Question 1

Which of the following is NOT an example of a company that uses blue-ocean market strategy?

Accepted Answer

Walmart's logistics and distribution strategy focuses on cost leadership and efficiency in a highly competitive market, which aligns more with a red-ocean strategy rather than creating a new, uncontested market space typical of a blue-ocean strategy.

Question 2

A hit-and-run or guerrilla warfare type offensive strategy

Accepted Answer

The choice E describes the hit-and-run or guerrilla warfare type offensive strategy, which involves unexpected attacks by a small-to-medium size competitor to grab sales and market share from complacent or distracted rivals. This strategy is often used by smaller players who cannot compete head-on with larger rivals, and therefore, they use surprise moves to gain market share.

Question 3

Which of the following is NOT among the principal offensive strategy options that a company can employ?

Accepted Answer

Blocking the avenues open to challengers is more of a defensive strategy rather than an offensive one. Offensive strategies focus on gaining competitive advantage, while blocking challengers is about protecting current positions.

Question 4

Which of the following is NOT a strategic choice that a company must make to complement and supplement its choice of one of the five generic competitive strategies?

Accepted Answer

The choice of employing a market share leadership strategy is actually one of the five generic competitive strategies, so it cannot be considered a complementary or supplementary choice to one of those strategies. Therefore, it is the option that is NOT a strategic choice that a company must make to complement and supplement its choice of one of the five generic competitive strategies. A, B, D, and E are all valid strategic choices that a company may need to make depending on its chosen competitive strategy.

Question 5

Once a company has decided to employ a particular generic competitive strategy, then it must make the following additional strategic choices, EXCEPT whether to

Accepted Answer

The company does not need to focus on buyer segments that a rival is already serving, as this is not a necessary strategic choice once a generic competitive strategy is selected.

Question 6

What is the goal of signaling a challenger that strong retaliation is likely in the event of an attack?

Accepted Answer

The goal of signaling a challenger that strong retaliation is likely is to dissuade challengers from attacking or diverting them into using less threatening options. This is a deterrent strategy that aims to prevent potential attackers from initiating the attack in the first place.

Question 7

A blue-ocean strategy

Accepted Answer

A blue-ocean strategy involves creating a new market segment or industry that does not yet exist, rather than trying to beat out existing competitors in existing markets. This allows for the creation and capture of new demand, rather than simply trying to gain a larger share of an already-saturated market.

Question 8

Which of the following is NOT a principal offensive strategy option?

Accepted Answer

Blocking the avenues open to challengers is more of a defensive strategy rather than an offensive one.

Question 9

The principal offensive strategy options include all of the following EXCEPT

Accepted Answer

The question asks for the option that is NOT part of the principal offensive strategy options. Options A, B, C, and D are all commonly used offensive strategies. Option E, initiating a market threat and counterattack simultaneously to effect a distraction, is not a commonly recognized offensive strategy and therefore is not part of the principal offensive strategy options.

Question 10

Which of the following rivals make the best targets for an offensive attack?

Accepted Answer

Firms with weaknesses in areas where the challenger is strong are the best targets for an offensive attack as it allows the challenger to leverage their strengths and exploit their weaknesses, giving them a competitive advantage.

Question 11

Which of the following is NOT a purpose of a defensive strategy?

Accepted Answer

The purpose of a defensive strategy is to decrease the risk of being attacked and to protect a competitive advantage. It also includes weakening the impact of any attack that occurs and pressuring challengers to aim their efforts at other rivals. However, increasing the risk of having to defend an attack is not a purpose of a defensive strategy.

Question 12

Which one of the following is NOT a good type of rival for an offensive-minded company to target?

Accepted Answer

Other offensive-minded companies with a sizable war chest of cash and marketable securities would be a strong rival and not a good target for an offensive-minded company. They would likely have the resources and capabilities to put up a strong fight and potentially outmaneuver the challenger. The other options listed (A, B, C, and D) describe types of rivals that could be good targets for an offensive-minded company.

Question 13

A blue-ocean type of offensive strategy

Accepted Answer

A blue-ocean type of offensive strategy is focused on discovering or inventing a new industry or distinct market segment. This strategy allows a company to create and capture entirely new demand, making its rivals irrelevant. It involves creating uncontested market space and making competition irrelevant. This strategy is the opposite of the traditional “red-ocean” strategy that is focused on competing in existing market space with existing rivals. This strategy typically offers growth in revenues and profits.

Question 14

Which of the following ways are employed by defending companies to fend off a competitive attack?

Accepted Answer

By gaining product line exclusivity, defending companies can limit opportunities for competitors to distribute their products, providing a significant barrier to entry for new players. The other options may not necessarily be effective in warding off competitive attacks and may even negatively impact the defending company's own performance in the long run.

Question 15

Which of the following is NOT an example of a defensive move to protect a company's market position and restrict a challenger's options for initiating a competitive attack?

Accepted Answer

Challenging struggling runner-up firms that are on the verge of going under is not a defensive move to protect a company's market position and restrict a challenger's options for initiating a competitive attack. Instead, it is a predatory move to eliminate weaker competitors from the market. The other options listed (B, C, D, and E) are all examples of defensive moves to protect a company's market position and restrict a challenger's options.

Question 16

Launching a preemptive strike type of offensive strategy entails

Accepted Answer

Launching a preemptive strike type of offensive strategy entails moving first to secure advantageous competitive assets that rivals can't readily match or duplicate. It involves taking the initiative and gaining a competitive advantage before competitors have a chance to react.

Question 17

Sometimes it makes sense for a company to go on the offensive to improve its market position and business performance. The best offensives tend to incorporate the following EXCEPT

Accepted Answer

Using a strategic offensive to leverage weaknesses and strengthen operating vulnerabilities is not a characteristic of a successful offensive strategy. Instead, companies should focus on building a competitive advantage, applying resources strategically, employing elements of surprise, and displaying aggression in their actions.

Question 18

Strategic offensives should, as a general rule, be based on

Accepted Answer

Strategic offensives should be based on exploiting a company's strongest competitive assets-its most valuable resources and capabilities to effectively compete against rivals in the market.

Question 19

Which of the following signals would NOT warn challengers that strong retaliation is likely?

Accepted Answer

Announcing strong quarterly earnings potential to financial analysts may be viewed as a positive signal of the company's financial strength, but it does not necessarily indicate a willingness to engage in strong retaliation against challengers.

Question 20

An offensive to yield good results can be short if

Accepted Answer

If buyers respond immediately to a dramatic cost-based price cut or imaginative ad campaign, then the offensive can yield good results quickly. This means that there is no need to wait for a long period of time for the offensive to take effect.

Quiz 6: Supplementing the Chosen Competitive Strategy: Other Important Business Strategy Choices