Ch 5 Part 2 Flashcards
An organization’s size affects the likelihood it will take competitive actions as well as the …….. and ……. of those actions.
types and timing
Large firms or Small firms ?
Is
typically have a greater amount of slack resources that allows them to initiate a larger total number of competitive actions and strategic actions during a given period.
Large firms
……. exists when the firm’s products meet or exceed customers’ expectations.
Quality
In quality Customers will :
• Will not buy a product or use a service until they believe it can satisfy at least their base-level expectations in terms of quality dimensions that are important to them
Customers Will not buy a product or use a service until they believe it can satisfy at least their base-level expectations in terms of quality dimensions that are important to them ?
True or false?
True
Quality is a base denominator for:
• Competing successfully in the global economy
• Achieving competitive parity, at a minimum
Quality is a necessary but insufficient condition for achieving an advantage ?
True or False?
True
In general, a firm is likely to respond to a competitor’s action when either:
1
•The action damages the firm’s ability to use its core competencies to create or maintain an advantage.
In addition to market commonality, resource similarity, and awareness, motivation, and ability, firms evaluate three other factors to predict how a competitor is likely to respond to competitive actions:
- Type of competitive action
- Actor’s reputation
- Market dependence
In general, the number of tactical responses firms take exceed the number of strategic responses they take, because:
1
2
3
• Strategic responses involve a significant commitment of resources.
• Strategic responses are difficult to implement and reverse.
• The time needed to implement a strategic action and to assess its effectiveness can delay the competitor’s response to that action.
An actor is the firm taking an action or a response.
True or false?
True
Reputation is the positive or negative attribute ascribed by one rival to another based on past competitive behavior ?
T or F
T
…… ……. denotes the extent to which a firm derives its revenues or profits from a particular market.
Market dependence
competitors with low market dependence are likely to respond strongly to attacks threatening their market position ?
T or F
F
competitors with high market dependence are likely to respond strongly to attacks threatening their market position
Competitive dynamics differ in slow-, fast-, and standard- cycle markets
L
The sustainability of the firm’s competitive advantages differs by market type.
L
What is Slow-cycle markets ?
Slow-cycle markets are markets in which competitors lack the ability to imitate the focal firm’s competitive advantages that commonly last for long periods, and where imitation would be costly.
In a slow-cycle market:
1,2,3,4
• Firms may be able to sustain a competitive advantage over longer periods.
• Building a unique and proprietary capability produces a competitive advantage and success.
Examples: Copyrights and patents
• The competitive actions and responses a firm takes are oriented to protecting, maintaining, and extending that advantage.
• Major strategic actions usually carry less risk.
In slow-cycle markets, the competitive advantage generated by a firm gradually erodes over time.
T or F
True
How Gradual Erosion of a Sustained Competitive Advantage
.
Fast-cycle markets mean
Fast-cycle markets are markets in which competitors can imitate the focal firm’s capabilities that contribute to its competitive advantages and where that imitation is often rapid and inexpensive.
In a fast-cycle market:
• Competitive advantages are not sustainable.
In fast-cycle markets, competition is substantial as firms concentrate on developing a series of temporary competitive advantages.
True or false?
True
What firms do in Fast-Cycle Markets with competitive advantage?
3
1- The firm launches a product to achieve a competitive advantage.
2- It then exploits that advantage for as long as possible.
3- It also tries to develop another competitive advantage before competitors can respond to the first one.
What’s happened in Standard-cycle markets?
Standard-cycle markets are markets in which some competitors may be able to imitate the focal firm’s competitive advantages and where that imitation is moderately costly.
Firms imitate competitive actions and responses in standard-cycle markets to:
3
• Seek large market shares
• Gain customer loyalty through brand names
• Control a firm’s operations carefully
The competition for market share is intense in standard-cycle markets because of: ?
3reason
• Large volumes
• The size of mass markets
• The need to develop scale economies
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Who are competitors?
How are competitive rivalry, competitive behavior, and competitive dynamics defined in the chapter?
1- Competitors are firms operating in the same market, offering similar products, and targeting similar customers.
2-
Competitive rivalry is the ongoing set of competitive actions and competitive responses that occur among firms as they maneuver for an advantageous market position.
Competitive behavior is the set of competitive actions and responses a firm takes to build or defend its competitive advantages and to improve its market position.
Competitive dynamics is the total set of competitive actions and responses taken by all firms competing within a market.
1- What is market commonality?
2- What is resource similarity?
3- In what way are these concepts the building blocks for a competitor analysis?
1- market commonality refers to the degree to which two or more competitors compete in the same markets or market segments.
2- Resource similarity is the extent to which the firm’s tangible and intangible resources compare favorably to a competitor’s in terms of type and amount.
3-In the context of competitive rivalry and competitive dynamics, market commonality and competitive rivalry are the building blocks for a competitor analysis. A competitor analysis is a process of identifying and evaluating the strengths and weaknesses of current and potential competitors. It helps a business to understand the competitive landscape in which it operates and to develop strategies to gain a competitive advantage.
How do awareness, motivation, and ability affect the firm’s competitive behavior?
Awareness refers to the extent to which competitors recognize the degree of their mutual interdependence.
• Awareness tends to be greatest when firms have highly similar resources (in terms of types and amounts) to use when competing against each other in multiple markets.
- Motivation concerns the firm’s incentive to take action or to respond to a competitor’s attack.
• A firm may not be motivated to engage in competitive rivalry if it perceives that its market position will neither improve nor suffer if it does not respond.
What factors affect the likelihood a firm will take a competitive action?
the likelihood that a firm will take a competitive action is influenced by a variety of factors, including awareness of the competitive environment, motivation to take action, resources and capabilities, perceived effectiveness of the action, and degree of risk. By understanding these factors, firms can make informed decisions about when and how to take competitive actions to gain a competitive advantage in the market.
What factors affect the likelihood a firm will initiate a competitive response to a competitor’s action(s)?
a firm is likely to respond to a competitor’s action when either:
• The action leads to better use of the competitor’s capabilities to develop a stronger competitive advantage or an improvement in its market position.
• The action damages the firm’s ability to use its core competencies to create or maintain an advantage.
• The firm’s market position becomes harder to defend.
What competitive dynamics can firms expect to experience whencompeting
1- in slow-cycle markets?
2- In fast-cycle markets?
3- In standard- cycle markets?
1-In slow-cycle markets, the competitive advantage generated by a firm gradually erodes over time.
• The firm launches a product it developed through a proprietary advantage.
• It then exploits that advantage for as long as possible while the product’s uniqueness shields it from
competition.
• Eventually, competitors respond to the action with a counterattack.
2- • The firm launches a product to achieve a competitive advantage.
• It then exploits that advantage for as long as possible.
• It also tries to develop another competitive advantage before competitors can respond to the first one.
3- • Competitive advantages are partially sustainable but only if the firm can upgrade the quality of its capabilities continuously.
• The capabilities and core competencies in which firms base their competitive advantages are less specialized.
• Imitation is faster and less costly than in slow-cycle markets.
• Imitation is slower and more expensive than in fast-cycle markets.
• Both incremental and radical innovations are critical to firms’ efforts to achieve strategic competitiveness.
