Question 1

Intel's loose brick was:

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 2

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.

Accepted Answer

The high-quality terracotta sourced from Impruneta is an example of physical resources available for competitive advantage of a business. The high iron content of the area's clay gives the finished pieces unique properties that make them superior to those made from clay sourced from other locations.

Question 3

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.

Accepted Answer

Infrastructure resources include a nation's banking system, health care system, transportation system, and communications system, which are crucial for businesses to operate and compete effectively. Knowledge, physical, human, and capital resources refer to other types of resources that businesses can leverage for competitive advantage, but do not specifically include the aforementioned systems.

Question 4

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:

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 5

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:

Accepted Answer

The answer of According to Michael Porter's research on the...

Question 6

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 7

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 8

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

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 9

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,...

Question 10

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:

Accepted Answer

According to Michael Porter's research, factor conditions such as human, physical, knowledge, capital, and infrastructure resources are all components that contribute to a country's competitive advantage. These factor conditions refer to the availability and quality of resources within a country, which are necessary for businesses to compete in the industry.

Question 11

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

Accepted Answer

Factor conditions refer to a country's endowment with resources, which may include natural resources, human resources, physical infrastructure, and technological capabilities. These resources can either be created or inherited by a country.

Question 12

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...

Question 13

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:

Accepted Answer

The answer of When company management decides that it is...

Question 14

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:

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 15

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

Accepted Answer

The strategic intent framework for competitive advantage emphasizes the importance of establishing layers of advantage in different areas such as technology, distribution, marketing, and innovation. Therefore, a firm that has established advantages in a number of different areas can be said to have layers of advantage. Option A, attribute diversity, is not a term used in this framework. Option B, marketing breadth, is not comprehensive enough to capture the full range of advantages. Option C, comparative advantage, refers to a specific type of advantage based on lower costs or superior quality. Option E, "double diamond," is not a term used in the strategic intent framework.

Question 16

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

Accepted Answer

Matsushita established layers of advantage by adding quality and reliability to their cost advantage in TV production. This allowed them to maintain a competitive advantage even when cost advantages were no longer present.

Question 17

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

Accepted Answer

There is no evidence that Taj Hotels, a subsidiary of Tata Group, acquired and sold Ritz Carlton in Boston at a loss. Therefore, statement D is incorrect. The other statements are correct.

Question 18

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?

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.

Question 19

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 statement is true. The competition between these computer companies has spurred innovation and advancement in the industry, resulting in the United States being a world leader in personal computers.

Question 20

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

Accepted Answer

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

Quiz 16: Strategic Elements of Competitive Advantage