Question 1

According to Michael Porter's research on the competitive advantage of nations, human, physical, knowledge, capital, and infrastructure resources are all components of a country's:
A)factor conditions.
B)demand conditions.
C)strategy, structure, and rivalry.
D)related and supporting industries.
E)global conditions.

Accepted Answer

According to Michael Porter's research, factor conditions refer to the basic resources a country has at its disposal, including its human, physical, knowledge, capital, and infrastructure resources. These factor conditions are one of the four key determinants of a nation's competitive advantage, along with demand conditions, related and supporting industries, and strategy, structure, and rivalry. Therefore, choice A (factor conditions) is the best answer.

Question 2

The ________ framework was developed by Professor Richard D'Aveni to describe a business environment in which no form of competitive advantage can be sustained for long because of escalating and accelerating competitive forces.
A)five forces model
B)generic strategies
C)strategic intent
D)hypercompetition
E)factor conditions

Accepted Answer

The hypercompetition framework, developed by Professor Richard D'Aveni, describes a business environment in which no form of competitive advantage can be sustained for long because of escalating and accelerating competitive forces.

Question 3

According to strategy expert Richard D'Aveni, the actions taken by Swatch in the global watch industry illustrate hypercompetitive dynamic maneuvering in which arena?
A)cost/quality
B)timing and know-how
C)entry barriers
D)deep pockets
E)Olympics

Accepted Answer

The answer of According to strategy expert Richard D'Aveni, the...

Question 4

Mitsubishi Heavy Industries Ltd.and other Japanese companies manufacture airplanes under license to U.S.firms and also work as subcontractors for aircraft parts and systems.This type of effort is known as:
A)searching for loose bricks.
B)collaborating.
C)building of layers of advantage.
D)changing the rules of engagement.
E)innovating.

Accepted Answer

Collaborating refers to working with other companies to manufacture products, which is exactly what Mitsubishi Heavy Industries Ltd. and other Japanese companies are doing by manufacturing airplanes under license to U.S. firms and serving as subcontractors for aircraft parts and systems.

Question 5

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:
A)building layers of advantage.
B)loose bricks.
C)changing the rules of engagement.
D)collaborating.
E)none of the above

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 6

Sony's PlayStation 3 (PS3)has a powerful chip that provides new levels of realism; PS3 also contains a Blu-Ray DVD player.However, the less complex, less expensive Nintendo Wii has been outselling Sony's game system by a margin of 3-to-1.Based on D'Aveni's model this is reflective of:
A)cost/quality.
B)timing and know how.
C)entry barriers.
D)loose bricks.
E)deep pockets.

Accepted Answer

This is reflective of timing and know-how. The Nintendo Wii was launched before the PS3 and had a unique, innovative approach to gaming with its motion-sensing controllers, which helped it capture a large market share. Nintendo also had a better understanding of the gaming market, while Sony was more focused on the technical aspects of their system.

Question 7

When company management decides that it is unwilling to follow the "conventional wisdom" and instead finds a new way to gain competitive advantage, it might be said to be:
A)searching for loose bricks.
B)changing the rules of engagement.
C)collaborating.
D)building layers of advantage.
E)innovating.

Accepted Answer

The answer of When company management decides that it is...

Question 8

Chance events play a role in shaping the competitive environment.Chance events are occurrences which include all but one of the following:
A)major technological breakthroughs.
B)wars and their aftermath.
C)oil crisis.
D)currency fluctuations.
E)annual business meeting.

Accepted Answer

Major technological breakthroughs, wars and their aftermath, oil crises, and currency fluctuations are all external factors beyond the control of any individual company or industry. Annual business meetings are not considered chance events as they are planned and controlled by the company.

Question 9

In the terminology of the strategic intent framework for competitive advantage, a firm that establishes advantages in a number of different areas has:
A)attribute diversity.
B)marketing breadth.
C)comparative advantage.
D)layers of advantage.
E)a "double diamond."

