Question 1

Toyota's hybrid power train (e.g., the Prius) has been dominant for a number of years but rivals such as Porche, Chrysler, Hyundai and GM have all developed competing hybrid systems. The developments aimed at improving fuel efficiency illustrate competitive rivalry or "actions and responses" by firms in the global automobile industry (Chapter 5 Strategic Focus).

Accepted Answer

The statement correctly describes the competitive rivalry in the global automobile industry regarding the development of hybrid systems.

Question 2

Research suggests that a firm with greater multimarket contact is less likely to initiate an attack, but more likely to respond aggressively when attacked.

Accepted Answer

Research has found that firms with greater multimarket contact tend to have more mutual interdependence with their rivals, making them less likely to initiate an attack. However, when these firms are attacked, they may respond more aggressively in order to assert their dominance in the shared markets.

Question 3

Coca Cola and PepsiCo compete across a number of products (e.g., soft drinks, bottled water) and geographic markets (U.S. and foreign markets) indicating that both companies have market commonality.

Accepted Answer

The statement correctly states that Coca Cola and PepsiCo have market commonality as they compete in the same products and geographic markets.

Question 4

Canon's desktop copier was a disruptive innovation for the then larger photocopier industry dominated by Xerox (Chapter 5 Opening Case).

Accepted Answer

The opening case in Chapter 5 discusses how Canon's desktop copier disrupted the photocopier industry previously dominated by Xerox.

Question 5

Competitive dynamics refers to the total set of actions and responses taken by all firms competing within a market.

Accepted Answer

Competitive dynamics refers to the interactions and behaviors among competing firms in a market, including strategic actions, reactions, and responses.

Question 6

Competitive rivalry is the set of competitive actions and responses that occur among firms as they maneuver for an advantageous market position.

Accepted Answer

Competitive rivalry refers to the actions and responses that firms engage in as they try to gain an advantage over each other in the market. This can include pricing tactics, advertising campaigns, product innovation, and other strategies aimed at gaining market share or increasing profits.

Question 7

Market commonality is concerned with the number of markets with which the firm and a competitor are jointly involved and the degree of importance of the individual markets to each.

Accepted Answer

Market commonality is indeed concerned with the number of markets in which a firm and its competitors are jointly involved and the degree of importance of each market to each of them.

Question 8

Bayou Belle Water markets water drawn only from a single artesian well in Southern Louisiana. It has a loyal following in its region. Since Bayou Belle markets the water, just as Coca-Cola, Nestle, and PepsiCo do, Bayou Belle has high resource similarity with these international firms.

Accepted Answer

Bayou Belle Water may be in the same industry (beverage manufacturing) as Coca-Cola, Nestle, and PepsiCo, but they do not have high resource similarity as Bayou Belle draws water from a single artesian well while the other companies draw water from a variety of sources, have larger production facilities, and have more diversified product lines.

Question 9

Intensified rivalry within an industry results in decreased average profitability for the firms within it.

Accepted Answer

When there is intensified rivalry within an industry, firms compete aggressively on price, quality, product differentiation, and other factors, which leads to decreased pricing power and profit margins for all firms in the industry.

Question 10

A strategy's success is determined not only by the 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.

Accepted Answer

This statement is true as a strategy's success depends on both the firm's own actions and its ability to anticipate and respond to competitors' actions. Ignoring competitors' responses can lead to failure of the strategy.

Question 11

Two firms that have similar resources, but do not share markets would not be direct and mutually acknowledged competitors.

Accepted Answer

Direct and mutually acknowledged competitors refer to firms that operate in the same market and compete for the same customers. Since the two firms in the given scenario do not share markets, they would not be considered direct and mutually acknowledged competitors even if they have similar resources.

Question 12

Canon's desktop copiers couldn't collate, enlarge, or do grayscale replication and as such failed as a disruptive innovation (Chapter 5 Opening Case).

Accepted Answer

This statement is false. Canon's desktop copiers were actually a disruptive innovation because they were smaller and cheaper than traditional copiers, making them accessible to small businesses and individuals. They did have some limitations such as not being able to collate or enlarge, but they still had innovative features such as automatic paper feed and automatic shut-off.

Question 13

Extensive market commonality guarantees intense competition in an industry.

Accepted Answer

The answer of Extensive market commonality guarantees intense competition in...

Question 14

The global automobile producing industry has high market commonality and high resource similarity, and are aware, motivated, and have the ability to compete for market share in each segment and country they have entered (Chapter 5 Strategic Focus).

Accepted Answer

The statement correctly identifies the competitive characteristics of the global automobile producing industry as high market commonality and high resource similarity, with firms being aware, motivated, and able to compete for market share in each segment and country they operate in.

Question 15

Because of the demanding technology development required, disruptive innovations such as the iPhone are usually confined to a single industry where it can focus on competing against a few rivals (Chapter 5 Opening Case).

Accepted Answer

The answer of Because of the demanding technology development required,...

Question 16

Competitive rivalry is the contest to be the first mover in an international market.

Accepted Answer

Competitive rivalry refers to the competition and struggle among existing firms in the same industry to gain market share and increase profits, not necessarily to be the first mover in an international market.

Question 17

Firms operating in the same market, offering similar products and targeting similar customers are competitors.

Accepted Answer

This is because firms offering similar products and targeting the same customers are vying for the same market share, and therefore compete with each other to attract and retain customers.

Question 18

"Competitive dynamics" indicates that firms and their strategic actions are independent.

Accepted Answer

Competitive dynamics suggest that firms and their strategic actions are interdependent, meaning they are influenced by and respond to the actions of their competitors.

Question 19

Firms with high market commonality and highly similar resources are direct and mutually acknowledged competitors.

Accepted Answer

Firms with high market commonality and highly similar resources are considered direct competitors because they are likely to target the same customer segments and compete for the same resources. This is known as competitive rivalry.

Question 20

According to the Chapter 5 Strategic Focus, the global automobile producing industry has high market commonality but low resource similarity.

Accepted Answer

The answer of According to the Chapter 5 Strategic Focus,...

Quiz 5: Competitive Rivalry and Dynamics