Question 1

India's Tata Group participates in a variety of industries.Which one of the following statements is incorrect?
A)Tata Group industries include heavy vehicles,cars,department stores,and tea.
B)Tata Group's management team is hoping to maintain the image as an international brand.
C)Tata Group's competitive advantage was based on scouring the globe for the highest quality materials.
D)Tata Group's Taj Hotels acquired Ritz Carlton in Boston and sold it at a loss.
E)Tata Group's advantage is based on highest quality raw materials irrespective of price.

Accepted Answer

Tata Group's Taj Hotels never acquired Ritz Carlton in Boston. The statement is incorrect as it misrepresents the acquisitions made by the Tata Group's hospitality arm.

Question 2

In the terminology of the strategic intent framework for competitive advantage,a firm that establishes advantages in a number of different areas has:
A)attribute diversity.
B)marketing breadth.
C)comparative advantage.
D)layers of advantage.
E)a "double diamond."

Accepted Answer

Layers of advantage refer to a firm's ability to establish competitive advantages in multiple areas, creating a robust and sustainable competitive position.

Question 3

The nature of firm strategy,structure,and rivalry is the final determinant of a nation's diamond.What does this statement refer to? How does domestic rivalry differ from foreign rivalry? Please explain in detail.

Accepted Answer

The answer of The nature of firm strategy,structure,and rivalry is...

Question 4

The strong rivalry in the U.S.market between Dell,Gateway,Hewlett-Packard,Apple,and other computer companies has helped make the United States a world leader in personal computers.

Accepted Answer

The intense competition among these companies has driven innovation, improved quality, and lowered prices, contributing to the United States' leading position in the global personal computer market.

Question 5

What are demand conditions? Why is the nature of home demand conditions for the firm's or industry's products and services important?

Accepted Answer

The answer of What are demand conditions? Why is the...

Question 6

An approach to competitive advantage that exploits weaknesses in competitors' narrow-focus strategies is called a ________ strategy.
A)loose bricks
B)collaboration
C)layers of advantage
D)supplier power
E)generic

Accepted Answer

A "loose bricks" strategy specifically targets the weaknesses in competitors' focused or narrow strategies, aiming to exploit these gaps for competitive advantage.

Question 7

A nation's banking system,health care system,transportation system,and communications system,as well as the availability and cost of using these systems are considered as ________ resources available for competitive advantage of a business.
A)knowledge
B)physical
C)human
D)infrastructure
E)capital

Accepted Answer

Infrastructure resources, such as a nation's banking system, health care system, transportation system, and communications system, are crucial for the competitive advantage of a business because they provide the essential support services and facilities needed for economic activities to function efficiently.

Question 8

The automobile industry has become fiercely competitive on a global basis.The initial success of foreign automakers in the United States was due to all of the following reasons except:
A)reluctance of U.S.manufacturers to design high-quality cars.
B)inability of U.S.manufacturers to manufacture high-quality cars.
C)reluctance of U.S.manufacturers to make inexpensive small cars.
D)bigger cars meant bigger profits for U.S.manufacturers.
E)U)S.manufacturers did not realize drivers' preferences.

Accepted Answer

The initial success of foreign automakers in the United States was not due to U.S. manufacturers not realizing drivers' preferences. The other options (A, B, C, D) directly relate to the competitive advantages foreign automakers had, such as focusing on quality, affordability, and smaller car sizes, which were areas U.S. manufacturers were either reluctant to enter or struggled with. However, U.S. manufacturers were aware of drivers' preferences but often prioritized other aspects such as profit margins from bigger cars.

Question 9

"Factor conditions" refers to a country's endowment with resources,which may have been created or inherited.

Accepted Answer

"Factor conditions" indeed refer to a country's endowment with resources, which can be either inherited (such as natural resources) or created (such as skilled labor force), highlighting the importance of both types of resources in contributing to a nation's competitive advantage.

Question 10

Intel's loose brick was:
A)its narrow focus on complex microprocessors for PCs.
B)demand for non-PC products.
C)getting into the smartphone market.
D)unbeatable in the computer market.
E)developing new chips incorporating 3D technology.

Accepted Answer

Intel's narrow focus on complex microprocessors for PCs was considered a "loose brick" because it limited the company's ability to adapt to the rapidly evolving technology market, where demand for diverse computing devices, including smartphones and tablets, was growing.

Question 11

When company management decides that it is unwilling to follow the "conventional wisdom" and instead finds a new way to gain competitive advantage,it might be said to be:
A)searching for loose bricks.
B)changing the rules of engagement.
C)collaborating.
D)building layers of advantage.
E)innovating.

Accepted Answer

Changing the rules of engagement refers to altering the traditional methods or strategies in order to gain a competitive advantage, which aligns with the idea of not following conventional wisdom.

Question 12

According to Michael Porter's research on the competitive advantage of nations,human,physical,knowledge,capital,and infrastructure resources are all components of a country's:
A)factor conditions.
B)demand conditions.
C)strategy,structure,and rivalry.
D)related and supporting industries.
E)global conditions.

Accepted Answer

According to Michael Porter's research on the competitive advantage of nations, factor conditions refer to a country's endowments in terms of resources such as human, physical, knowledge, capital, and infrastructure. These are essential inputs for a competitive economy.

Question 13

It is the number of domestic rivals,intensity of the competition,as well as the quality of the competitors that make the difference.

Accepted Answer

The answer of It is the number of domestic rivals,intensity...

