Question 1

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.

Accepted Answer

A.G. Edwards focused on maintaining its traditional business model centered around personal relationships, rather than adopting the new online trading trend.

Question 2

_____ 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

Accepted Answer

Multipoint competition is when a firm encounters the same competitor in multiple markets, leading to strategic interactions across those markets.

Question 3

_____ 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

Accepted Answer

Capability is one of the three factors that determines the likelihood of a firm responding to a competitive move. The other two factors are motivation and opportunity.

Question 4

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

Accepted Answer

One Flew South's strategy of placing a high-end restaurant in an unconventional location like an airport represents a "blue ocean" strategy, which involves creating a new market space with little competition.

Question 5

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

Accepted Answer

Strategy has to be dynamic and anticipatory because success in most competitive rivalries is less a function of grandiose predictions than it is a result of being able to respond rapidly to real changes as they occur.

Question 6

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.

Accepted Answer

Mutual forbearance occurs when firms recognize that aggressive actions in one market could lead to retaliation in another, leading to a tacit understanding to avoid aggressive competition.

Question 7

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.

Accepted Answer

Multipoint competition occurs when firms compete against each other in multiple markets or segments, as Kellogg's and General Mills do in the global breakfast cereal market.

Question 8

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.

Accepted Answer

Multipoint competition occurs when firms compete against each other in multiple markets or segments, leading to strategic interactions across these markets.

Question 9

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.

Accepted Answer

The blue ocean strategy focuses on creating new market spaces or "blue oceans" where competition is irrelevant, rather than competing in saturated markets.

Question 10

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.

Accepted Answer

Bricolage involves creatively combining existing resources and ideas to create something new, often in a business context.

Question 11

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

Accepted Answer

All of the examples provided (Nintendo's Wii, Henry Ford's Model T, Callaway's Big Bertha club, and Yellow Tail Wines) represent blue ocean strategies as they each created new market spaces and attracted non-customers by offering unique value propositions.

Question 12

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

Accepted Answer

Awareness is a key factor in determining whether a firm will respond to a competitive move, as it involves recognizing the move and understanding its potential impact.

Question 13

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

Accepted Answer

Mutual forbearance occurs when competing firms avoid aggressive competition against each other in certain markets to maintain stability and improve performance for both parties.

Question 14

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.

Accepted Answer

The answer of Which of the following responses of firms...

Question 15

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

Accepted Answer

Starbucks used a blue ocean strategy by creating a new market space and demand, making the $4 latte a popular item among new customer segments, rather than competing in an existing market.

Question 16

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.

Accepted Answer

Focusing on traditional modes of business.

Question 17

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.

Accepted Answer

The answer of Monster Mini Golf partnered with the rock...

Question 18

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

Accepted Answer

A fighting brand is a lower-end brand introduced by a firm to protect its market share by competing with lower-priced competitors, without harming its existing higher-end brands.

Question 19

The printing press is a classical example of the concept of _____.
A) disruptive
B) bricolage
C) foothold
D) hypercompetitive
E) fighting brand

Accepted Answer

The answer of The printing press is a classical example...

Question 20

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.

Accepted Answer

This is an example of multipoint competition, where firms compete against each other in multiple markets or countries.

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

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?

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

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

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.

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 ____."

Which of the following best describes mutual forbearance?

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:

Which of the following best describes multipoint competition?

Which of the following best describes the blue ocean strategy?

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

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?

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

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

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 _____ 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.

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

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: