Deck 6: Strengthening a Companys Competitive Position: Strategic Moves, timing, and Scope of Operations

Question 1

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

A)Excluding volume discounts or avoiding better financing terms in order to maintain current profitability levels
B)Avoiding a competitor's clients because their loyalty will not allow them to switch
C)Adhering to current product features and models to ensure that resources are not diverted toward unproductive efforts
D)Trimming the length of warranties to save money
E)Gaining product line exclusivity to force competitors to use other distributors

Answer 1

E

Question 2

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

A)Leapfrogging competitors by being the first adopter of next-generation technologies or first to market with next-generation products
B)Offering an equally good or better product at a lower price
C)Blocking the avenues open to challengers
D)Attacking the competitive weakness of rivals
E)Capturing unoccupied or less contested territory by maneuvering around

Answer 2

C

Question 3

A blue ocean strategy

A)is an offensive attack used by a market leader to steal customers away from unsuspecting smaller rivals.
B)involves a preemptive strike to secure an advantageous position in a fast-growing market segment.
C)works best when a company is the industry's low-cost leader.
D)offers growth in revenues and profits by discovering or inventing a new industry or distinct market segment that renders rivals largely irrelevant and allows a company to create and capture altogether new demand.
E)involves the use of highly creative,never-used-before strategic moves to attack the competitive weaknesses of rivals.

Answer 3

D

Question 4

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

A)Publicly committing to a company policy of matching competitors' terms or pricing
B)Making a strong counter-response to the moves of weak competitors
C)Publicly announcing management's commitment to maintain market share
D)Maintaining a war chest of cash and marketable securities
E)Announcing strong quarterly earnings potential to financial analysts

Question 5

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

A)involves random offensive attacks used by a market leader to steal customers away from unsuspecting smaller rivals.
B)involves undertaking surprise moves to secure an advantageous position in a fast-growing and profitable market segment;usually the guerrilla signals rivals that it will use deep price cuts to defend its newly won position.
C)works best if the guerrilla is the industry's low-cost leader.
D)involves pitting a small company's own competitive strengths head-on against the strengths of much larger rivals.
E)involves unexpected attacks (usually by a small to medium-sized competitor)to grab sales and market share from complacent or distracted rivals.

Question 6

First-mover advantages are unlikely to be present in which one of the following instances?

A)When pioneering helps build a firm's image and reputation with buyers
B)When first-time customers remain strongly loyal to pioneering firms in making repeat purchases
C)When early commitments to new technologies,new-style components,new or emerging distribution channels,and so on can produce an absolute cost advantage over rivals
D)When moving first can constitute a preemptive strike,making imitation extra hard or unlikely
E)When rapid market evolution (due to fast-paced changes in technology or buyer preferences)presents opportunities to leapfrog a first-mover's products with more attractive next-version products

Question 7

Which one of the following is not an offensive strategy option?

A)Adopting or improving on good ideas of other companies (rivals or otherwise)
B)Deliberately attacking those market segments where key rivals make big profits
C)Launching a preemptive strike to capture a rare opportunity
D)Offering an equally good or better product at a lower price
E)Introducing new features or models to fill vacant niches in its overall product offering and better match the product offerings of key rivals

Question 8

Being first to initiate a strategic move can have a high payoff in all but which one of the following instances?

A)When pioneering helps build a firm's image and reputation with buyers
B)When first-time customers remain strongly loyal to pioneering firms in making repeat purchases
C)When early commitments to new technologies,new-style components,new or emerging distribution channels,and so on can produce an absolute cost advantage over rivals
D)When moving first can constitute a preemptive strike,making imitation extra hard or unlikely
E)When pioneering leadership is costlier than followership

Question 9

The race among rivals for industry leadership is more likely to be a marathon rather than a sprint when

A)the market depends on the development of complementary products or services that are currently not available,buyers have high switching costs,and influential rivals are in position to derail the efforts of a first mover.
B)fast followers find it easy to leapfrog the pioneer with even better next-generation products of their own.
C)entry barriers are high,substitute products or services are readily available,and buyers are prone to negotiate aggressively for better terms and lower prices.
D)there are nearly always big advantages to being a slow mover rather than an early mover,especially in regard to avoiding the "mistakes" of first or early movers.
E)new industry or market segments are yet to be developed and create altogether new consumer demand.

