Question 1

Amazon is an example of a company that used the differentiation strategy to enter the market.The differentiation features included _____________.
A) minimal customer service
B) traditional back office logistics
C) exceptional customer service
D) traditional delivery logistics

Accepted Answer

Amazon set out to use Internet technology to revolutionize the way books are sold. As a bookseller, Amazon founder Jeff Bezos set out to use Internet technology to revolutionize the way books are sold. Bezos was not doing anything that had not been done before. But the two key differentiating features of doing it on the Internet and offering extraordinary customer service have made Amazon a differentiated success.

Question 2

When an industry is mature,a ______________ strategy is considered to be one of the most effective approaches for a new entrant.
A) focus
B) differentiation
C) overall low-cost
D) small business

Accepted Answer

Most start-ups enter industries that are mature, where growth in demand tends to be slow and there are often many competitors. If a start-up wants to get a piece of the action, it often has to take business away from an existing competitor. If a start-up enters a market with a broad or aggressive strategy, it is likely to evoke retaliation from a more powerful competitor. Young firms can often succeed best by finding a market niche where they can get a foothold.

Question 3

Smell-O-Vision designed an invention to pump odors into movie theatres.It flopped,in spite of its innovativeness.What kind of new entry strategy was the company using to penetrate the market?
A) imitative
B) pioneering
C) adaptive
D) differentiated

Accepted Answer

Smell-O-Vision, an invention designed to pump odors into movie theatres from the projection room at pre-established moments in a film. It was tried only once (for the film Scent of a Mystery) before it was declared a major flop. It definitely was innovation, but it was hardly a good idea at the time. New entrants with a radical new product or highly innovative service may change the way business is conducted in an industry. This kind of breakthrough of creating new ways to solve old problems or meeting customer needs in a unique new way is referred to as a pioneering new entry.

Question 4

Which of the below best describes the competitive tendencies of small firms?
A) Small firms tend to signal their competitive actions long before they launch those actions, because they lack legitimacy in the marketplace
B) Small firms typically have more resources available as they undertake competitive attacks than do large firms.
C) Small firms are more nimble and can respond quickly to competitive attacks.
D) Small firms are more nimble and cannot respond quickly to competitive attacks.

Accepted Answer

Consider the role of firm age and size in calculating a company's ability to respond. Most entrepreneurial new ventures start out small. The smaller size makes them more nimble compared to large firms so they can respond quickly to competitive attacks.

Question 5

When any two firms have both a high degree of market commonality and highly similar resources,a ______________ threat is present.
A) weaker competitive
B) stronger competitive
C) successful marketing
D) stronger marketing

Accepted Answer

When any two firms have both a high degree of market commonality and highly similar resource bases, a stronger competitive threat is present. Such a threat, however, may not lead to competitive action. On the one hand, a market rival may be hesitant to attack a company that it shares a high degree of market commonality with because it could lead to an intense battle. On the other hand, once attacked, rivals with high market commonality will be much more motivated to launch a competitive response.

Question 6

BCG authors Stalk and Lachenauer published a book in which they listed competitive strategy for winning against incumbent rivals.Which of the following is not one of their suggested strategies?
A) devastate profit sanctuaries of rivals
B) plagiarize with pride and deceive the competition
C) unleash massive and overwhelming force
D) lower competitor costs

Accepted Answer

But competitive attacks come from many sources besides new entrants. Some of the most intense competition is among incumbent rivals intent on gaining strategic advantages. Winners in business play rough and don't apologize for it, according to Boston Consulting Group authors George Stalk, Jr. and Rob Lachenauer in their book Hardball: Are You Playing to Play or Playing to Win? Their five strategies are: devastate profit sanctuaries of rivals, plagiarize with pride, deceive the competition, unleash massive and overwhelming force, and raise costs of competitors.

Question 7

Tom Monahan,a business creativity coach,says that every new idea is merely a spin of an old idea.A company that enters the market by offering a product or service that is somewhat new and sufficiently different in order to create value for customers by capitalizing on current trends is using which new entry strategy?
A) imitative
B) pioneering
C) adaptive
D) differentiated

Accepted Answer

Most new entrants use a strategy somewhere between pure imitation and pure pioneering. That is, they offer a product or service that is somewhat new and sufficiently different to create new value for customers and capture market share. Such firms are adaptive in the sense that they are aware of marketplace conditions and conceive entry strategies to capitalize on current trends.

