Deck 9: Competitive Dynamics

Question 1

From the opening vignette for the chapter we see that game console manufacturers have increased the frequency with which they introduce new consoles. In the last seven years eight new or updated consoles have been brought to market.

Answer 1

True

Question 2

Tactics are short-term competitive moves and countermoves, as opposed to those that create long-term direction and investments.

Answer 2

True

Question 3

A benign environment has slowly growing or declining revenues, frequent price wars, and a focus on cost containment.

Answer 3

False

Question 4

Hostile environments seem to be characteristic of industries that are approaching or have reached the maturity stage of the industry life cycle.

Question 5

Benchmarking requires a company to identify the best practices used by unrelated companies outside of its own industry.

Question 6

A set of strategy or competitive maps showing the current relative market positions and historical trending of companies in an industry is unlikely to help a company predict competitor moves since past behavior does not predict future behavior well.

Question 7

Classifying companies as Prospectors, Analyzers, Defenders or Reactors depending on their relative industry positions helps one to predict the likely strategic and tactical moves that companies will make.

Question 8

A company that tends to view the industry from its own perspective and that of the customer rather than being concerned with the competition is a Reactor.

Question 9

Prospectors are usually leaders of change in an industry and quite willing to cannibalize their own products.

Question 10

A Defender carefully attends to a limited number of key criteria, analyzes their costs and vigorously defends its competitive position against all rivals.

Question 11

An Analyzer merely reacts (often very slowly) to changes or conditions in the competitive environment rather than actively seeking advantages and is usually an unstable form of organization.

Question 12

A more detailed method used to predict competitor moves requires that one examine closely things like management behavior patterns, positions and "claims" to market spaces, and financial situations.

Question 13

Firms that find themselves in situations where their returns are not as they anticipated are more likely to act in unpredictable ways, such as by starting industry-damaging price wars.

Question 14

A company that provides a complete, detailed record of all available public information about a particular company, area, person, or situation offers what is known as a data development service.

Question 15

A firm's suppliers are not often a source of information about competitors since rivals typically use different suppliers.

Question 16

One might glean valuable information about competitors while attending industry conferences or listening to the speeches given by competitors' senior managers.

Question 17

There are significant ethical issues to be considered when talking to current or former employees of a competitor, especially when a current employee of a competitor is interviewing at one's company.

Question 18

The technique that causes organizations to consider dramatic shifts in their business environments over a set time period and then to map out a set of actions to take if warning signs of those shifts occur is called environmental impact analysis.

Question 19

Styles of tactical responses that are relatively passive include acquiescence and compromise.

Question 20

The tactical responses to competitive moves associated with manipulation, the most active tactical response style, include co-opt, influence, and control.

Question 21

Competitive responses to strategic threats, in contrast with those for tactical moves, include containment, shaping, and neutralization among others.

Question 22

The containment competitive response to a strategic threat involves forming a strategic alliance with the threatening organization or forming a group to influence the threatening organization by setting broad standards for accepted and acceptable practices in the industry.

Question 23

The annulment competitive response to a strategic threat often involves aggressive actions such as legal maneuvers, giving away benefits offered by a new competitor for free, or engaging in a process of continuously improving existing products.

Question 24

Two occasions when cooperation between competitors may be useful are when competition is unusually destructive or when collaboration can lead to developments that exceed the capacity of any one company.

Question 25

A strategic alliance is a joint venture or partnership formed with other companies (sometimes competitors) to develop a new technology, process, or other type of strategically important resource.

Question 26

According to the opening vignette for the chapter, which of the following is one of the major players in the video game industry?

A) Microsoft
B) Sony
C) Nintendo
D) All of the above are major players in the industry.

Question 27

Short-term competitive moves and countermoves are known as

A) strategic initiatives.
B) tactics.
C) strategic thrusts.
D) jabs or roundhouses.

Question 28

Which of the following is one of the characteristics of a benign industry environment?

A) Market demand exceeds supply.
B) The industry is extraordinarily cost-focused.
C) The industry is protected by one or more government regulations.
D) Managers of industry participants are generally kind and humane.

Question 29

Which of the following is not one of the characteristics of a hostile industry environment?

A) Growth is very slow.
B) Companies are unwilling to respond to new entrants.
C) There are continual price wars.
D) There is a focus on cost containment by competitors.