Question 10

First-mover disadvantages (or late-mover advantages)rarely arise when?

A)Rapid market evolution gives fast followers an opening to leapfrog the pioneer with next-generation products of their own
B)The market response is strong and the pioneer gains a monopoly position that enables it to recover its investment
C)The marketplace remains skeptical about the benefits of a new technology or product being pioneered by a first mover
D)The costs of pioneering are much higher than being a follower and only negligible learning/experience curve benefits accrue to the pioneer
E)The pioneer's products are somewhat primitive and do not live up to buyer expectations,allowing clever followers to win disenchanted buyers with better-performing products

Question 11

A company's menu of strategic choices to supplement its decision to employ one of the five basic competitive strategies does not include

A)whether and when to employ defensive strategies to protect the company's market position.
B)whether to integrate backward or forward into more stages of the industry value chain.
C)whether to employ a preemptive strike type of green ocean strategy.
D)whether and when to go on the offensive and initiate aggressive strategic moves to improve the company's market position.
E)whether to bolster the company's market position via acquisition or merger and/or whether to enter into strategic alliances or partnership arrangements with other enterprises.

Question 12

Launching a preemptive strike type of offensive strategy entails

A)cutting prices below a weak rival's costs.
B)moving first to secure an advantageous competitive assets that rivals cannot readily match or duplicate.
C)using hit-and-run tactics to grab sales and market share away from complacent or distracted rivals.
D)attacking the competitive weaknesses of rivals.
E)leapfrogging into next-generation products and technologies,thus forcing rivals to play catch-up.

Question 13

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

A)FedEx in overnight package delivery
B)Walmart's logistics and distribution in the retail industry
C)Cirque de Soleil in the live entertainment industry
D)Gilt Groupe in the luxury flash sale industry
E)Starbucks in the coffee shop industry

Question 14

Which of the following choices is not an additional strategic choice that a company makes once it has decided to employ a particular generic competitive strategy?

A)go on the offensive and initiate aggressive strategic moves to improve the company's market position.
B)bolster the company's market position by merging with or acquiring another company.
C)form strategic alliances and collaborative partnerships to add to its accumulation of resources and competitive capabilities.
D)integrate forward or backward into more stages of the industry value chain.
E)discontinue disruptive product innovation.

Question 15

Which one of the following is an example of an offensive strategy?

A)Blocking the avenues open to challengers
B)Signaling challengers that retaliation is likely
C)Pursuing continuous product innovation to draw sales and market share away from less innovative rivals
D)Introducing new features or models to fill vacant niches in its overall product offering and better match the product offerings of key rivals
E)Maintaining a war chest of cash and marketable securities

Question 16

The purposes of defensive strategies include

A)discouraging deep price discounting on the part of ambitious rivals seeking to capture additional sales and market share.
B)lowering the risk of being attacked by rivals,weakening the impact of any attack that occurs,and influencing challengers to aim their offensive efforts at other rivals.
C)insulating a company from the impact of competitive pressures and industry driving forces.
D)weakening competitors in ways that make them largely irrelevant.
E)widening a company's competitive advantage over its rivals.

Question 17

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 competitive attack?

A)Granting volume discounts or better financing terms to dealers/distributors and providing discount coupons to buyers to help discourage them from experimenting with other suppliers or brands
B)Signaling challengers that retaliation is likely in the event they launch an attack
C)Publicly committing the company to a policy of matching a competitors' terms or prices
D)Maintaining a war chest of cash and marketable securities
E)Challenging struggling runner-up firms that are on the verge of going under

Question 18

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

A)Market leaders that are vulnerable
B)Runner-up firms with weaknesses in areas where the offensive-minded challenger is strong
C)Small local and regional companies with limited capabilities
D)Struggling enterprises that are on the verge of going under
E)Other offensive-minded companies with a sizable war chest of cash and marketable securities

Question 19

Which one of the following is not a good example of a defensive strategy to protect a company's market share and competitive position?

