Exam 2

Question 1

Competitive rivalry

Answer 1

is the ongoing set of competitive actions and competitive responses that occur among firms as they maneuver for an advantageous market position

Question 2

competitive behavior

Answer 2

set of competitive actions and responses a firm takes to build/ defend its competitive advantages and to improve its market position

Question 3

multimarket competition

Answer 3

occurs when firms compete against each other in several product or geographic markets

Question 4

competitive dynamics

Answer 4

all competitive behaviors - set of actions/responses taken by all firms competing within a market

Question 5

market commonality

Answer 5

number of markets in which firms compete against each other and the degree of importance of the individual markets to each

Question 6

resource similarity

Answer 6

the firm’s tangible and intangible resources compared to a competitors in terms of type and amount.

Question 7

competitive action

Answer 7

strategic or tactical action a firm takes to build or defend its competitive advantages or improve its market position

Question 8

competitive response

Answer 8

strategic or tactical action the firm takes to counter the effects of a competitor’s competitive action

Question 9

tactical action or tactical response

Answer 9

market-based move taken to fine-tune a strategy, involves fewer resources and easy to implement and reverse

Question 10

first mover

Answer 10

firm that takes an initial competitive action in order to build or defend its competitive advantage or to improve its market position

Question 11

second mover

Answer 11

firm that responds to the first mover’s competitive action, typically through imitation

Question 12

late mover

Answer 12

firm that responds to a competitive action a significant amount of time after the first mover’s action and the second mover’s response

Question 13

product quality dimension

Answer 13

performance
features
flexibility
durability
conformance
serviceability
aesthetics
perceived quality

Question 14

Service quality dimensions

Answer 14

timeliness
courtesy
consistency
convenience
completeness
accuracy

Question 15

slow-cycle market

Answer 15

firm’s competitive advantages are shielded from imitation for long periods of time and where imitation is costly

Question 16

fast-cycle markets

Answer 16

firm’s capabilities that contribute to competitive advantages aren’t shielded from imitation and where imitation is rapid and inexpensive

Question 17

standard-cycle markets

Answer 17

firms competitive advantages are partially shielded from imitation and imitation is moderately costly

Question 18

organizational slack

Answer 18

buffer provided by actual or obtainable resources that aren’t currently in use and are in excess of the minimum resources needed to produce a given level of organizational output

Question 19

factors affecting likelihood a competitor will attack its competitor

Answer 19

first-mover benefits, organizational size, and quality

Question 20

factors affecting likelihood a competitor will respond

Answer 20

awareness, motivation, ability, type of competitive action, actors reputation, market dependence

Question 21

corporate level strategy

Answer 21

specifies actions a firm takes to gain a competitive advantage by selecting and managing a group of different businesses competing in different product markets

Question 22

market power

Answer 22

exists when a firm is able to sell its products above the existing competitive level or to reduce the costs of its primary and support activities below the competitive level, or both.

Question 23

financial economies

Answer 23

are cost savings realized through improved allocations of financial resources based on investments inside or outside the firm.

Question 24

Synergy

Answer 24

exists when the value created by business units working together exceeds the value that those same units create working independently.

Question 25

acquisition

Answer 25

is a strategy through which one firm buys a controlling, or 100 percent, interest in another firm with the intent of making the acquired firm a subsidiary business within its portfolio.

Question 26

merger

Answer 26

is a strategy through which two firms agree to integrate their operations on a relatively coequal basis.

Question 27

takeover

Answer 27

is a special type of acquisition where the target firm does not solicit the acquiring firm’s bid; thus, takeovers are unfriendly acquisitions.