Accepted Answer

The strategic intent framework suggests that firms should aim to establish layers of advantage in multiple areas, such as technology, marketing, and distribution, to achieve sustainable competitive advantage. This aligns with the concept of a "double diamond" in which a firm leverages multiple advantages to create a unique position in the market. Attribute diversity (A) and marketing breadth (B) are not specific concepts within this framework, and comparative advantage (C) typically refers to a single advantage a firm has over competitors, rather than multiple layers or dimensions of advantage.

Question 10

An approach to competitive advantage that exploits weaknesses in competitors' narrow-focus strategies is called a ________ strategy.
A)loose bricks
B)collaboration
C)layers of advantage
D)supplier power
E)generic

Accepted Answer

A "loose bricks" strategy specifically targets the weaknesses in competitors' focused or narrow strategies, aiming to exploit these gaps for competitive advantage.

Question 11

According to the hypercompetition model of competitive advantage, which of the following allows the firm to create an entirely new product or market?
A)know-how advantage
B)timing advantage
C)outflanking
D)switching costs
E)countermoves

Accepted Answer

The timing advantage allows the firm to be the first in the market with a new product or technology, creating a new market or disrupting an existing one. This is a key strategy in hypercompetition as it enables the firm to stay ahead of its competitors and gain a significant advantage. Know-how advantage refers to the firm's superior knowledge, skills, and processes in a certain area, which may give it an edge over competitors. Outflanking refers to a strategy where the firm initiates attacks on unexpected fronts to surprise competitors, while switching costs and countermoves are defensive strategies used to retain customers or respond to competitors, respectively.

Question 12

The rivalry between Dell, Hewlett-Packard, Gateway, Compaq, and Apple forces all the players to undertake all of the following except:
A)develop new products.
B)improve existing products.
C)lower costs and prices.
D)develop new technologies.
E)change the rules of engagement.

Accepted Answer

The rivalry between these companies would not lead them to change the rules of engagement, as this would require a collaborative effort rather than a competitive one. The other options are all plausible outcomes of the rivalry.

Question 13

In the global watch industry, the success of the Swatch brand resulted in a manufacturing renaissance for Switzerland.In the strategic framework known as hypercompetition, Swatch's success is an example of interactions in which arena?
A)cost/quality
B)timing and know how
C)entry barriers
D)deep pockets
E)sporting events

Accepted Answer

The answer of In the global watch industry, the success...

Question 14

In the 1950s, Sony licensed the technology for the transistor from Bell Labs and proceeded to become the world's leading manufacturer of portable radios.Which strategy was Sony using to gain competitive advantage?
A)collaboration
B)layers of advantage
C)changing the rules
D)loose bricks
E)engagement

Accepted Answer

The answer of In the 1950s, Sony licensed the technology...

Question 15

The "double-diamond" approach to national competitive advantage is a conceptual framework associated with:
A)Michael Porter.
B)Gary Hamel and C.K.Prahalad.
C)Richard D'Aveni.
D)Alan Rugman.
E)Antonio Perez.

Accepted Answer

The "double-diamond" model was developed by Alan Rugman to extend Michael Porter's original diamond model, accounting for international factors in national competitive advantage.

Question 16

Jollibee operates some 1,500 restaurant locations in Philippines, more than McDonald's.Even Jollibee's marketing vice president concedes that McDonald's provided the basic blueprint for their restaurants.However, at Jollibee, sweet and spicy flavors predominate in the burgers and chicken dishes, and their menu offerings are much more varied than competitors.This is an example of which component of competitive innovation?
A)collaboration
B)layers of advantage
C)loose bricks
D)generic
E)supplier power

Accepted Answer

Loose bricks are components of competitive innovation that can be easily changed or replaced, allowing a company to quickly adapt to changing market conditions. In this case, Jollibee's menu offerings are a loose brick, as they can be easily changed to meet the changing tastes of consumers.

Question 17

Which of the following is not one of the four arenas in which dynamic strategic interactions are played out in hypercompetitive industries?
A)cost/quality
B)timing and know-how
C)entry barriers
D)deep pockets
E)buyer and supplier power

Accepted Answer

In the context of dynamic strategic interactions in hypercompetitive industries, the four arenas typically include cost/quality, timing and know-how, entry barriers, and deep pockets. Buyer and supplier power, while important in strategic management and competitive analysis, is not listed among these specific arenas focused on dynamic interactions.