A)Adding new features or models and otherwise broadening the product line to close off vacant niches and gaps to opportunity-seeking challengers
B)Thwarting the efforts of rivals to attack with lower prices by maintaining economy-priced options of its own
C)Engaging in a preemptive strike strategy in an effort to discourage rivals from being aggressive
D)Signaling challengers that retaliation is likely in the event that they launch an attack
E)Making early announcements about impending new products or price changes to induce potential buyers to postpone switching

Question 20

A blue ocean type of offensive strategy

A)refers to initiatives by a market leader to steal customers away from unsuspecting smaller rivals.
B)involves a preemptive strike to secure an advantageous position in a fast-growing market segment.
C)entails attacking rivals head-on with deep price discounts and continuous product innovation.
D)involves abandoning efforts to beat out competitors in existing markets and,instead,inventing a new industry or new market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand.
E)involves the use of surprise hit-and-run guerrilla tactics to harass money-losing rivals and drive them into bankruptcy.

Question 21

Which of the following is not among the intended outcomes of horizontal merger and acquisition strategies?

A)Extending the company's business into new product categories
B)Leading the convergence of industries whose boundaries are being blurred by changing technologies and new market opportunities
C)Obtaining quick access to new technologies or complementary resources and capabilities
D)Expanding a company's geographic coverage
E)Suppressing a rival's breakthroughs in management or technology

Question 22

Mergers and acquisitions

A)are nearly always successful in achieving their desired purpose (unlike strategic alliances and collaborative partnerships).
B)all too frequently do not produce the hoped-for outcomes.
C)are generally more effective in securing a new competitive advantage than in protecting an existing competitive advantage.
D)are highly risky because of the financial drain that comes from using the company's cash resources to pay for the costs of the merger or acquisition.
E)are usually more successful in helping a company's shift from one competitive strategy to another than in improving a company's competitive strength and resource capabilities.

Question 23

The difference between a merger and an acquisition is

A)a merger involves one company purchasing the assets of another company with cash,whereas an acquisition involves one company becoming the owner of another company by buying all of the shares of its common stock.
B)a merger is the combining of two or more companies into a single corporate entity (with the newly created company often taking on a new name),whereas an acquisition is a combination in which one company,the acquirer,purchases and absorbs the operations of another,the acquired.
C)nonexistent;in both instances,two companies become one.
D)the brands of both companies are retained in a merger,whereas with an acquisition,there is only one surviving brand name.
E)a merger involves two or more companies deciding to adopt the same strategy,whereas an acquisition involves one company becoming the owner of another company but with each company still pursuing its own separate strategy.

Question 24

A good example of forward vertical integration is a

A)producer of organic vegetables deciding to acquire a compost company.
B)footwear manufacturer developing its own-branded retail stores.
C)crude oil refiner purchasing an oil well drilling and exploration company.
D)hospital opening a nursing home for the aged.
E)maker of prescription drugs acquiring a chemical manufacturer.

Question 25

What does the scope of the firm refer to?

A)The firm's capability to employ vertical integration strategies
B)The combining of two or more companies into a single corporate entity (with the newly created company often taking on a new name)
C)The range of activities the firm performs internally and the breadth of its product offerings,the extent of its geographic market,and its mix of businesses
D)The ability of the firm to gain competitive advantage based on where it locates its various value chain activities
E)The ability of the firm to prevent foreign competition from affecting the market

Question 26

Merger and acquisition strategies

A)are never prone to mistakes,such as deciding which activities to leave alone and which activities to meld into their own operations and systems.
B)may offer considerable cost-saving opportunities and can be beneficial in helping a company try to invent a new industry and lead the convergence of industries whose boundaries are being blurred by changing technologies and new market opportunities.
C)are a particularly effective way of pursuing blue ocean and outsourcing strategies.
D)seldom are a superior strategic alternative to forming alliances or partnerships with these same companies because of the financial drain of using the company's cash resources to accomplish the merger or acquisition.
E)are one of the best ways to help a company strongly differentiate its product offering and use a differentiation strategy to strengthen its market position.

Question 27

For backward vertical integration into the business of suppliers to be a viable and profitable strategy,a company must

A)have considerable expertise in supply chain management,transportation logistics,and inventory control techniques.
B)be able to achieve the same scale economies as outside suppliers and match or beat suppliers' production efficiency with no drop in quality.
C)have large state-of-the-art production facilities so that it can fully capture all economies of scale in producing parts and components.
D)have core competences in R&D,product design and engineering,and distribution logistics so that it will have adequate capabilities to produce and distribute parts and components in a timely and cost-effective manner.
E)have a distinctive competence in production process technology and at least a core competence in manufacturing R&D.