Question 8

Square provides a means for small businesses to process credit and debit card sales without signing up for a traditional credit card arrangement of monthly fees and minimum charges.It used which new entry strategy to enter the market initially?
A) imitative
B) pioneering
C) adaptive
D) differentiated

Accepted Answer

Whereas pioneers are often inventors or tinkerers with new technology, imitators usually have a strong marketing orientation. They look for opportunities to capitalize on proven market successes. An imitative new entry strategy is used by entrepreneurs who see products or business concepts that have been successful in one market niche or physical locale and introduce the same basic product or service in another segment of the market. While Square has quickly established itself in the market, it now faces strong competition from major competitors, including Intuit and PayPal.

Question 9

Which of the following is not a factor that makes it more difficult for new ventures to be successful as differentiators?
A) The strategy is thought to be expensive to put into action.
B) Establishing a brand, important to a differentiation strategy, is thought to be expensive.
C) Superior innovation is often very costly.
D) Customer service is often costly, but it does not affect a differentiation strategy.

Accepted Answer

There are several factors that make it more difficult for new ventures to be successful as differentiators. For one thing, the strategy is generally thought to be expensive to enact. Differentiation is often associated with strong brand identity, and establishing a brand is usually considered to be expensive because of the cost of advertising and promotion, paid endorsements, exceptional customer service, etc. Differentiation successes are sometimes built on superior innovation or use of technology. These are also factors where it may be challenging for young firms to excel relative to established competitors.

Question 10

Which of the following is not one of the reasons a company might launch new competitive actions?
A) to obtain first mover advantages
B) to improve market position
C) to capitalize on growing demand
D) to find new sources of raw materials

Accepted Answer

There are several reasons why companies launch new competitive actions, including to improve market position, capitalize on growing demand, expand production capacity, provide an innovative new solution, or obtain first mover advantages.

Question 11

According to the text,which of the following might does not make it difficult for entrepreneurial firms to effectively pursue a strategy of differentiation?
A) Incumbent firms are constantly seeking opportunities to specialize in market niches.
B) Differentiation strategies are often expensive to enact.
C) It may be difficult for a young firm to establish a strong brand identity.
D) Implementing superior new technologies may be challenging for entrepreneurial firms.

Accepted Answer

There are several factors that make it more difficult for new ventures to be successful as differentiators. For one thing, the strategy is generally thought to be expensive to enact. Differentiation is often associated with strong brand identity, and establishing a brand is usually considered to be expensive because of the cost of advertising and promotion, paid endorsements, exceptional customer service, etc. Differentiation successes are sometimes built on superior innovation or use of technology.

Question 12

Aircraft makers Boeing and Airbus have a high degree of ______________ because they make very similar products and have many buyers in common.
A) dynamic capabilities
B) market commonality
C) first mover advantages
D) equity funding

Accepted Answer

Market commonality is whether or not competitors are vying for the same customers and how many markets they share in common. For example, aircraft manufacturers Boeing and Airbus have a high degree of market commonality because they make very similar products and have many buyers in common.

Question 13

Entrepreneurial firms that pursue a low-cost leadership strategy use all of the following to achieve lower costs except _____________.
A) cost-saving technology such as the Internet
B) simple organizational structures
C) rapid decision making
D) extensive investment in order to achieve economies of scale

Accepted Answer

Compared to large firms, new ventures often have simple organizational structures that make decision making both easier and faster. The smaller size also helps young firms change more quickly when upgrades in technology or feedback from the marketplace indicate that improvements are needed.

Question 14

The Wall Street Journal and the New York Times have seen the intensity of their rivalry increase.One factor driving this is that the Wall Street Journal has moved from financial news reporting to general national and global news reporting and finally,to adding local New York news.The rivalry of these two news providers has increased due to _____________.
A) increased dynamic capabilities
B) increased market commonality
C) erosion of first mover advantages
D) the choice of tactical over strategic actions

Accepted Answer

Market commonality is whether or not competitors are vying for the same customers and how many markets they share in common. Here, the changes to Wall Street Journal reporting means the two newspapers are now competing for the same customers.

Question 15

In 2005,Plum Organics entered the market with organic baby food and snack foods for children.It now has over 20 products and is listed at number 63 on the Inc 500 list of fastest growing private companies.It used which new entry strategy in 2005?
A) imitative
B) pioneering
C) adaptive
D) differentiated

Accepted Answer

Most new entrants use a strategy somewhere between pure imitation and pure pioneering. That is, they offer a product or service that is somewhat new and sufficiently different to create new value for customers and capture market share. Such firms are adaptive in the sense that they are aware of marketplace conditions and conceive entry strategies to capitalize on current trends.

