Question 1

A restaurant chain serves common dishes that are also available in other restaurants.As it does not offer any unique dishes, it introduces other options to customize the products such as the choice of cheese, bread, and spices.It also promises a short waiting time for take-away and free home deliveries.In this case, the restaurant chain is _____.
A) learning its strengths and weaknesses
B) bringing strength against weakness
C) neutralizing vulnerability
D) developing strategies that cannot be easily copied

Accepted Answer

The restaurant chain is neutralizing vulnerability by introducing options to customize the products and providing quick take-away and home delivery to differentiate itself from other restaurants serving the same common dishes.

Question 2

Zeal Inc., an electronic goods manufacturer, launches an air conditioner that contributes to the downfall of Ochre Corp., a company struggling to stay in the market amidst bankruptcy.Which of the following concepts is exemplified in this scenario?
A) Knowing the strengths and weaknesses
B) Bringing strength against weakness
C) Neutralizing vulnerability
D) Developing strategies that cannot be easily copied

Accepted Answer

The scenario exemplifies the concept of bringing strength against weakness, as Zeal Inc.'s launch of a competitive air conditioner has contributed to the downfall of Ochre Corp., which was already struggling to stay in the market amidst bankruptcy.

Question 3

An insurance company has procured all the capacity available in its market for $100 million.Thus, the company has placed a lock on the resources that other firms may require to develop their products.Which of the following is being exemplified in this case?
A) A tit-for-tat strategy
B) A limited competitive access to scarce resources
C) A low-end disruptive innovation
D) The Nash equilibrium

Accepted Answer

The situation exemplifies a limited competitive access to scarce resources, where the insurance company has procured all the capacity available in the market and restricted other firms from accessing those resources. This can lead to market inefficiencies and reduced competition. The other options do not accurately describe the situation.

Question 4

A manufacturing firm maintains its price unless it observes its rival choosing to lower price.Any time the rival lowers price, the firm responds by lowering its own price.This is an example of a _____.
A) structural analysis
B) tit-for-tat strategy
C) strategic canvas
D) complementary game

Accepted Answer

This is an example of a tit-for-tat strategy, where the firm is responding in kind to the actions of its rival. The firm is maintaining a certain pricing structure but is willing to adjust if its rival changes its pricing strategy.

Question 5

Peach Line Inc., manufacturers of furniture, identifies that its choice of suppliers is its weakness and makes this irrelevant by standardizing the production process irrespective of the source of raw materials.This way, its choice of suppliers does not become the target of competitors.Which of the following is exemplified in this case?
A) Knowing the strengths and weaknesses
B) Bringing strength against weakness
C) Neutralizing vulnerability
D) Developing strategies that cannot be easily copied

Accepted Answer

The case exemplifies neutralizing vulnerability as Peach Line Inc. identifies its weakness in the choice of suppliers and makes it irrelevant by standardizing the production process regardless of the raw materials' source, neutralizing the vulnerability.

Question 6

Walden Inc., a well-established finance company, hires the most valuable scientists and experts.Hence, start-ups and other small businesses find it difficult to compete with Walden.Which of the following is exemplified in this case?
A) A tit-for-tat strategy
B) A limited competitive access to scarce resources
C) A parallel game strategy
D) The Nash equilibrium

Accepted Answer

This scenario exemplifies a limited competitive access to scarce resources, as Walden Inc. has hired the most valuable scientists and experts, making it difficult for start-ups and small businesses to compete with them. The scarce resource in this case is the pool of highly skilled and knowledgeable professionals, which puts Walden at an advantage.

Question 7

Noah, a researcher, identifies various resources and capabilities of an organization that are subjected to rapid obsolescence, easy imitation, and high cost not recouped by value.In this case, Noah is:
A) learning the organization's weaknesses.
B) bringing strength against weakness.
C) neutralizing vulnerability.
D) developing strategies that cannot be easily copied.

Accepted Answer

Noah is identifying weaknesses of the organization. This is because resources and capabilities that are subjected to rapid obsolescence, easy imitation, and high cost not recouped by value are not advantageous to the organization and may even cause harm.

Question 8

An organization watches it rivals closely and chooses actions that mimic what its rivals are doing.This is an example of a _____.
A) structural analysis
B) tit-for-tat strategy
C) parallel game
D) simultaneous game

Accepted Answer

Mimicking the actions of its rivals is the definition of the tit-for-tat strategy, which involves a firm responding to another's competitive actions with similar actions of its own, in order to maintain a competitive balance.