Question 28

________ is the extent to which a firm's internal activities encompass one,some,many,or all activities that make up an industry's entire value chain system.

A)Vertical scope
B)Vertical integration
C)Horizontal scope
D)Horizontal integration
E)Scoping strategy

Question 29

Mergers and acquisitions are often driven by such strategic objectives as to

A)expand a company's geographic coverage,extend its business into new product categories,or gain quick access to new technologies or other resources and capabilities.
B)weaken the bargaining power of either key suppliers or key customers.
C)reduce the company's vulnerability to industry driving forces.
D)facilitate a company's shift from one type of competitive strategy to another.
E)secure a higher credit rating and better access to additional financial capital.

Question 30

Which of the following is not a typical strategic objective or benefit that drives mergers and acquisitions?

A)To gain quick access to new technologies or other resources and capabilities
B)To create a more cost-efficient operation out of the combined companies
C)To fundamentally alter a company's trajectory and improve its business outlook
D)To expedite shifting from one strategy to another and gain better access to additional financial capital
E)To extend a company's business into new product categories and/or expand a company's geographic coverage

Question 31

Market conditions and factors that tend not to favor first movers include

A)growth in demand that depends on the development of complementary products or services that are not currently available and new industry infrastructure that is needed before buyer demand can surge.
B)quick market penetration and strong loyalty among first-time customers.
C)buyer behavior that is readily attracted to new technology or product features.
D)conditions that make imitation difficult and absolute cost advantages that accrue to those who make early commitments to new technologies,components,or distribution channels.
E)when technology is not rapidly evolving and buyers' expectations are not likely to be subject to change.

Question 32

A good example of backward vertical integration is a

A)maker of prescription pharmaceuticals acquiring a chain of drugstores.
B)consumer products manufacturer acquiring a supermarket chain.
C)crude oil refiner purchasing gas stations.
D)footwear manufacturer developing own-branded retail stores.
E)producer of organic vegetables deciding to acquire a compost company.

Question 33

________ is the range of product and service segments that the firm serves within its market.

A)Product outsourcing
B)Joint venture partnership
C)Vertical scope
D)Vertical integration
E)Horizontal scope

Question 34

Vertical integration strategies

A)extend a company's competitive and operating scope because its operations extend across more parts of the total industry value chain.
B)are one of the best strategic options for helping companies win the race for global market leadership.
C)are a cost-effective means of expanding a company's lineup of products and services.
D)are particularly effective in boosting a company's ability to expand into additional geographic markets,particularly the markets of foreign countries.
E)are a good strategy option for improving a company's supply chain management capabilities,pursuing efforts to remodel a company's value chain,achieving direct control over the costs of performing value chain activities,and gaining access to buyers.

Question 35

The two most compelling reasons for a company to pursue vertical integration (either forward or backward)are to

A)expand into foreign markets and/or control more of the industry value chain.
B)broaden the firm's product line and/or avoid the need for outsourcing.
C)enable use of offensive strategies and/or gain a first-mover advantage over rivals in revamping the industry value chain.
D)strengthen the company's competitive position and/or boost its profitability.
E)achieve product differentiation and/or lengthen the company's value chain to include more activities performed in-house and thereby gain greater ability to reduce internal operating costs.

Question 36

Which of the following is not a potential advantage of backward vertical integration?

A)The increase in a company's differentiation capabilities and the possibility of a differentiation-based competitive advantage
B)Reduced vulnerability to powerful suppliers (who may be inclined to raise prices at every opportunity)
C)Reduced costs
D)Reduced risks of disruptions in obtaining crucial components or support services
E)Reduced business risk because of controlling a bigger portion of the overall industry value chain

Question 37

Merger and acquisition strategies sometimes fail because of the

A)development of effective integration plans that would be conducive to employee satisfaction.
B)advertising messages that detail the merger announcement.
C)creation of management-employee programs that would foster better communication.
D)misinterpretation of the cultural differences,like employee disenchantment and low morale,differences in management styles and operating procedures,and operations integration decision mistakes.
E)execution of functional and integration activity,while sustaining and capitalizing on the combined sources of revenue.

Question 38

Why do mergers and acquisitions sometimes fail to produce anticipated results?

