Question 1

Under the framework of competitive action and response, "ability" refers to an attacking or responding firm's knowledge of the competitive market characteristics.

Accepted Answer

The answer of Under the framework of competitive action and...

Question 2

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.

Accepted Answer

Being a first mover requires significant investment in research and development, as well as the ability to quickly bring new products to market.

Question 3

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

Accepted Answer

Direct and mutually acknowledged competitors are usually firms that operate in the same industry, have similar resources, and target the same customers or markets. Examples of direct competitors include FedEx and UPS in the shipping and logistics industry.

Question 4

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

Accepted Answer

In fast cycle markets, being a first mover can give a significant advantage over competitors who enter later. This is because the market is constantly changing and evolving, so the first mover can establish themselves as the market leader and innovate quickly to stay ahead. In slower cycle markets, the advantages of being a first mover may not be as significant, as there is more time for competitors to catch up and the market may not change as rapidly.

Question 5

Two firms, such as a small local, family-owned Italian restaurant and Olive Garden share few markets and have little similarity in resources, but are nonetheless direct and mutually acknowledged competitors.

Accepted Answer

The answer of Two firms, such as a small local,...

Question 6

Boeing's decision to commit the resources required to build the super-efficient 787 midsized jetliner is an example of a tactical action.

Accepted Answer

The answer of Boeing's decision to commit the resources required...

Question 7

Among the drivers of competitive actions and responses, motivation refers to the perceived gains that will result from a firm which initiates an attack. If a firm perceives that its position will improve, it is more likely to attack.

Accepted Answer

Motivation is indeed one of the drivers of competitive actions and responses. If a firm perceives that the perceived gains will outweigh the costs, it is more likely to attack. Thus, if a firm feels that initiating an attack will improve its position, it will be motivated to do so.

Question 8

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

Accepted Answer

Successful imitation of the first mover's innovation can help the second mover to learn from the mistakes and investments of the first mover, and to avoid them to achieve success. Therefore, the statement is true.

Question 9

Awareness tends to be greatest when firms have highly similar resources and compete in multiple markets.

Accepted Answer

When firms compete in multiple markets and have highly similar resources, they are more likely to be aware of each other's actions and strategies, which can lead to greater competition and intensity in those markets. This can also lead to a higher likelihood of strategic response and imitation.

Question 10

A tactical competitive action involves a significant commitment of specific and distinctive organizational resources.

Accepted Answer

The answer of A tactical competitive action involves a significant...

Question 11

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

Accepted Answer

Strategic actions are typically long-term and involve significant resources and planning, making them harder to implement than tactical actions, which are usually short-term and more flexible.

Question 12

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.

Accepted Answer

This is the correct definition of a competitive action.

Question 13

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.

Accepted Answer

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

Question 14

First movers can gain a sustained competitive advantage when they reduce their costs through reverse engineering.

Accepted Answer

The answer of First movers can gain a sustained competitive...

Question 15

An organization with high profitability, such as Wal-Mart, will be able to develop high organizational slack.

Accepted Answer

Organizational slack refers to the extra resources that an organization has beyond what is needed to operate efficiently. In general, organizations with high profitability are more likely to have more resources to allocate towards slack because they have more financial resources available. Therefore, it is likely that Wal-Mart, as a highly profitable organization, would be able to develop high organizational slack.

Question 16

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

Accepted Answer

The answer of Wal-Mart's aggressive pricing strategy is a strategic...

Question 17

As noted in the Chapter 5 Opening Case, Apple opened a service called "Game Center" once it found that users were using its iPhone, iPad, and iPod platforms for videogames. This is an example of a strategic action by Apple which was followed by strategic responses by Nintendo and Sony.

Accepted Answer

The statement accurately reflects the content of the Chapter 5 Opening Case.

Question 18

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

Accepted Answer

Resources such as financial capital and people are essential for a firm to take strategic actions and respond to the actions of competitors. Without these resources, a firm would lack the necessary means to effectively compete and defend its position in the market.

Question 19

Wal-Mart has recently opened a store in Alsatia, Missouri. Several local small retailers have decided that choosing not to respond to Wal-Mart's competitive actions is a viable long-term option, because although the companies have high market commonality they have little resource similarity. These small retailers are correct in their decision.

Accepted Answer

Small retailers with high market commonality but low resource similarity are likely to be at a competitive disadvantage against a large corporation like Wal-Mart, which can leverage its extensive resources to dominate the market. Ignoring Wal-Mart's competitive actions could lead to loss of market share and potentially drive them out of business.

Question 20

A lack of awareness leads to a reduction in competition.

Accepted Answer

A lack of awareness often leads to an increase in competition as fewer people are aware of the opportunity or market, which can lead to a higher demand and more competition among those who do know about it.

Quiz 5: Competitive Rivalry and Competitive Dynamics