Question 1

Which of the following statements is incorrect regarding Benetton Group?

Accepted Answer

Benetton's traditional business model, which relies heavily on partnerships with regional sales agents and a less centralized control over production and distribution, may not be as well-suited for emerging markets, which often require more flexibility and adaptation to local conditions. Therefore, statement D is incorrect.

Question 2

Building layers of advantage is one of the elements of Hamel and Prahalad's framework for:

Accepted Answer

Building layers of advantage is part of Hamel and Prahalad's framework for competitive innovation, which involves creating multiple sources of competitive advantage to sustain a firm's market position.

Question 3

Michael Porter's five forces model and Rugman and D'Cruz's flagship model are both based on the concept of corporate individualism.

Accepted Answer

Michael Porter's five forces model focuses on industry structure and competitive forces, while Rugman and D'Cruz's flagship model centers on networks and relationships among firms, not on corporate individualism.

Question 4

The "layers of advantage" approach to global competitive innovation is based on using know-how developed by other companies.

Accepted Answer

The "layers of advantage" approach focuses on building a competitive edge through unique capabilities and resources, rather than relying on know-how developed by other companies.

Question 5

Many firms have gained competitive advantage by disadvantaging rivals through:

Accepted Answer

Competitive innovation allows firms to gain a competitive advantage by introducing new products, services, or processes that rivals may find difficult to match or exceed, thus disadvantaging them in the market.

Question 6

Caterpillar's attention was focused elsewhere when Komatsu made its first entry into Eastern Europe and gained ground.This is an example of:

Accepted Answer

The term "loose bricks" refers to opportunities that established companies might overlook, allowing new entrants to gain a foothold in the market. In this scenario, Caterpillar's lack of attention allowed Komatsu to enter and establish itself in Eastern Europe, exemplifying the concept of "loose bricks."

Question 7

What does the phrase factor conditions refer to? How can these factors be inherited or created? Describe Porter's categories of factor conditions.

Accepted Answer

The answer of What does the phrase factor conditions refer...

Question 8

The key to maintaining competitive advantage,according to W.Edwards Deming is:

Accepted Answer

W. Edwards Deming emphasized the importance of continuous improvement in processes and products as a fundamental principle for achieving and maintaining competitive advantage. This approach is central to his philosophy on quality management.

Question 9

In the case of Volkswagen,dealers are its key consumers while individual car buyers are the key consumers of the dealers.

Accepted Answer

Volkswagen's key consumers are the individual car buyers directly, although dealers play a crucial role in distribution and sales.

Question 10

Describe how competitive advantage can be created via strategic intent,giving examples of successful approaches of competitors.

Accepted Answer

The answer of Describe how competitive advantage can be created...

Question 11

Intel's focus on designing complex,expensive microprocessors for PCs enabled competitors to develop cheaper chip sets for non-PC electronics devices.In the strategic intent model of competitive advantage,this is an example of "loose bricks."

Accepted Answer

In the strategic intent model, "loose bricks" refers to opportunities that arise when industry leaders overlook or ignore certain market segments, allowing competitors to gain a foothold. Intel's focus on high-end PC microprocessors left an opening for competitors to develop and dominate the market for cheaper chipsets for non-PC electronic devices.

Question 12

"Few competitive advantages are long lasting." Justify this statement giving reasons.

Accepted Answer

The answer of "Few competitive advantages are long lasting." Justify...

Question 13

Intel's "loose bricks" approach was its broad focus on complex microprocessors for PCs.

Accepted Answer

Intel's "loose bricks" approach actually refers to its strategy of developing a range of microprocessor components that could be assembled in various configurations to meet different customer needs, rather than focusing solely on complex, integrated designs for PCs.

Question 14

Maytag has been called "the Rolls-Royce of washers and dryers," and it can be said that it has achieved a competitive advantage by means of differentiation.

Accepted Answer

Maytag has historically positioned itself as a premium brand in the home appliance market, emphasizing quality, durability, and reliability in its washers and dryers, which has allowed it to achieve a competitive advantage through differentiation.

Question 15

Intel's focus on designing complex,expensive microprocessors for PCs enabled competitors to develop cheaper chip sets for non-PC electronics devices.In the strategic intent model of competitive advantage,this is an example of:

Accepted Answer

This scenario exemplifies the "loose bricks" strategy, where competitors take advantage of gaps or overlooked opportunities in the market that the leading firm has neglected or deemed unimportant. In this case, Intel's focus on high-end PC microprocessors left an opening for competitors to develop and dominate the market for cheaper chip sets for non-PC electronic devices.

Question 16

In addition to the five forces model of industry competition,Michael Porter has developed a framework of so-called generic business strategies.Explain these generic strategies,describing their aims and application.

Accepted Answer

The answer of In addition to the five forces model...

Question 17

Cost leadership is a sustainable source of competitive advantage only if no barriers exist that prevent competitors from achieving the same low costs.

Accepted Answer

Cost leadership can still be a sustainable source of competitive advantage even with barriers, as these barriers (e.g., economies of scale, proprietary technology, access to raw materials) can actually protect the cost leader from competitors achieving the same low costs.

Question 18

Canon introduced the first full-color copiers and the first copiers with "connectivity"-the ability to print images from such sources as video camcorders and computers.This Canon example shows how an innovative marketing strategy-with fresh approaches to product,pricing,distribution,and selling-leads to overall competitive advantage in the marketplace.This strategy can be classified under:

Accepted Answer

Canon's strategy of introducing innovative features like full-color copying and connectivity changed the rules of the copier market by offering unique capabilities that competitors did not have, thus gaining a competitive advantage.

Question 19

Building layers of advantage,searching for loose bricks,changing the rules of competitive engagement,and collaborating are elements of the competitive advantage framework developed by:

Accepted Answer

Hamel and Prahalad developed the framework for building competitive advantage through strategies like building layers of advantage, searching for loose bricks, changing the rules of competitive engagement, and collaborating.

Question 20

Competitive advantage exists when there is a match between a firm's distinctive competencies and the factors critical for success within its industry.

Accepted Answer

Competitive advantage is achieved when a firm's unique abilities or resources align well with the key success factors of its industry, allowing it to outperform competitors.

Quiz 16: Strategic Elements of Competitive Advantage