Question 1

Lucy, a researcher, wants to identify the main differences in different healthcare firms competing to deliver value. She studies the relative price, product line breadth, and geographic placement to identify the differences. Which of the following is Lucy likely to rely on to identify how the firms compete?

Accepted Answer

Lucy is likely to rely on a strategic group map to identify how the healthcare firms compete based on their relative price, product line breadth, and geographic placement. The strategic group map is a visual tool that organizes firms into different groups based on their strategic similarities and differences. This will allow Lucy to identify key differences between healthcare firms and their competitive strategies. B, C, and D are not relevant in this scenario.

Question 2

An organization studies the strategies of its competitors closely. At the current stage, it studies factors such as geographic location, characteristics of business model, services provided, and time management. At this stage, the organization is identifying the competitor's __________.

Accepted Answer

By studying factors such as geographic location, characteristics of business model, services provided, and time management, the organization is trying to identify the resources and capabilities of its competitors.

Question 3

An organization wants to maximize its payoff given the choices of rivals and remove incentive to defect in the sense that no organization can improve its payoffs by changing its choice. Which of the following concepts will help the organization create such a structure?

Accepted Answer

Nash equilibrium is a concept in game theory that provides a solution to a game in which each player's payoff is affected by the choices of others. In a Nash equilibrium, no player can improve their payoff by changing their strategy while the other players keep their strategy unchanged. Therefore, the organization can create a structure that maximizes its payoff and removes the incentive to defect by identifying the Nash equilibrium and making the decision accordingly.

Question 4

Fuchsia Inc., a cosmetics manufacturer, decides to change how it competes in the market. With this objective in mind, it decides to target a different market segment with its existing set of products. However, Fuchsia takes a long time to reconfigure its activities and systems to meet these changes. Which of the following is being exemplified in this case?

Accepted Answer

A mobility barrier refers to the difficulty that firms face as they attempt to reconfigure their activities and systems in response to changing market conditions. In this case, Fuchsia Inc. is taking a long time to reconfigure, indicating that it is facing a mobility barrier. The other options are not relevant to the situation described in the case.

Question 5

An airline service provider watches its rivals closely. It studies the potential for reliable, timely, and service-oriented international travel offered by its competitors. In this case, the firm is focusing on the competitors' __________.

Accepted Answer

Resources and capabilities refer to the tangible and intangible assets that a company possesses that enable it to compete in the market. By studying its rivals' potential for reliable, timely, and service-oriented international travel, the airline service provider is focusing on the resources and capabilities that its competitors have that enable them to offer such services. Knowing this information can help the airline service provider to identify its own strengths and weaknesses and to formulate effective strategies to compete in the market.

Question 6

Copper Enterprises manufactures industrial machinery. It decides to identify the characteristics of a new firm that offers the same products as Copper. In order to assess how it might respond in the face of rival actions, Copper must develop a(n)__________.

Accepted Answer

In order to assess how Copper may respond to rival actions, it needs to develop a competitor response profile, which would identify the characteristics of a new firm offering similar products. This profile would provide Copper with insight into how its competitors might act and how Copper can respond to those actions.

Question 7

Ryan, a researcher, wants to indicate whether companies in one group appeal to the primary markets of another group. Which of the following is likely to help Ryan in his research?

Accepted Answer

Strategic group maps help identify similarities and differences between companies within an industry based on factors such as target market, pricing, and product offerings. This can help Ryan determine whether companies in one strategic group are appealing to the primary markets of another group. Mobility barriers, quality analyses, and product measurements do not necessarily provide this type of comparative analysis between companies.

Question 8

A research firm creates a graph to represent how companies compete with each other. The X-axis represents the competitive offerings and Y-axis represents performance. Which of the following is does the graph represent?

Accepted Answer

A strategy canvas is a tool used to visually depict a company's relative performance across key competitive factors, with the X-axis representing the factors and the Y-axis representing the level of performance.

Question 9

Alex, the CEO of a manufacturing company, is asked by the board if he will consider switching strategic groups. However, Alex thinks it might not be advisable. Which of the following statements strengthens Alex's belief?

Accepted Answer

The fact that his company has rigid systems in place for many years indicates that it may be difficult to adjust to a new strategic group, making it less advisable to switch. Options A and B are irrelevant, and option C does not provide enough information to strengthen or weaken Alex's belief.