A)Cost savings exceed management's wildest expectations.
B)The morale of key employees involved in the corporate combination reaches new highs because they embrace the changes.
C)Gains in competitive capabilities materialize rapidly,resulting in instant synergies.
D)Efforts to mesh corporate cultures meet with unconditional acceptance from organization members.
E)Differences in management styles and operating procedures can prove hard to resolve.

Question 39

The two best reasons for investing company resources in vertical integration (either forward or backward)are to

A)speed entry into foreign markets and/or exercise stronger control over operating costs.
B)broaden the firm's product line and/or enable the company to charge a premium price for its product/service.
C)gain a first-mover advantage in adopting new production technologies and/or employ potent defensive strategies.
D)strengthen the company's competitive position and/or boost its profitability.
E)achieve greater product differentiation and/or gain better access to prospective buyers.

Question 40

Which one of the following statements about backward vertical integration is false?

A)What makes backward vertical integration such an attractive strategic option is the opportunity to capture the profit margins of suppliers and thereby increase the company's own profitability.
B)Backward vertical integration can produce a differentiation-based competitive advantage when a company,by performing activities internally rather than utilizing outside suppliers,ends up with a better-quality product/service offering,improves the caliber of its customer service,or in other ways enhances the performance of its final product.
C)For backward integration to be a viable and profitable strategy,a company must be able to (1)achieve the same scale economies as outside suppliers and (2)match or beat suppliers' production efficiency with no drop in quality.
D)The best potential for being able to reduce costs via a backward integration strategy exists in situations where suppliers have outsized profit margins,where the item being supplied is a major cost component,and where the requisite technological skills are easily mastered or can be gained by acquiring a supplier with the desired technological know-how.
E)Potential advantages of backward integration include sparing a company the uncertainty of being dependent on suppliers for crucial components or support services and lessening a company's vulnerability to powerful suppliers inclined to raise prices at every opportunity.

Question 41

Which one of the following is not a strategically beneficial reason a company may enter into strategic partnerships or cooperative arrangements with key suppliers,distributors,or makers of complementary products?

A)To acquire or improve access to new markets
B)To expedite the development of promising new technologies or products
C)To enable greater vertical integration
D)To improve supply chain efficiency
E)To overcome deficiencies in technical and manufacturing expertise and to create desirable new skill sets and capabilities

Question 42

Which of the following is typically the strategic impetus for forward vertical integration?

A)Being able to control the wholesale/retail portion of the industry value chain
B)Having fewer disruptions in the delivery of the company's products to end users
C)Gaining better access to end users and better market visibility
D)Broadening the company's product line
E)Allowing the firm access to greater economies of scale

Question 43

Outsourcing strategies

A)are nearly always a more attractive strategic option than merger and acquisition strategies.
B)carry the substantial risk of raising a company's costs.
C)carry the substantial risk of making a company overly dependent on its suppliers.
D)increase a company's risk exposure to changing technology and/or changing buyer preferences.
E)involve farming out value chain activities presently performed in-house to outside specialists and strategic allies.

Question 44

The competitive attraction of entering into strategic alliances and collaborative partnerships is

A)in allowing companies to bundle resources and competencies that are more valuable in a joint effort than when kept separate.
B)reducing costs,transferring skills,and expanding the product line.
C)enabling greater vertical integration.
D)in allowing the partners to transfer intellectual property rights and proprietary information.
E)in helping the partners to increase their respective market shares.

Question 45

Which of the following is not one of the key benefits of employing an outsourcing strategy?

A)It allows a company to concentrate on its core business,leverage its key resources and core competencies,and do even better what it already does best.
B)It can hollow out a firm's own capabilities and lose touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success.
C)It reduces the company's risk exposure to changing technology and/or buyer preferences.
D)It improves organizational flexibility and speeds time to market.
E)It involves an activity that can be performed better or more cheaply by outside specialists.

Question 46

A strategic alliance

A)is a collaborative arrangement in which companies join forces to defeat mutual competitive rivals.
B)involves two or more companies joining forces to pursue vertical integration.
C)is a formal agreement between two or more companies in which there is strategically relevant collaboration of some sort,joint contribution of resources,shared risk,shared control,and mutual dependence.
D)is a partnership between two companies that is typically intended to eliminate the need to engage in outsourcing.
E)is usually a cheaper and more effective way for companies to join forces than is a merger.

