Question 1

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 2

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

The statement suggests that the small retailers have little resource similarity with Wal-Mart, which may not necessarily be true. In fact, Wal-Mart's vast resources may give it a significant advantage over the small retailers, such as in terms of economies of scale or marketing capabilities. Therefore, choosing not to respond to Wal-Mart's competitive actions may not be a viable long-term option for the small retailers.

Question 3

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 the perceived gains that a firm anticipates from initiating an attack. If a firm believes that it will benefit from attacking its competitors, it is more probable to take aggressive actions.

Question 4

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

When a second mover imitates the first mover's innovation successfully, they can learn from the mistakes of the first mover and avoid making the same mistakes, and thus save money on major investments.

Question 5

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

Accepted Answer

When firms have highly similar resources and compete in multiple markets, the competition becomes intense and they become more aware of each other's actions and strategies. This results in high awareness.

Question 6

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 statement accurately describes what a competitive action is.

Question 7

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

Accepted Answer

In fast cycle markets, the benefits of being a first mover are significant because products and technologies quickly become obsolete, and customer preferences and needs can change rapidly. First movers have the advantage of establishing brand recognition and customer loyalty, developing supply chain and distribution channels, and setting industry standards before competitors can catch up. However, in slow cycle markets, being a first mover may not necessarily guarantee success as there is more time for competitors to observe and learn from the first mover's mistakes and improve upon their offerings.

Question 8

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

This statement is false as Boeing's decision to commit resources to build the 787 was a strategic action, not a tactical action.

Question 9

A lack of awareness leads to a reduction in competition.

Accepted Answer

A lack of awareness actually leads to an increase in competition because there is less understanding of what others are doing, and therefore more companies or individuals may independently try to fill the same market niche or demand.

Question 10

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 innovative products to market. This typically requires readily available resources.

Question 11

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

Accepted Answer

Fed Ex and UPS are both package delivery companies with similar resources and target similar markets, which makes them direct and acknowledged competitors.

Question 12

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 13

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

Without resources, a firm cannot invest in marketing, research and development, production, or other activities needed to attack or respond to competitors.

Question 14

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 15

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 16

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 17

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

Accepted Answer

High profitability provides an organization with the ability to have excess resources and financial cushion, which is referred to as 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.

Accepted Answer

The statement accurately describes the drivers of competitive behavior.

Question 19

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 20

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

Accepted Answer

Tactical actions are typically more specific and short-term in nature, requiring a high degree of operational efficiency and expertise to execute effectively. Competitors may not have the necessary resources or capabilities to quickly implement these tactical actions. Strategic actions, on the other hand, tend to be more broad and long-term in nature, and competitors may have an easier time replicating or adapting these strategies to their own business models.

Quiz 5: Competitive Rivalry and Competitive Dynamics