Question 1

Differentiate between value and cost benefits.Provide examples for each type of benefit.

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Question 2

Differentiate between strategic actions and tactical actions.

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Question 3

What is meant by industry analysis? How does industry analysis help an individual in the strategy process?

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Question 4

Briefly describe the industry life cycle.

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Question 5

What are the two market decisions that entrepreneurs need to make early in the process of going into business?

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Question 6

When looking at the typical start-up strategy of a classic innovator,which of the following statements is not true?

Accepted Answer

This statement is not true because innovation can happen at any stage of the product life cycle, not just during the introduction phase. Classic innovators are known for introducing new and disruptive ideas in their niche market, and may use an elite supra-strategy to differentiate themselves from competitors. The industry they target is typically moderately to highly attractive, but still narrow enough to allow them to establish a foothold and gain momentum before expanding into larger markets.

Question 7

Michael Porter identifies five different threats of competition for any business.Which of the following choices is not one of Michael Porter's five threats?

Accepted Answer

The five threats of competition identified by Michael Porter are Rivals, New Entrants, Buyers, Suppliers, and Substitutes. "Investors" is not one of these threats.

Question 8

Briefly describe Michael Porter's Five-Forces Model of industry competition.Why is it important to pay attention to these five forces of competition?

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Question 9

_____ is a strategic action.

Accepted Answer

Acquiring a competitor is a strategic action as it involves a significant decision and investment that will impact the company's position in the market in the long-term. Increasing marketing efforts, using new distribution channels, and increasing prices can also be strategic actions, but they may not have the same level of impact as acquiring a competitor.

Question 10

Differentiate between incremental innovation and pure innovation.

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Question 11

In the context of entry wedges,_____ occurs because government agencies,government-sponsored commercial contracts,and many big businesses have policies that provide for quotas for buying from small businesses.

Accepted Answer

Favored purchasing refers to the policy of government agencies, government-sponsored commercial contracts, and big businesses to provide quotas for buying from small businesses, which can create entry wedges for those small businesses. Second sourcing refers to the practice of using multiple suppliers for the same product or service, and is not directly related to entry wedges. Market relinquishment and customer contracting are not industry terms and do not relate to the context of entry wedges.

Question 12

Which of the following statements about Michael Porter's Five-Forces Model of Industry Competition is not true?

Accepted Answer

This statement is true, so it is not the correct answer. The Five-Forces Model of Industry Competition includes five sets of sources of competition: (1) new entrants, (2) substitutes and alternatives, (3) bargaining power of suppliers, (4) bargaining power of customers or buyers, and (5) rivalry among existing firms in the industry.

Question 13

Which of the following is a tactical action?

Accepted Answer

New distribution channels are a tactical action that involves identifying and implementing new ways of making products or services available to customers within existing markets. Mergers (B) and entering new markets (D) are strategic actions that involve significant changes to a company's overall direction or focus. New product introductions (C) can be either strategic or tactical depending on their role in the company's overall strategy.

Question 14

Which of the following is true of the entry wedge of second sourcing?

Accepted Answer

The entry wedge of second sourcing refers to the practice of bringing in a new supplier to provide competition to an existing supplier. This creates pressure for suppliers to maintain the best service and prices to avoid losing business. Therefore, option D is the correct answer. Option A is incorrect because the exit wedge occurs when firms leave a market. Option B refers to set-asides for purchases from small businesses, which is not related to the concept of second sourcing. Option C is also unrelated, as the entry wedge of second sourcing does not specifically refer to global suppliers.

Question 15

_____ is the particular way a firm implements customer benefits that keeps the firm ahead of other firms in the market.

Accepted Answer

Competitive advantage refers to the unique aspects of a firm's strategy and operations that give it an edge over its rivals in the market. This can include factors such as cost leadership, differentiation, or superior customer service. By implementing these customer benefits in a unique and effective way, the firm is able to stay ahead of its competitors and maintain its position in the market. Industry analysis, resource distribution, and market relinquishment are all important considerations for a firm, but they are not directly related to the concept of competitive advantage.

Question 16

Which of the following is a strategic action?

Accepted Answer

New product introductions are considered strategic actions because they involve long-term planning and significant resource allocation to develop and launch new products, aiming to achieve a competitive advantage or enter new markets.

Question 17

Name and briefly describe the different types of generic strategies.

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Question 18

What is an entry wedge? Explain any five of the entry wedges.

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Question 19

What are the four key decisions that entrepreneurs need to make to build the strategy for their firms?

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Question 20

Which of the following statements is true regarding the entry wedge of supply shortage?

Accepted Answer

The entry wedge of supply shortage occurs when a new product is in demand, but suppliers cannot ramp up production quickly enough to meet that demand, resulting in a temporary shortage.

Quiz 7: Small Business Strategies: Imitation With a Twist