Question 9

A researcher wants to study an organization that strives at achieving the best outcome and ensures that the outcome is stable.In this case, the organization has developed the concept of _____.
A) D'Aveni's hypercompetition
B) infinitely repeated game
C) strategic canvas
D) Nash equilibrium

Accepted Answer

Nash equilibrium refers to a situation in a game where each player is making the best decision they can, taking into account the decisions of the others, and no player can benefit by changing their strategy while the others keep theirs unchanged. This concept aligns with the organization's goal of achieving the best and stable outcome, as it implies a balance where the strategy chosen is optimal given the strategies of others.

Question 10

Lieme Inc.and Pola Inc.are oligopolistic rivals in the automobile industry.Lieme has staked out a price position that is slightly higher than that of Pola.Even so, if Pola raises its price, Lieme would too, in order to maintain the differential.Which of the following is being exemplified in this case?
A) Implementing an entry barrier
B) Limiting competitive access to scarce resources
C) Introducing new products frequently
D) Monitoring and mimicking rival behaviour

Accepted Answer

The case exemplifies monitoring and mimicking rival behavior as Lieme is keeping a close watch on Pola's pricing strategy and responding by adjusting its own prices in order to maintain its differential. This behavior is typical of oligopolistic competition where firms are interdependent and need to monitor each other closely in order to make strategic decisions.

Question 11

An insurance firm decides to recognize its resources and capabilities.It observes that a few resources and capabilities deliver unique value, but others are subjected to easy imitation.In this case, the organization is _____.
A) learning its strengths and weaknesses
B) bringing strength against weakness
C) neutralizing vulnerability
D) developing strategies that cannot be easily copied

Accepted Answer

The insurance firm is learning its strengths (resources and capabilities that deliver unique value) and weaknesses (resources and capabilities that are easily imitated). This process involves identifying what sets the firm apart and what areas may be vulnerable to competition, which is crucial for strategic planning and improvement.

Question 12

Plateus Inc., a food manufacturing company, has brand equity worth a billion dollars that has been accomplished through consistent delivery of quality products and long-term advertising.These strategies make entering the industry a formidable task for any other firm.Which of the following is exemplified in this case?
A) An entry barrier
B) A tit-for-tat strategy
C) A complementary strategy
D) The Nash equilibrium

Accepted Answer

The case exemplifies an entry barrier, which refers to any obstacle that restricts the entry of new firms into an industry. In this case, Plateus Inc.'s brand equity worth a billion dollars and its strategies of delivering quality products and long-term advertising make it difficult for a new firm to enter the industry and compete successfully.

Question 13

Most companies are in competition with their rivals each and every day, month, or year with no certain end date.This is an example of _____.
A) a parallel game
B) an infinitely repeated game
C) a simultaneous game
D) the Nash equilibrium

Accepted Answer

An infinitely repeated game refers to a situation where the same game is played repeatedly over an indefinite period. This is the most appropriate description of the competitive nature of most companies as they are in constant competition with their rivals without a predetermined end date.

Question 14

An automobile manufacturing firm has dominated its market by consistently releasing automobile upgrades and enhancements.Which of the following is being exemplified in this case?
A) Implementing a tit-for-tat strategy
B) Limiting competitive access to scarce resources
C) Introducing new products frequently
D) Representing the Nash equilibrium

Accepted Answer

The firm is exemplifying introducing new products frequently to maintain its dominance in the market.

Question 15

A successful chain of restaurants is successful in securing the most advantageous geographic positions.This effectively bars competition.Which of the following is exemplified in this case?
A) A tit-for-tat strategy
B) A limited competitive access to scarce resources
C) A low-end disruptive innovation
D) The Nash equilibrium

Accepted Answer

The scenario described exemplifies a limited competitive access to scarce resources. In this case, the scarce resource is advantageous geographic positions, which the successful chain of restaurants has secured, effectively barring competition from entering those locations. This creates a barrier to entry for potential competitors and limits the competitive access to these scarce resources.

Question 16

Laser Tech., a leading printing firm, launches a new printing technique to meet the changing demands of the market.Blue Corp., its prime competitor, had been rigid in adapting to the changes in the market and is put out of business because of the launch of the new technique by Laser.Which of the following is exemplified in this case?
A) Knowing the strengths and weaknesses
B) Bringing strength against weakness
C) Neutralizing vulnerability
D) Developing strategies that cannot be easily copied

Accepted Answer

The case exemplifies bringing strength against weakness as Laser Tech. was able to adapt to the changing market demands through launching a new printing technique, while its competitor Blue Corp. was rigid and thus put out of business.