Question 30

Richard D'Aveni's concept of hypercompetition suggests that the only real source of competitive advantage is

A) first-order learning.
B) expert competitive intelligence.
C) speed.
D) a sound strategic plan.

Question 31

_______________ is a process through which a company compares its own processes and structure to that of other organizations, especially targeting direct competitors for the comparison.

A) benchmark(ing)
B) scenario contrasting
C) strategic targeting
D) identifying comparables

Question 32

This famous technology prediction claimed that the number of transistors placed on an integrated circuit would double about every two years.

A) the Intel postulate
B) Amdahl's argument
C) the processor theory
D) Moore's law

Question 33

We can classify organizations as Prospectors, Defenders, Analyzers or Reactors based on their ________, which may very well predict what they will do in the future.

A) sunk investments
B) past behaviors
C) organizational structures
D) management breadth

Question 34

This type of company tends to view the industry from its own perspective and that of customers rather than being concerned with the competition and is often a leader of industry change.

A) Analyzer
B) Defender
C) Prospector
D) Reactor

Question 35

This type of company is intensive rather than extensive; it usually focuses on a limited number of key criteria, analyzes their costs, and vigorously defends its competitive position against all competitors.

A) Prospector
B) Defender
C) Reactor
D) Analyzer

Question 36

This type of company responds--often very slowly--to conditions in the competitive environment and is an unstable form of organization.

A) Reactor
B) Analyzer
C) Prospector
D) Defender

Question 37

This type of company either has parts that behave like a Defender and parts that behave like a Prospector or is a firm that can switch between those two "personalities" without a significant negative impact on the organization.

A) Prospector
B) Defender
C) Reactor
D) Analyzer

Question 38

Which of the following is a technique, described in the text, for gathering competitive intelligence?

A) dumpster diving
B) tracking the flight plans of corporate aircraft
C) talking with suppliers
D) temporarily taking a job with a rival

Question 39

This is a company that provides a complete, detailed record of all available public information about any particular organization, area, person or situation.

A) an industry detective
B) a clipping service
C) Google
D) a private relations firm

Question 40

Which of the following is not a method described in the text for gathering competitive intelligence?

A) talking with disgruntled former employees of competitors
B) attending industry conferences and speeches
C) joining the fitness centers to which competitors' CEOs belong
D) talking with job candidates who currently work for competitors

Question 41

A technique that allows organizations to consider potentially dramatic shifts in their business environments over a set time frame and to map out a set of actions that can be taken should warnings of those shifts occur is called

A) scenario analysis.
B) secular trend analysis.
C) crisis management
D) likely impact analysis

Question 42

A style of tactical response that companies might use in dealing with regulators, direct competitors, and stakeholders is to

A) acquiesce.
B) compromise.
C) defy.
D) All of the above are styles of tactical responses.

Question 43

Manipulative and defiant tactical response styles are considered to be

A) passive
B) neutral
C) active
D) passive-aggressive

Question 44

A specific tactic associated with the "defy" tactical response style is

A) dismiss
B) challenge
C) attack
D) All of the above are specific tactics associated with the "defy" tactical response style.

Question 45

Should a threat be truly strategic, a competitive response such as ________ is needed to avoid a significant impact on the long-term performance of the company.

A) compromise
B) absorption
C) retrenchment
D) divestment

Question 46

The competitive response to a strategic threat that involves moves that include co-opting the threat by purchasing the threatening organization itself or forming a group to influence it by setting broad standards for acceptable practices is called

A) shaping.
B) containment.
C) neutralization.
D) annulment.

Question 47

This competitive response to a strategic threat is general adopted when the threat has spread widely. Threatened companies turn to very aggressive moves such as legal action, giving away the benefits offered by the new competitor for free, or engaging in a process of continuous improvement to existing products.

A) containment
B) absorption
C) neutralization
D) shaping

Question 48

When competition is unusually destructive or industry developments are desired that exceed the capacity of any one company, a ________ response with competitors may be needed.

A) cooperative
B) creative
C) governmental
D) tit-for-tat

Question 49

This is a joint venture or partnership formed with other companies (sometimes competitors) to develop a new technology, process, or other type of strategically important resource.

A) a research consortium
B) an integrated associative venture
C) a corporate marriage
D) a strategic alliance

Question 50

Briefly contrast and compare the characteristics of benign and hostile environments.

Question 51

As a first step to predicting the moves of competitors how can one classify organizations?

Question 52

How do companies respond to threats that are strategic in nature?