to a competitive action a significant amount of time after the first mover's action and the second mover's response.
B) respond to a first mover's competitive action often through imitation or a move designed to counter the effects of the action.
C) take an initial competitive action (either strategic or tactical).
D) typically achieve higher-than-average returns because they can imitate the most efficient actor.

Question 50

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

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

Question 51

First movers are

A) entrepreneurs who lead in the establishment of new industries.
B) firms that are first to exit a declining industry.
C) firms that take an initial competitive action.
D) individuals who move frequently as employment opportunities change in a locale.

Question 52

On the whole there are more competitive responses to

A) strategic actions than to tactical actions.
B) tactical actions than to strategic actions.
C) buyer pressures than to supplier pressures.
D) the demands of the top management team than to industry structural pressures.

Question 53

An organization's loyalty to its own product is a competitive disadvantage in a ____ market.

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

Question 54

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

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 55

Consumer goods producers are innovating in terms of healthy products. This type of incremental innovation is typical of

A) fast-cycle markets.
B) standard-cycle markets.
C) incremental-cycle markets.
D) slow-cycle markets.

Question 56

Goods or services in standard-cycle markets reflect

A) organizations that serve a mass market.
B) numerous first mover advantages.
C) an inability to sustain a competitive advantage except for brief periods of time.
D) competitive advantages that are shielded from imitation.

Question 57

Quality is

A) meeting or exceeding customer expectations in the goods and/or services offered.
B) only a major factor in the production of luxury goods, such as BMW cars.
C) an assured way to gain competitive advantage.
D) a viable trade-off with product cost in gaining a competitive advantage.

Question 58

Which organization has the highest market dependence?

A) a chain of rapid-service oil change shops
B) a manufacturer of chemicals for the international pharmaceutical industry
C) a regional department store having 26 locations in the Northwest
D) a company that specializes in making replacement tiles for the space shuttle

Question 59

A second mover

A) is typically ineffective in its response to the first mover.
B) attempts to provide a product with greater customer value than the first mover's product.
C) usually incurs higher expenses than the first mover since it must engage in reverse engineering.
D) typically has a higher survival rate than first movers which typically take greater risks.

Question 60

Reverse engineering is characteristic of

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

Question 61

Define competitors, competitive rivalry, competitive behavior, and competitive dynamics.

Question 62

What factors contribute to the likelihood of a response to a competitive action?

Question 63

Define slow-cycle, fast-cycle and standard cycle markets.

Question 64

What are the advantages and disadvantages of being a first mover, second mover, and late mover?

Question 65

Define competitive actions and responses and explain the two types of competitive actions and responses.