Chapter 11 Flashcards
Which of the following statements is true about strategic groups?
a) They identify allies in business groups.
b) They exclude rivals who share a similar business model.
c) The firms within each group compete in similar ways.
d) The firms within each group are unlikely to target the same customer segment.
c) The firms within each group compete in similar ways.
A research firm creates a graph to represent how companies compete with each other. The X-axis represents the competitive offerings and Y-axis represents performance. Which of the following is does the graph represent?
a) A structural analysis
b) A workflow analysis
c) A strategic group map
d) A strategy canvas
d) A strategy canvas
An organization studies the strategies of its competitors closely. At the current stage, it studies factors such as geographic location, characteristics of business model, services provided, and time management. At this stage, the organization is identifying the competitor’s __________.
a) objectives
b) goals and achievements
c) organizational structure
d) resources and capabilities
d) resources and capabilities
An organization wants to maximize its payoff given the choices of rivals and remove incentive to defect in the sense that no organization can improve its payoffs by changing its choice. Which of the following concepts will help the organization create such a structure?
a) Strategic group map
b) Nash equilibrium
c) Strategic canvas
d) D’Aveni’s hypercompetition
b) Nash equilibrium
Most companies are in competition with their rivals every day, month, or year with no certain end date. This is an example of __________.
a) the Nash equilibrium
b) an infinitely repeated game
c) a parallel game
d) a simultaneous game
b) an infinitely repeated game
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) bringing strength against weakness
b) learning its strengths and weaknesses
c) neutralizing vulnerability
d) developing strategies that cannot be easily copied
b) learning its strengths and weaknesses
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) Developing strategies that cannot be easily copied
b) Neutralizing vulnerability
c) Knowing the strengths and weaknesses
d) Bringing strength against weakness
b) Neutralizing vulnerability
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) Limiting competitive access to scarce resources
b) Representing the Nash equilibrium
c) Introducing new products frequently
d) Implementing a tit-for-tat strategy
c) Introducing new products frequently
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 complementary strategy
c) A tit-for-tat strategy
d) The Nash equilibrium
a) An entry barrier
In the context of a competitor response profile, the identification of a competitor’s objectives and assumptions mostly helps a company understand ________.
a) what drives the competitor
b) how its employees view the competitor
c) how its own vulnerabilities can be protected and neutralized
d) what the competitor is doing or is capable of doing
a) what drives the competitor
In the context of game theory, implicate is also what is called a dominant strategy because ________.
a) it is the best choice under every alternative choice of a rival
b) it is a set of actions that are played as a reaction to a rival’s choices
c) it is a choice that adds incentive to defect
d) it gives one of the players incentives to change their choices
a) it is the best choice under every alternative choice of a rival
What does market structure mean in the simplest terms?
a) The number of competitive actions that are effective for a certain environment
b) The number of rivals in a particular market
c) The structure of a rival’s resources and capabilities
d) The structure of a rival’s objectives and assumptions
b) The number of rivals in a particular market
Why is the upper bound of oligopolies difficult to define?
a) The number of firms in these markets in some cases can be up to 100 or 150.
b) The firms in oligopolies are locked in tight competition with only a few other firms.
c) The firms must make their moves carefully, knowing that rivals will detect their actions and respond accordingly.
d) The designation depends on whether firms in these markets are monitoring and reacting to specific rival behavior.
d) The designation depends on whether firms in these markets are monitoring and reacting to specific rival behavior.
Any factor that limits the ability of a company to move between strategic groups is called a(n) ______
barrier to mobility