Question 17

A well-established manufacturing firm decides to set the market price of a product just low enough so that a new firm cannot pay the cost of entering a market and eventually be profitable.Which of the following is exemplified in this case?
A) A tit-for-tat strategy
B) An entry barrier
C) A strategic canvas
D) The Nash equilibrium

Accepted Answer

This is an example of an entry barrier, where an established firm sets a low market price to discourage new firms from entering the market and being able to make a profit. This creates a barrier for entry, limiting competition and protecting the established firm's market share.

Question 18

Which of the following statements is true about the Nash equilibrium?
A) It is the solution concept used in games that are played forever.
B) It reduces the possibility of compromise.
C) It is the solution concept used to predict the outcome of competitive interaction.
D) It is a set of moves in a game that simultaneously minimize each firm's payoff.

Accepted Answer

The Nash equilibrium is the solution concept used to predict the outcome of competitive interaction, where each player's strategy is a best response to the other players' strategies. It does not necessarily eliminate the possibility of compromise or involve moves that minimize payoffs simultaneously. It is applicable to both finite and infinite games.

Question 19

Which of the following statements is true about an infinitely repeated game?
A) In this game, players always believe there is a future.
B) In this game, each player's best choice is to implicate the rivals.
C) It is the solution concept used to predict the outcome of competitive interactions.
D) It removes incentive to defect in the sense that no firm can improve its payoffs.

Accepted Answer

In an infinitely repeated game, players always believe there is a future because the game is repeated over and over again. This means that the consequences of their actions in the current period will affect their future payoffs in the game.

Question 20

A company wants to form the foundation of a competitive strategy.It decides to assess its strengths and weaknesses.In this case, the company should first assess its _____.
A) resources and capabilities
B) organizational structure
C) structural chart
D) competitors' strategies

Accepted Answer

Assessing a company's strengths and weaknesses should always begin with an assessment of its resources and capabilities, which are the foundational building blocks of any competitive strategy. Understanding what a company excels at and where it needs to improve lays the groundwork for developing a successful strategy. Assessing organizational structure and competitors' strategies may come later in the process.

Quiz 11: Competitive Strategy

Zeal Inc., an electronic goods manufacturer, launches an air conditioner that contributes to the downfall of Ochre Corp., a company struggling to stay in the market amidst bankruptcy.Which of the following concepts is exemplified in this scenario?

An insurance company has procured all the capacity available in its market for $100 million.Thus, the company has placed a lock on the resources that other firms may require to develop their products.Which of the following is being exemplified in this case?

A manufacturing firm maintains its price unless it observes its rival choosing to lower price.Any time the rival lowers price, the firm responds by lowering its own price.This is an example of a _____.

Walden Inc., a well-established finance company, hires the most valuable scientists and experts.Hence, start-ups and other small businesses find it difficult to compete with Walden.Which of the following is exemplified in this case?

Noah, a researcher, identifies various resources and capabilities of an organization that are subjected to rapid obsolescence, easy imitation, and high cost not recouped by value.In this case, Noah is:

An organization watches it rivals closely and chooses actions that mimic what its rivals are doing.This is an example of a _____.

A researcher wants to study an organization that strives at achieving the best outcome and ensures that the outcome is stable.In this case, the organization has developed the concept of _____.

An insurance firm decides to recognize its resources and capabilities.It observes that a few resources and capabilities deliver unique value, but others are subjected to easy imitation.In this case, the organization is _____.

Most companies are in competition with their rivals each and every day, month, or year with no certain end date.This is an example of _____.

An automobile manufacturing firm has dominated its market by consistently releasing automobile upgrades and enhancements.Which of the following is being exemplified in this case?

A successful chain of restaurants is successful in securing the most advantageous geographic positions.This effectively bars competition.Which of the following is exemplified in this case?

A well-established manufacturing firm decides to set the market price of a product just low enough so that a new firm cannot pay the cost of entering a market and eventually be profitable.Which of the following is exemplified in this case?

Which of the following statements is true about the Nash equilibrium?

Which of the following statements is true about an infinitely repeated game?

A company wants to form the foundation of a competitive strategy.It decides to assess its strengths and weaknesses.In this case, the company should first assess its _____.