Question 10

A simple game has two players; each player has two choices. Assume that the players make their moves at the same time and they only play the game once. Which of the following is exemplified in this case?

Accepted Answer

In this case, both players make their moves at the same time, so it is a simultaneous move game. The other options (linear change game, infinitely repeated game, and consecutive shift game) do not apply to this scenario.

Question 11

Marcel, the owner and president of a three-star hotel, believes that only competitors within the same strategic group need to be analyzed. Nina, the chief of client services, believes that other groups must also be considered in order to stay ahead of competition. Which of the following situations strengthens Nina's argument?

Accepted Answer

If a new café is attracting business people, it is likely to impact Marcel's hotel's business as well. This indicates that other strategic groups also need to be considered to stay ahead of competition. The other options do not necessarily relate to competition from other strategic groups.

Question 12

The word "theory" in game theory refers to __________.

Accepted Answer

The word "theory" in game theory refers to a set of predictions about the strategic interaction among competitors.

Question 13

A research institute plans to build a competitor response profile for a study. Which of the following is the first step to build such a profile?

Accepted Answer

Identifying the assumptions is the first step in building a competitor response profile. This involves understanding the basic assumptions about the market and competitors' behaviors, which is crucial for analyzing their potential actions and strategies.

Question 14

An organization wants to compete at an international level. It sets the company objectives and the assumptions to reinforce the objectives. Which of the following is being exemplified in this case?

Accepted Answer

The answer of An organization wants to compete at an...

Question 15

An organization has few rivals in the industry. These rivals are considering such moves as price changes, capacity adjustments, or new product features. Which of the following will help the organization predict the strategic actions most likely to be taken by its rivals?

Accepted Answer

Game theory is the best choice for predicting strategic actions taken by rivals because it involves analyzing the decision-making process of competitors and predicting their behavior in response to certain situations or actions taken by the organization. This analysis can then be used to inform the organization's own strategy and decision-making. Structural analysis and the study of productivity may provide useful insights but are less directly relevant to predicting competitors' behavior. Strategic canvas is a tool for analyzing an organization's current strategy and competitive landscape, but is not specifically designed for predicting rival actions.

Question 16

Nash equilibrium is represented by a set of moves in a game that ________.

Accepted Answer

Nash equilibrium is a concept in game theory where each player makes the best decision for themselves based on the decisions of the other players. In this case, the Nash equilibrium represents the set of moves in the game that maximizes each firm's payoff given the choices of rivals, which is option D. Option A may be true for some scenarios, but it doesn't necessarily apply to all cases. Option B is incorrect because Nash equilibrium is supposed to sustain cooperation, not defection. Option C doesn't make sense in the context of Nash equilibrium because it is not based on input or the number of rivals.

Question 17

Zara, a research analyst, is studying the business decisions of some restaurant owners. During the data analysis stage, she employs a strategic canvas. Which of the following is likely to be her primary reason to employ this tool?

Accepted Answer

The strategic canvas is a tool used to understand how different businesses within an industry compete with each other. Therefore, Zara is likely to employ this tool to study the differences in the ways restaurants compete with each other. Options A, C, and D are not related to the primary purpose of the strategic canvas tool.

Question 18

Which of the following statements is true about strategic groups?

Accepted Answer

Strategic groups are composed of firms that compete in similar ways. They are differentiated from other groups by their strategic approach rather than by specific product or service characteristics. The firms within each group are likely to target the same customer segment and will compete with each other. Furthermore, strategic groups may contain both allies and rivals who share a similar business model.

Question 19

Gia Inc., a healthcare company, aims to create a competitor response profile. It has identified its objectives and assumptions. The next step is to __________.

Accepted Answer

In order to create a competitor response profile, it is important to identify the competitors' resources and capabilities. This will help the company understand the strengths and weaknesses of their competitors and develop strategies to compete effectively. Studying the price range of its own product lines, creating a structural chart, and focusing on productivity may be important steps in developing overall business strategies, but they are not specifically related to creating a competitor response profile.

Question 20

A set of companies that compete in similar ways with similar business models pursuing similar sets of customers is called a __________.

Accepted Answer

A set of companies that compete in similar ways with similar business models pursuing similar sets of customers is called a strategic group. Joint ventures and strategic alliances involve multiple companies working together, while a supplier group consists of companies that supply a particular product to a larger industry.

Quiz 11: Competitive Strategy