Question 47

Which of the following is not a typical reason that many alliances do not live up to expectations?

A)Inability of partners to work well together
B)Emergence of more attractive technological paths
C)Changing conditions make the purpose of the alliance obsolete
D)Disagreement over how to divide the added market share and profits gained from joint collaboration
E)Diverging objectives and priorities

Question 48

The Achilles' heel (or biggest danger/pitfall)of relying heavily on alliances and cooperative strategies is

A)that partners will not divide profits from the alliance in an equitable manner.
B)becoming dependent on other companies for essential expertise and capabilities.
C)incurring excessive administrative expenses associated with engaging in collaborative efforts.
D)having to compromise the company's own priorities and strategies in reaching agreements with partners.
E)that strategic allies frequently become rivals in the marketplace.

Question 49

Experience indicates that strategic alliances

A)are generally successful.
B)work well in cooperatively developing new technologies and new products but seldom work well in promoting greater supply chain efficiency.
C)work best when they are aimed at achieving a mutually beneficial competitive advantage for the allies.
D)stand a reasonable chance of helping a company reduce competitive disadvantage but very rarely form the basis of a durable competitive advantage over rivals.
E)are usually a company's best approach to building a distinctive competence.

Question 50

Entering into strategic alliances and collaborative partnerships can be competitively valuable because

A)these represent two highly effective ways for firms to achieve low-cost leadership and capture first-mover advantages.
B)these two strategies are a powerful means for companies to build loyalty and goodwill among customers that possess diverse needs and expectations.
C)they are quite effective in helping a company transfer the risks of threatening external developments to other companies.
D)working closely with outsiders is essential in developing new technologies and new products in virtually every industry.
E)cooperative arrangements with other companies are very helpful in racing against rivals to build a strong global presence and/or racing to seize opportunities on the frontiers of advancing technology.

Question 51

Bypassing regular sales channels in favor of Internet retailing can have strong appeal if it

A)raises distribution costs and ignores channel conflicts.
B)provides a relative cost disadvantage over rivals.
C)offers lower margins resulting in higher selling prices to end users.
D)includes partnering rather than competing with existing distributors.
E)consists of a significant social media component that creates channel conflict with dealers.

Question 52

The big risk of employing an outsourcing strategy is

A)the increased time it takes to respond effectively to the fresh strategic moves of rival firms.
B)hollowing out the competitive capabilities a company needs to be a master of its own destiny.
C)impairing a company's capability to be a leader in product innovation.
D)increased vulnerability to shifts in buyer demand.
E)increased costs of differentiating the company's product/service from those of competitors.

Question 53

The strategic impetus for forward vertical integration is to

A)gain better access to end users,improve market awareness,and/or include the end user's purchasing experience as a differentiating feature.
B)the opportunity to capture the profits being earned by forward distribution allies (and thereby increase the company's own profits).
C)reduce or eliminate disruptions in the delivery of the company's products to end users.
D)avoid channel conflict.
E)expand a company's geographic coverage.

Question 54

For a backward vertical integration strategy into the business of suppliers to be a viable and profitable,a company must possess

A)a distinctive competence in production process technology and at least a core competence in manufacturing R&D.
B)large state-of-the-art production facilities so that it can fully capture all economies of scale in producing parts and components.
C)considerable expertise in supply chain management,transportation logistics,and inventory control techniques.
D)the capability to achieve the same scale economies as outside suppliers and also match or beat suppliers' production efficiency with no drop in quality.
E)all kinds of capacity-matching skills and capabilities.

Question 55

Which of the following is not a typical reason that many alliances prove unstable or break apart?

A)Diverging objectives and priorities
B)An inability to work well together
C)The emergence of more attractive technological paths
D)Disagreement over how to divide the profits gained from joint collaboration
E)Changing conditions that make the purpose of the alliance obsolete

Question 56

Among the principal advantages of strategic alliances over vertical integration or horizontal mergers/acquisitions are

A)resource pooling and risk sharing,more adaptive response capabilities,and greater speed of deployment.
B)material additions to a company's technological capabilities,strengthening of the firm's competitive position,and boosting of its profitability.
C)the transactional and relational concepts of operating practices and competencies.
D)potential profitability of the alliance and related experience-curve economics.
E)the facilitation of best practices,more production capacity,and relevant synergistic savings.

Question 57

Backward integration involves

A)performing industry value chain activities previously performed by suppliers or other companies engaged in earlier stages of the value chain.
B)linking with businesses within the array of value chain activities to eliminate competition and broaden the product offering.
C)capitalizing on company's underutilized managerial capabilities for achieving greater synergistic cost advantages.
D)reducing the opportunity for achieving greater product differentiation.
E)developing new skills and business capabilities.

Question 58

Which of the following is not a strategic disadvantage of vertical integration?

A)Vertical integration boosts a firm's capital investment in the industry,thus increasing business risk if the industry becomes unattractive later.
B)Integrating backward into parts and components manufacture can impair a company's operating flexibility when it comes to changing out the use of certain parts and components.
C)Vertical integration limits a company's ability to achieve greater product differentiation and to exercise direct control over the costs of performing value chain activities.
D)Forward or backward integration often calls for radically different skills and business capabilities than the firm possesses.
E)Vertical integration poses all kinds of capacity-matching problems.

Question 59

The two big drivers of outsourcing are

A)a desire to reduce the company's investment in fixed assets and the need to narrow the scope of the company's in-house competencies and competitive capabilities
B)an increased ability to cut R&D expenses and an increased ability to avoid the problems of strategic alliances
C)that a smaller in-house workforce and a low investment in intellectual capital will produce cost savings
D)the ability to avoid capital investments that accompany vertical integration and a desire to reduce the company's risk exposure to changing technology and/or changing buyer preferences
E)that outsiders can often perform certain activities better or more cheaply,and outsourcing allows a firm to focus its entire energies on those activities that are at the center of its expertise (its core competencies)

Question 60

Strategic alliances are more likely to be long lasting-when

A)they involve collaboration with suppliers or distribution allies or when both parties conclude that continued collaboration is in their mutual interests.
B)the alliance involves partners based in countries with distinctly different cultures and consumer buying habits and preferences.
C)both partners are experienced with strategic alliances and routinely enter into collaborative agreements with firms in peripheral industries.
D)the alliance involves joining forces in R&D to develop new technologies cheaper than a company could develop the technology on its own.
E)each partner has considerable resource weaknesses in the marketplace.

Question 61

What are the strategic advantages of being a first mover? What are the strategic advantages of being a follower or late mover?

Question 62

In what sorts of circumstances is it strategically advantageous to be a fast follower or late mover as opposed to a first mover?

Question 63

What are the strategic advantages of a forward vertical integration strategy?

Question 64

What is a blue ocean strategy? What is its appeal,and what is its drawback?

Question 65

Why does a company racing to stake out a strong position in an industry of the future need strategic alliances?

Question 66

List four reasons that strategic alliances and collaborative partnerships might fail to live up to each partner's expectations.

Question 67

Identify at least three factors that can aid companies in forming a successful strategic alliance.

Question 68

Explain the pros and cons of bypassing regular sales channels in favor of direct sales and Internet retailing.

Question 69

What is the purpose of defensive strategy? Give at least two examples of defensive moves.

Question 70

What are the merits of outsourcing the performance of certain value chain activities as opposed to performing them in-house? Under what circumstances does outsourcing make good strategic sense?

Question 71

Under what sorts of circumstances are mergers with or acquisitions of other companies a better solution than entering into partnerships or alliances with these companies? How do mergers and/or acquisitions contribute to enhancing a company's position?

Question 72

Identify and briefly explain what is meant by each of the following terms:
a.Outsourcing strategy
b.Vertical integration strategy
c.First-mover advantage
d.First-mover disadvantage
e.Horizontal and vertical scope

Question 73

Strategic offensives should,as a general rule,be grounded in a company's strategic assets and employ a company's strengths to attack rivals.Define and discuss the term strategic assets and its significance in gaining a competitive advantage

Question 74

What are the strategic advantages of a backward vertical integration strategy?

Question 75

What are the strategic disadvantages of a vertical integration strategy?

Question 76

Instead of entering into an alliance or partnership,Verizon Wireless opts to merge with Yahoo! What are the reasons for preferring a merger to an alliance or partnership? Explain the other organizational mechanisms that are also preferable to alliances.

Question 77

Identify five objectives of a merger and acquisition strategy.

Question 78

What are the most common reasons companies enter into strategic alliances and collaborative partnerships?