CH04 Flashcards
The key implication of “hypercompetition” in business is that:[See p.85]
a. Competitive advantage is temporary
b. Technological change will continue to accelerate
c. “If it ain’t broke, don’t fix it” is an obsolete piece of advice
d. The concept of Schumpeterian competition needs to be updated to realities of the 21st century
a
Video game consoles and video games are complementary products: the availability of one increases the value of the other. In the past the suppliers of consoles were able to appropriate most of the profits generated by video game systems because:[See pp.86-87]
a. Video game consoles cost more to develop than video games
b. The consoles were more powerful determinant of the consumer experience than the games
c. The console suppliers controlled technology and distribution giving them more bargaining power than the suppliers of video games
d. The console makers—Nintendo, Sony and Microsoft—were bigger companies than the suppliers of video games
c
The contribution of game theory to the field of strategic management is in:[See p.91]
a. Generating more accurate predictions about competitive behavior
b. Extending the theory of competition to embrace cooperation
c. Extending the analysis of competitive behavior to the realms of politics, diplomacy, and social behavior
d. Permitting a more rigorous framing of competitive situations and strategic decisions
d
If administering deterrence is costly or unpleasant for the threatening party, then:[See p.92]
a. It may lack credibility
b. It will always lack effectiveness
c. It will need to be supported by appropriate signaling
d. It reinforces the power of the threatening party
a
The relationship between commitment and strategic options may be best described as: [See p.92]
a. Commitments increase the value of real options
b. By committing to a set of options, a firm can reconcile two sources of value: value from deterring competitors and value from real options
c. Making commitments inevitably involve giving up options
d. The two reside in different realms of analysis: commitments can be analyzed using game theory; real options can be analyzed using financial theory
c
Signaling refers to:[See p.94]
a. Communications that announce your strategic intentions or plans to rivals
b. Any deliberate action that is intended to influence other players’ perceptions or behavior
c. Deception through misinformation
d. Internal communications that divert strategic orientations and obtain the buy-in of the organization’s keystakeholders
b
The relationship between competition and cooperation can be described as follows:[See pp.92-93]
a. Industries either compete or cooperate; if they cooperate, they are likely to be in breach of competition law
b. Cooperation and competition may exist in an industry, but not at the same time
c. Both can co-exist simultaneously
d. Both can co-exist at the same time, but not in the same industry segment or strategic group
c
In a market where Firm A and Firm B are leading suppliers, if Firm A initiates a price cut, the likelihood that Firm B responds with an identical price cut will be greater: [See pp.96-99]
a. If Firm B’s goal is to maximize profit
b. If Firm B’s goal is to maximize market share
c. If Firm B is a private rather than a public (listed) company
d. If the market is growing
b
Competitive intelligence, the systematic collection and analysis of information about rival firms, is:[See pp.95-98]
a. A practice which, though legal in most countries, is unethical
b. Likely to distract firms from their efforts to establish positions of competitive advantage based upon their distinctive strengths
c. An important component of a firm’s environmental scanning and strategic analysis
d. A useful activity because it can help firms imitate the strategies of their more successful competitors.
c
The main purpose of competitive intelligence is to:[See pp.95-98]
a. Forecast competitors’ behavior
b. Assess competitors’ resources and capabilities
c. Signal to competitors in order to influence their behavior
d. Gain access to competitors’ trade secrets
a
The distinction between legitimate competitive intelligence and industrial espionage:[See pp.95-98]
a. Is clearly defined by legislation and case law relating to trade secrets
b. Is not always clear
c. Is non-existent – they overlap
d. Is easily resolved by hiring a good lawyer
b
To attempt to predict competitive behaviors, Porter suggests a four-step framework, where analysts must identify:[See pp.95-98]
a. The competitor’s current strategy, its objectives, its assumptions about the industry and itself, and its available resources and capabilities
b. The competitor’s current strategy, its future strategy, its assumptions, and its vulnerabilities
c. The competitor’s assumptions about the industry, its available resources and competencies, its objectives, and its competitive advantage
d. The competitor’s available resources and competencies, its objectives, then its competitive advantage, and finally its performance
a
The main use of industry segmentation analysis is to:[See pp.98-101]
a. Identify the most attractive segments for a firm to locate within
b. Understand better the needs of different customer groups
c. Formulate better marketing strategies
d. Predict the likely evolution of market structure
a
Barriers to mobility are:[See p.99]
a. Barriers that protect a segment from firms established in other segments of the same industry
b. Barriers that protect incumbents from established firms in other industries rather than from new start-up companies
c. Obstacles that a firm faces in changing its strategy
d. Barriers that prevent globalization and developing a firm’s business abroad
a
The difference between barriers to entry and barriers to mobility is:[See p.99]
a. The sources of barriers to mobility are different than the sources of barriers to mobility
b. There is no real difference
c. Barriers to mobility are less effective than barriers to entry
d. Barriers to entry protect the industry as a whole whereas barriers to mobility protect segments within the industry
d
