Question 1

Which of the following ways are employed by defending companies to fend off a competitive attack?

Accepted Answer

Gaining product line exclusivity is a strategic move to limit competitors' access to distribution channels, making it harder for them to reach the market. This can effectively fend off competitive attacks by controlling the availability of competing products.

Question 2

Which of the following is not among the principal offensive strategy options that a company can employ?

Accepted Answer

Blocking the avenues open to challengers is more of a defensive strategy than an offensive one. Offensive strategies typically focus on outmaneuvering competitors through innovation, pricing, exploiting weaknesses, or capturing new or uncontested markets.

Question 3

A blue ocean strategy

Accepted Answer

A blue ocean strategy involves creating new demand in a market that has not yet been explored, offering growth in revenues and profits. This is done by discovering or inventing a new industry or distinct market segment that renders rivals largely irrelevant. A blue ocean strategy is not focused on attacking competitors, but rather on creating a new space in the market where competition is limited.

Question 4

Which of the following signals would not warn challengers that strong retaliation is likely?

Accepted Answer

Announcing strong quarterly earnings potential to financial analysts may signal competitiveness and success in a market but does not necessarily warn challengers of strong retaliation.

Question 5

A hit-and-run or guerrilla warfare type offensive strategy

Accepted Answer

The description given matches the definition of a hit-and-run or guerrilla warfare type offensive strategy, which involves unexpected attacks by smaller competitors to grab market share from larger and potentially complacent rivals.

Question 6

First-mover advantages are unlikely to be present in which one of the following instances?

Accepted Answer

When there is rapid market evolution, first-mover advantages are unlikely to be present because new and more attractive next-version products can always emerge quickly, making the earlier first mover's product less attractive.

Question 7

Which one of the following is not an offensive strategy option?

Accepted Answer

Deliberately attacking those market segments where key rivals make big profits is not an offensive strategy option. This is actually a defensive strategy option as it involves protecting one's own profits and market share from the competition. The other options listed are all offensive strategies aimed at gaining a competitive advantage over rivals.

Question 8

Being first to initiate a strategic move can have a high payoff in all but which one of the following instances?

Accepted Answer

When pioneering leadership is costlier than followership, being first to initiate a strategic move can lead to high costs that may not be worth the potential payoff. In such cases, it may be more beneficial to follow the lead of competitors who have already made such moves and avoid the higher costs associated with being a pioneer.

Question 9

The race among rivals for industry leadership is more likely to be a marathon rather than a sprint when

Accepted Answer

When the market depends on the development of complementary products or services that are currently not available, buyers have high switching costs, and influential rivals are in position to derail the efforts of a first mover, it is likely that the race among rivals for industry leadership will be a marathon rather than a sprint. This is because it takes time to develop complementary products or services, and buyers are hesitant to switch to a new product or service if they have been using a competitor's product/service for a long time. Influential rivals can also use their power to pose significant challenges for a new entrant, making it difficult for them to gain market share quickly.

Question 10

First-mover disadvantages (or late-mover advantages)rarely arise when?

Accepted Answer

First-mover disadvantages are less likely to arise when the market response is strong and the pioneer gains a monopoly position, enabling it to recover its investment. This scenario allows the pioneer to establish a dominant position and capitalize on its early entry.

Question 11

A company's menu of strategic choices to supplement its decision to employ one of the five basic competitive strategies does not include

Accepted Answer

The company's menu of strategic choices includes defensive strategies, vertical integration, offensive strategies, acquisition/merger, and strategic partnerships/alliances. However, a preemptive strike type of green ocean strategy is not part of the menu of strategic choices for a company.

Question 12

Launching a preemptive strike type of offensive strategy entails

Accepted Answer

Launching a preemptive strike type of offensive strategy means moving first to secure an advantageous competitive asset that rivals cannot readily match or duplicate. This strategy is aimed at establishing a competitive advantage that is sustainable and difficult for the rivals to imitate. The tactic is generally used when a company expects that its competitors might enter its market or when it seeks to disrupt its rival's plans.

Question 13

Which of the following is not an example of a company that uses blue ocean market strategy?

Accepted Answer

Walmart's logistics and distribution strategy in the retail industry is an example of a red ocean strategy, where the company competes in an existing market and focuses on outperforming competitors through efficiency and scale, rather than creating a new market space or value innovation, which is characteristic of a blue ocean strategy.

Question 14

Which of the following choices is not an additional strategic choice that a company makes once it has decided to employ a particular generic competitive strategy?

Accepted Answer

Discontinuing disruptive product innovation is not an additional strategic choice a company makes once it has decided to employ a particular generic competitive strategy. The other choices- going on the offensive, merging with/acquiring another company, forming strategic alliances, integrating forward or backward- are all strategic choices a company can make to support its chosen competitive strategy.

Question 15

Which one of the following is an example of an offensive strategy?

Accepted Answer

Pursuing continuous product innovation to draw sales and market share away from less innovative rivals is an offensive strategy as it involves actively trying to take market share from competitors by offering better products or services.

Question 16

The purposes of defensive strategies include

Accepted Answer

Defensive strategies are designed to mitigate the risk of being attacked by competitors and to weaken the impact of any attack that occurs. These strategies also aim to influence potential challengers to target other competitors, thus reducing the direct threat to the company.

Answer: A 
 Defensive strategies can discourage deep price discounting by ambitious rivals seeking to capture additional market share. By maintaining competitive pricing, a company can discourage rivals from attempting to provoke a price war.

Answer: E 
 Defensive strategies can help widen a company's competitive advantage over its rivals. By adopting defensive strategies, a company can protect its market position and maintain its competitive edge, which can help widen the gap between itself and its competitors.

Question 17

Which of the following is not an example of a defensive move to protect a company's market position and restrict a challenger's options for initiating competitive attack?

Accepted Answer

Challenging struggling runner-up firms that are on the verge of going under is actually an aggressive move rather than a defensive one. It involves taking advantage of a competitor's weakness rather than protecting against their attack.

Question 18

Which one of the following is not a good type of rival for an offensive-minded company to target?

Accepted Answer

Targeting other offensive-minded companies with a sizable war chest of cash and marketable securities is not a good type of rival for an offensive-minded company to target. Such companies are likely to have strong capabilities and resources to defend their market position or launch their own offensive moves.

Question 19

Which one of the following is not a good example of a defensive strategy to protect a company's market share and competitive position?

Accepted Answer

Engaging in a preemptive strike strategy can actually escalate the competition and lead to a more aggressive response from rivals. It may not effectively protect the company's market share in the long run. The other choices are defensive strategies that can help protect or improve the company's market position.

Question 20

A blue ocean type of offensive strategy

Accepted Answer

A blue ocean strategy involves creating a new market space that is uncontested and creating new demand. It does not involve attacking existing rivals or stealing customers away from smaller rivals, but rather creating a new market that existing competitors are not part of.

Quiz 6: Strengthening a Companys Competitive Position: Strategic Moves, timing, and Scope of Operations