Question 18

Caterpillar's attention was focused elsewhere when Komatsu made its first international entry into the Eastern European Market.Based on the strategic intent framework, this is an example of:
A)changing the rules.
B)collaborating.
C)comparative advantage.
D)layers of advantage.
E)loose bricks.

Accepted Answer

This scenario exemplifies the "loose bricks" strategy, where a company capitalizes on opportunities that the market leader may have overlooked or ignored, such as entering a new geographical market. Komatsu's entry into the Eastern European market while Caterpillar was focused elsewhere is a classic example of exploiting such an opportunity.

Question 19

When managers at Matsushita realized that cost advantages in TV production were often fleeting, they added quality and reliability advantages, thus establishing:
A)loose bricks.
B)a "double diamond."
C)attribute diversity.
D)layers of advantage.
E)buyer power.

Accepted Answer

Matsushita added quality and reliability advantages to their TV production which established "layers of advantage," meaning they built upon their existing competitive advantages instead of relying solely on cost advantages. This allowed them to stay competitive even when their cost advantages were challenged.

Question 20

According to Michael Porter's research on the competitive advantage of nations, Switzerland's large synthetic dye industry and the success of the Swiss pharmaceuticals can be explained in terms of:
A)factor conditions.
B)demand conditions.
C)strategy, structure, and rivalry.
D)related and supporting industries.
E)formation of the European Union.

Accepted Answer

The answer of According to Michael Porter's research on the...

Quiz 16: Strategic Elements of Competitive Advantage

According to Michael Porter's research on the competitive advantage of nations, human, physical, knowledge, capital, and infrastructure resources are all components of a country's:

The ________ framework was developed by Professor Richard D'Aveni to describe a business environment in which no form of competitive advantage can be sustained for long because of escalating and accelerating competitive forces.

According to strategy expert Richard D'Aveni, the actions taken by Swatch in the global watch industry illustrate hypercompetitive dynamic maneuvering in which arena?

Mitsubishi Heavy Industries Ltd.and other Japanese companies manufacture airplanes under license to U.S.firms and also work as subcontractors for aircraft parts and systems.This type of effort is known as:

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:

Sony's PlayStation 3 (PS3) has a powerful chip that provides new levels of realism; PS3 also contains a Blu-Ray DVD player.However, the less complex, less expensive Nintendo Wii has been outselling Sony's game system by a margin of 3-to-1.Based on D'Aveni's model this is reflective of:

When company management decides that it is unwilling to follow the "conventional wisdom" and instead finds a new way to gain competitive advantage, it might be said to be:

Chance events play a role in shaping the competitive environment.Chance events are occurrences which include all but one of the following:

In the terminology of the strategic intent framework for competitive advantage, a firm that establishes advantages in a number of different areas has:

An approach to competitive advantage that exploits weaknesses in competitors' narrow-focus strategies is called a ________ strategy.

According to the hypercompetition model of competitive advantage, which of the following allows the firm to create an entirely new product or market?

The rivalry between Dell, Hewlett-Packard, Gateway, Compaq, and Apple forces all the players to undertake all of the following except:

In the global watch industry, the success of the Swatch brand resulted in a manufacturing renaissance for Switzerland.In the strategic framework known as hypercompetition, Swatch's success is an example of interactions in which arena?

In the 1950s, Sony licensed the technology for the transistor from Bell Labs and proceeded to become the world's leading manufacturer of portable radios.Which strategy was Sony using to gain competitive advantage?

The "double-diamond" approach to national competitive advantage is a conceptual framework associated with:

Which of the following is not one of the four arenas in which dynamic strategic interactions are played out in hypercompetitive industries?

Caterpillar's attention was focused elsewhere when Komatsu made its first international entry into the Eastern European Market.Based on the strategic intent framework, this is an example of:

When managers at Matsushita realized that cost advantages in TV production were often fleeting, they added quality and reliability advantages, thus establishing:

According to Michael Porter's research on the competitive advantage of nations, Switzerland's large synthetic dye industry and the success of the Swiss pharmaceuticals can be explained in terms of: