Deck 5: Competitive Rivalry and Competitive Dynamics

Question 1

It is much easier for a competitor to implement strategic actions than tactical actions.

Answer 1

False

Question 2

In order to preserve resources for the most important competitive battles, firms with fewer resources are less likely to respond to tactical actions than to strategic actions.

Answer 2

False

Question 3

Competitive dynamics is the total set of actions and responses taken by a single firm competing within a market.

Answer 3

False

Question 4

Firms in a fast-cycle market are shielded from strong rivalry and increased imitation.

Question 5

A tactical competitive action involves a significant commitment of specific and distinctive organisational resources.

Question 6

A strategy's success is determined not only by a firm's initial competitive actions but also by how well it anticipates competitors' responses to them and by how well the firm anticipates and responds to its competitors' initial actions.

Question 7

Resource similarity plays an important role in a competitor's motivation to attack or respond.

Question 8

Although competitive rivalry affects all types of strategies, its most dominant influence is on a firm's core competencies.

Question 9

Competitive dynamics indicate that firms and their strategic actions are not mutually interdependent.

Question 10

First movers can gain a sustained competitive advantage when they reduce their costs through reverse engineering.

Question 11

The technology used by fast-cycle competitors is protected by patents and hard to imitate.

Question 12

Firms that are direct competitors will invariably have an intense rivalry.

Question 13

Market commonality increases the likelihood of competitive interaction in an industry.

Question 14

The probability of a competitive response to a competitive action is based partly on the reputation of the competitor.

Question 15

Firms competing against each other in several product or geographic markets are engaged in multi- market competition.

Question 16

Product quality is important in most industry settings, and it is a necessary, but insufficient, condition for successful strategy implementation.

Question 17

Multi-market competition increases competitive rivalry.

Question 18

Industry structure is the key driver of competitive behaviour.

Question 19

Larger firms are more able and more likely than smaller companies to launch competitive actions, and they tend to do so more quickly.

Question 20

In the global economy, competitive rivalry has a significant effect on a firm's business strategies.

Question 21

Compared to strategic actions, tactical actions usually have a:

A)more immediate effect
B)greater effect on overall corporate strategy
C)well-timed effect on a firm's corporate strategy
D)more delayed effect

Question 22

First movers are:

A)individuals who lead in the establishment of new industries
B)firms that are first to exit an industry that begins to enter a decline stage
C)firms that take an initial competitive action
D)individuals who move frequently as employment opportunities change in a locale

Question 23

First movers are often critical to firm success in industries experiencing:

A)changing consumer trends and rapid technological developments
B)rapid technological developments and relatively short product life cycles
C)globalisation and changing demographic trends
D)globalisation and increasing technological sophistication

Question 24

Competitive rivalry exists only when:

A)two or more firms establish their domains and do not challenge each other over those domains
B)two or more firms jockey with one another in pursuit of an advantageous market position
C)two or more firms jockey with international firms in pursuit of the world's dominant market position
D)a firm is willing to accept its market position without regard to its competitors' intentions

Question 25

A second mover is a(n):

A)firm that responds to a first mover's competitive action, often through imitation or a move designed to counter the effects of an action
B)firm that leads a competitive action in an industry
C)individual who imitates others in an industry to ensure career progress
D)individual who moves from a declining industry to a newly expanding industry

Question 26

A benefit of being a second mover is:

A)the absence of the need to be the largest firm in the industry
B)that a firm may be able to respond to first movers' competitive actions without the same risks and development costs
C)the absence of any risk
D)the ability to lead the industry into new areas of product development and gain customer loyalty from its move

Question 27

Awareness refers to:

A)a firm's incentive to take competitive action
B)a firm's ability to respond to a competitive action
C)the extent to which competitors recognise their mutual interdependence
D)firms' ability to compete against each other in several product markets

Question 28

The greater the resource imbalance between the acting firm and its competitors, the ________ the delay will be in the response of the firm with a resource disadvantage.

A)more likely
B)less likely
C)greater
D)smaller

Question 29

________ determine the extent to which two firms are competitors.

A)Relative size and degree of innovation market
B)Relative size and market similarity
C)Speed of response and quality
D)Market commonality and resource similarity

Question 30

Both ________ affect the awareness and motivation of a firm to undertake actions and responses.

A)first-mover advantages and corporate size
B)market commonality and resource similarity
C)management capabilities and competitive analysis
D)speed of management decisions and management actions

Question 31

In addition to market commonality, resource similarity, awareness, motivation and ability, firms evaluate three other factors - ________ - to predict how a competitor is likely to respond to competitive actions.

