Question 1

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

Accepted Answer

False

Question 2

"Competitive dynamics" indicates that firms and their strategic actions are independent.

Accepted Answer

Competitive dynamics refers to the interdependent actions and reactions of firms in the marketplace. Firms are influenced by the actions of their rivals and must take these into account when formulating their strategies. Therefore, firms and their strategic actions are not independent.

Question 3

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 competitors initial actions.

Accepted Answer

The statement correctly describes the importance of considering competitors' responses and taking proactive measures in response to their actions in order to achieve success with a strategy.

Question 4

Coca Cola and PepsiCo compete across a number of products (e.g.,soft drinks,bottled water)and geographic markets (U.S. and foreign markets)indicating that both companies have market commonality.

Accepted Answer

The statement is true as both Coca Cola and PepsiCo compete in multiple product categories and geographic markets, indicating market commonality between the two companies.

Question 5

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

Boeing's decision to commit resources to build the 787 was a strategic action, as it represented a major shift in the company's product line and long-term goals. Tactical actions typically involve short-term, specific plans to achieve immediate objectives.

Question 6

Competitive rivalry is the set of competitive actions and responses that occur among firms as they maneuver for an advantageous market position.

Accepted Answer

Competitive rivalry refers to the actions and reactions that occur among competitors as they try to gain market advantage over one another.

Question 7

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 8

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.

Accepted Answer

Market commonality refers to the extent to which a firm and its competitors are involved in multiple markets and how important those markets are to each firm.

Question 9

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

Accepted Answer

This statement is true. Given that both Fed Ex and UPS have similar resources and compete in the same markets, they are direct competitors in the industry.

Question 10

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

Accepted Answer

This is a widely accepted finding in the literature on strategic management and competition. Multimarket contact refers to the situation where two firms compete with each other in multiple markets. Greater multimarket contact gives rise to mutual forbearance, which means firms are less likely to attack each other because doing so may trigger retaliation in other markets. At the same time, if one firm does initiate an attack, the other firm is more likely to respond aggressively in order to defend its market position in all the markets where it competes with the attacker.

Question 11

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,family-owned Italian...

Question 12

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

Accepted Answer

Competitive rivalry is the competition between companies within the same industry for market share and customers, it is not limited to the international market. Additionally, being the first mover in a market is sometimes advantageous, but not always necessary for success.

Question 13

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

Accepted Answer

Firms that operate in the same market, offer similar products and target similar customers are in direct competition with each other, as they are vying for the same customers and trying to capture a share of the market.

Question 14

Firms with high market commonality and highly similar resources are direct and mutually acknowledged competitors.

Accepted Answer

Firms with high market commonality and highly similar resources are likely to compete directly for the same customers and resources, making them acknowledged competitors in the industry.

Question 15

Extensive market commonality guarantees intense competition in an industry.

Accepted Answer

The answer of Extensive market commonality guarantees intense competition in...

Question 16

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, they are more likely to pay close attention to their competitors and be aware of their actions, strategies, and strengths. This can lead to heightened awareness and potentially more intense competition.

Question 17

Bayou Belle Water markets water drawn only from a single artesian well in Southern Louisiana. It has a loyal following in its region. Since Bayou Belle markets the water,just as Coca-Cola,Nestle,and PepsiCo do,Bayou Belle has high resource similarity with these international firms.

Accepted Answer

Bayou Belle Water may be in the same industry (beverage manufacturing) as Coca-Cola, Nestle, and PepsiCo, but they do not have high resource similarity as Bayou Belle draws water from a single artesian well while the other companies draw water from a variety of sources, have larger production facilities, and have more diversified product lines.

Question 18

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 19

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 20

Walmart has recently opened a store in Alsatia,Missouri. Several local small retailers have decided that choosing not to respond to Walmart'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 answer of Walmart has recently opened a store in...

Quiz 5: Competitive Rivalry and Competitive Dynamics.