Question 16

The new entry strategy that a firm choses is dependent upon the ______________ and the ______________ of the new business concept.
A) riskiness; cost
B) riskiness; potential sales
C) idea; innovativeness
D) riskiness; innovativeness

Accepted Answer

In some respects, any type of entry into a market for the first time may be considered entrepreneurial. But the entry strategy will vary depending on how risky and innovative the new business concept is.

Question 17

When launching a new venture,finding a way to begin doing business must ______________ generate cash flow,build credibility,attract good employees,and overcome the liability of newness.
A) slowly
B) quickly
C) steadily
D) painlessly

Accepted Answer

One of the most challenging aspects of launching a new venture is finding a way to begin doing business that quickly generates cash flow, builds credibility, attracts good employees, and overcomes the liability of newness. The idea of an entry strategy or entry wedge describes several approaches that firms may take to get a foothold in a market.

Question 18

One of the ways entrepreneurs achieve success is by using resources more efficiently.This is an example of how entrepreneurs use ______________ strategy.
A) an imitative
B) a low-cost leader
C) a differentiation
D) a combination

Accepted Answer

One of the ways entrepreneurial firms achieve success is by doing more with less. By holding down costs or making more efficient use of resources than larger competitors, new ventures are often able to offer lower prices and still be profitable. Thus, under the right circumstances, a low-cost leader strategy is a viable alternative for some new ventures.

Question 19

Intense rivalry involving actions and responses among similar competitors vying for the same customers in a marketplace is known as _____________.
A) competitive dynamics
B) resource similarity
C) threat of substitutes
D) pioneering new entry

Accepted Answer

Competitive dynamics is the term for an intense rivalry, involving actions and responses, among similar competitors vying for the same customers in a marketplace.

Question 20

Pandora entered the radio business in 2000 using the Music Genome Project system that analyzes music for its underlying traits as a means to distinguish itself.It was using ______________ entry strategy.
A) a pioneering
B) an imitative
C) an adaptive
D) a creative

Accepted Answer

Pandora pioneered a new way to broadcast music. This kind of breakthrough of creating new ways to solve old problems or meeting customer needs in a unique new way is referred to as a pioneering new entry.

Quiz 8: Entrepreneurial Strategy and Competitive Dynamics

Amazon is an example of a company that used the differentiation strategy to enter the market.The differentiation features included _____________.

When an industry is mature,a ______________ strategy is considered to be one of the most effective approaches for a new entrant.

Smell-O-Vision designed an invention to pump odors into movie theatres.It flopped,in spite of its innovativeness.What kind of new entry strategy was the company using to penetrate the market?

Which of the below best describes the competitive tendencies of small firms?

When any two firms have both a high degree of market commonality and highly similar resources,a ______________ threat is present.

BCG authors Stalk and Lachenauer published a book in which they listed competitive strategy for winning against incumbent rivals.Which of the following is not one of their suggested strategies?

Square provides a means for small businesses to process credit and debit card sales without signing up for a traditional credit card arrangement of monthly fees and minimum charges.It used which new entry strategy to enter the market initially?

Which of the following is not a factor that makes it more difficult for new ventures to be successful as differentiators?

Which of the following is not one of the reasons a company might launch new competitive actions?

According to the text,which of the following might does not make it difficult for entrepreneurial firms to effectively pursue a strategy of differentiation?

Aircraft makers Boeing and Airbus have a high degree of ______________ because they make very similar products and have many buyers in common.

Entrepreneurial firms that pursue a low-cost leadership strategy use all of the following to achieve lower costs except _____________.

In 2005,Plum Organics entered the market with organic baby food and snack foods for children.It now has over 20 products and is listed at number 63 on the Inc 500 list of fastest growing private companies.It used which new entry strategy in 2005?

The new entry strategy that a firm choses is dependent upon the and the of the new business concept.

When launching a new venture,finding a way to begin doing business must ______________ generate cash flow,build credibility,attract good employees,and overcome the liability of newness.

One of the ways entrepreneurs achieve success is by using resources more efficiently.This is an example of how entrepreneurs use ______________ strategy.

Intense rivalry involving actions and responses among similar competitors vying for the same customers in a marketplace is known as _____________.

Pandora entered the radio business in 2000 using the Music Genome Project system that analyzes music for its underlying traits as a means to distinguish itself.It was using ______________ entry strategy.