A)reputation, market potential and resource commitment
B)type of competitive action, reputation and market dependence
C)market dependence, resource commitment and retaliation
D)type of competitive action, relative size and relative innovativeness

Question 32

Firms with few competitive resources are more likely to:

A)respond to strategic actions
B)refuse to respond to competitive actions
C)respond to all competitive actions
D)respond to tactical actions

Question 33

The chief disadvantages of being a first mover is:

A)the high level of competition in the new marketplace
B)an inability to sustain a competitive advantage
C)the difficulty of obtaining new customers
D)the high degree of risk

Question 34

A competitive response is a(n):

A)move taken to counter the effects of a competitor's action
B)action taken to initiate a strategic change in an industry
C)ineffective action for a firm to pursue
D)move that applies only to for-profit enterprises

Question 35

As ________ of new firms fail, learning how to select the markets in which to compete and how to best compete within them is highly important.

A)65-75 per cent
B)70-80 per cent
C)75-85 per cent
D)80-90 per cent

Question 36

Research suggests that a firm with greater multi-market contact is ________ likely to initiate an attack and ________ likely to move (respond) aggressively when attacked.

A)less; more
B)more; more
C)more; less
D)less; less

Question 37

Quality is ________ competitive rivalry.

A)negatively related to
B)sufficient for
C)positively related to
D)not associated with

Question 38

Quality exists when:

A)a firm's goods meet or exceed customers' expectations
B)a firm's top management team seeks to continuously improve product quality
C)employees meet in small groups or circles and seek to develop solutions to problems facing the firm and work through any intergroup difficulties
D)a competitive advantage is assured for the firm

Question 39

Which of the following is an example of a strategic action?

A)Price cuts by Blockbuster
B)Use of product coupons by a local grocer
C)Boeing Corp's decision to commit its resources required to build the super-efficient 787
D)Price increases by Qantas

Question 40

Competitive dynamics refers to a series of:

A)competitive actions taken by only one firm in an industry
B)competitive actions taken by the industry leader
C)competitive actions and competitive responses initiated among firms competing within a given industry
D)competitive actions and competitive responses initiated among firms competing within numerous industries

Question 41

Competitive dynamics in fast-cycle markets often result in:

A)changing consumer tastes and rapid product upgrades
B)fast technology diffusion and quick product innovations
C)changing consumer tastes and fast technology diffusion
D)rapid product upgrades and quick product innovations

Question 42

Describe typical strategic actions of firms in fast-cycle markets.

Question 43

In slow-cycle markets, firms tend to sustain their competitive advantage through:

A)the use of patents
B)rapid imitation of competitors
C)the use of differentiation strategies
D)increases in market size

Question 44

Describe three factors that affect the likelihood that a competitor will use strategic actions and tactical actions to attack its competitors.

Question 45

The competitive actions and responses that form a standard-cycle market's competitive dynamics are designed to seek large market shares, to gain customer loyalty through _______ and ________.

A)brand names; to control their operations in order to consistently provide the same positive experience for customers
B)brand names; to maintain efficiencies
C)better values; to control their operations in order to consistently provide the same positive experience for customers
D)better values; to maintain efficiencies

Question 46

Define market commonality? What are the characteristics of competition and rivalry when firms engage in multi-market competition?

Question 47

What is competitor analysis? What determines the extent to which firms are competitors?

Question 48

With which quality dimensions of goods and services are customers commonly concerned?

Question 49

Define and differentiate competitive rivalry, competitive behaviour and competitive dynamics.

Question 50

What factors contribute to the likelihood of a response to a competitive action?

Question 51

In fast-cycle markets, firms achieve their competitive advantage by:

A)increasing the speed of innovation
B)rapid imitation of competitors
C)the use of differentiation strategies
D)increasing market size

Question 52

Name and describe the two types of competitive actions.

Question 53

In fast-cycle markets, ________ facilitate rapid imitation.

A)the speed of innovation and technology diffusion
B)reverse engineering and the rate of technology diffusion
C)reverse engineering and competitor intelligence
D)the rate of technology diffusion and competitor intelligence

Question 54

Describe the drivers of competitive actions and responses.

Question 55

Markets that are often described as dynamic and innovative are called:

A)slow-cycle markets
B)fast-cycle markets
C)standard-cycle markets
D)sheltered markets

Question 56

What are the advantages and disadvantages of being a first mover, second mover and late mover?

Question 57

Which of the following is an example of a product considered to be in a standard-cycle market?

A)Boeing's aircrafts
B)Coca-Cola's soft drinks
C)Caterpillar's large-scale equipment
D)McIlhenny Company's Tabasco sauce

Question 58

The telecommunications industry is a:

A)slow-cycle market
B)standard-cycle market
C)fast-cycle market
D)sustained market