Question 14

Del Vecchio,the Italian entrepreneur's business principles include all but one of the following:
A)"Made in Italy" is important.
B)cutting costs to keep production at home.
C)investing in automation.
D)hiring qualified personnel.
E)investing in robots,not workers.

Accepted Answer

The answer of Del Vecchio,the Italian entrepreneur's business principles include...

Question 15

The Komatsu\Caterpillar saga illustrates the fact that global competitive battles can be shaped by factors other than the pursuit of generic strategies.Explain this statement giving examples and impact on competitive strategies.

Accepted Answer

The answer of The Komatsu\Caterpillar saga illustrates the fact that...

Question 16

The town of Impruneta in the Italian province of Florence,is a source of high-quality terracotta;the high iron content of the area's clay means that the finished pieces can withstand temperatures as low as -20 degrees Fahrenheit.Many artisan pieces are rolled by hand,including those imported in the United States by Seibert & Rice.This is an example of ________ resources available for competitive advantage of a business.
A)knowledge
B)physical
C)human
D)infrastructure
E)capital

Accepted Answer

The high-quality terracotta from Impruneta, characterized by its high iron content clay, is a physical resource that provides a competitive advantage for businesses involved in its trade or utilization.

Question 17

Caterpillar's attention was focused elsewhere when Komatsu made its first international entry into the Eastern European Market.Based on the strategic intent framework,this is an example of:
A)changing the rules.
B)collaborating.
C)comparative advantage.
D)layers of advantage.
E)loose bricks.

Accepted Answer

This scenario exemplifies the "loose bricks" strategy, where a company capitalizes on opportunities that the market leader may have overlooked or ignored, such as entering a new geographical market. Komatsu's entry into the Eastern European market while Caterpillar was focused elsewhere is a classic example of exploiting such an opportunity.

Question 18

When managers at Matsushita realized that cost advantages in TV production were often fleeting,they added quality and reliability advantages,thus establishing:
A)loose bricks.
B)a logo.
C)attribute diversity.
D)layers of advantage.
E)buyer power.

Accepted Answer

Layers of advantage refer to the strategy of adding multiple competitive advantages (such as quality and reliability, in addition to cost) to create a stronger market position that is harder for competitors to overcome. Matsushita's approach of adding quality and reliability to their cost advantage in TV production exemplifies this strategy.

Question 19

According to Michael Porter's research on the competitive advantage of nations,Switzerland's large synthetic dye industry and the success of the Swiss pharmaceuticals can be explained in terms of:
A)factor conditions.
B)demand conditions.
C)strategy,structure,and rivalry.
D)related and supporting industries.
E)formation of the European Union.

Accepted Answer

Switzerland's success in the synthetic dye and pharmaceuticals industries can be attributed to related and supporting industries, which provide a strong network and infrastructure that fosters innovation and competitiveness.

Question 20

Taiwan's Acer prospered by following founder Stan Shih's strategy of approaching the world computer market from the periphery.By the time Acer was ready to target the United States in earnest,it was already the number one PC brand in key countries in Latin America,Southeast Asia,and the Middle East.This is an example of which component of competitive innovation?
A)collaboration
B)layers of advantage
C)loose bricks
D)generic
E)supplier power

Accepted Answer

C) Loose bricks strategy involves targeting weaker or less contested markets to build strength and resources before moving on to more competitive areas. Acer's approach of first becoming dominant in less contested markets (Latin America, Southeast Asia, and the Middle East) before targeting the highly competitive US market exemplifies this strategy.

Quiz 16: Strategic Elements of Competitive Advantage

India's Tata Group participates in a variety of industries.Which one of the following statements is incorrect?

In the terminology of the strategic intent framework for competitive advantage,a firm that establishes advantages in a number of different areas has:

The nature of firm strategy,structure,and rivalry is the final determinant of a nation's diamond.What does this statement refer to? How does domestic rivalry differ from foreign rivalry? Please explain in detail.

The strong rivalry in the U.S.market between Dell,Gateway,Hewlett-Packard,Apple,and other computer companies has helped make the United States a world leader in personal computers.

What are demand conditions? Why is the nature of home demand conditions for the firm's or industry's products and services important?

An approach to competitive advantage that exploits weaknesses in competitors' narrow-focus strategies is called a ________ strategy.

A nation's banking system,health care system,transportation system,and communications system,as well as the availability and cost of using these systems are considered as ________ resources available for competitive advantage of a business.

The automobile industry has become fiercely competitive on a global basis.The initial success of foreign automakers in the United States was due to all of the following reasons except:

"Factor conditions" refers to a country's endowment with resources,which may have been created or inherited.

Intel's loose brick was:

When company management decides that it is unwilling to follow the "conventional wisdom" and instead finds a new way to gain competitive advantage,it might be said to be:

According to Michael Porter's research on the competitive advantage of nations,human,physical,knowledge,capital,and infrastructure resources are all components of a country's:

It is the number of domestic rivals,intensity of the competition,as well as the quality of the competitors that make the difference.

Del Vecchio,the Italian entrepreneur's business principles include all but one of the following:

The Komatsu\Caterpillar saga illustrates the fact that global competitive battles can be shaped by factors other than the pursuit of generic strategies.Explain this statement giving examples and impact on competitive strategies.

Caterpillar's attention was focused elsewhere when Komatsu made its first international entry into the Eastern European Market.Based on the strategic intent framework,this is an example of:

When managers at Matsushita realized that cost advantages in TV production were often fleeting,they added quality and reliability advantages,thus establishing:

According to Michael Porter's research on the competitive advantage of nations,Switzerland's large synthetic dye industry and the success of the Swiss pharmaceuticals can be explained in terms of: