Topic 2: Competitive Analysis and Strategy in International Markets

Question 1

What is “Competitive Advantage”?

Answer 1

The ability to be more valuable than other firms. An example of this could be having more customers than other firms, or bigger sales margins.

Question 2

What are 4 different types of competitive advantage?

Answer 2

Cost structure, product offerings, distribution network, customer service

Question 3

The disposition and competitive advantage is determined by which 2 basic sources?

Answer 3

Resources and Competences.

Question 4

Define: Resources

Answer 4

Inputs into the business (Financial, Technological, Human, Organizational)

Question 5

True or False: Resources provide the basis for COMPETENCE BUILDING?

Answer 5

True

Question 6

True or False: Resources are supposed to be SUCCESS PRODUCERS not FAILURE PREVENTERS

Answer 6

False: Resources are failure preventers NOT success producers

Question 7

Define: Competences

Answer 7

The combination of the various resources that a company has, the assortment, how the firm INTEGRATES the resources.

Question 8

Define: Competitive Analysis

Answer 8

The process of gathering and analyzing information about your competitors

Question 9

What are some examples of the type of information that a company could gather about a competitor if they were conducting a “Competitive Analysis?

Answer 9

Practices, products, trends, strengths, weaknesses

Question 10

What is the point of “Competitive Analysis?

Answer 10

So a company can find its place in the market, and improve product/marketing strategies.

Question 11

Define: Competitive Strategy

Answer 11

An aim to establish a profitable and sustainable position against the forces that determines industry competition.

Question 12

What are the four elements of “Porter’s Diamond Model”?

Answer 12

Factor conditions, demand conditions, related and supporting industries, and strategy-structure-rivalry

Question 13

What are “Factor Conditions”?

Answer 13

Factors that can be exploited by companies in a given nation. Both good and bad factors are considered to be advantageous.

Question 14

What are some examples of “Factor Conditions”?

Answer 14

a highly skilled workforce, linguistic abilities of workforce, raw materials, workforce shortage.

Question 15

What are “Demand Conditions”?

Answer 15

What the home market demands

Question 16

What is an example of how “demand conditions” has helped shaped a market in a country.

Answer 16

In Japan, the Japanese consumers are extremely demanding of electronics, which helped to spark the success of the Japanese Tech Industry

Question 17

Related and Supporting Industries

Answer 17

x

Question 18

Strategy-Structure-Rivalry

Answer 18

x

Question 19

Why do companies use “Porter’s Diamond”?

Answer 19

So they can analyze which competitive factors may reside in their company’s home country, in order to see which factors should be exploited. They also use it for internationalization in order to see which countries are most likely to sustain growth and development.

Question 20

What are Porter’s 5 forces?

Answer 20

Competitive Rivalry, Threat of New Entrants, Threat of Substitute Products, Bargaining Power of Buyers, and Bargaining Power of suppliers

Question 21

What does “Competitive Rivalry” determine?

Answer 21

The degree of head-to-head rivalry in a competition in an industry.

Question 22

When do “Entry Barriers” exist?

Answer 22

Whenever it is difficult or not economically feasible for an outsider to copy/imitate the existing players competitive capabilities.

Question 23

What are “switching costs”

Answer 23

costs found by buyers in switching to a rival’s product or service

Question 24

What are the determinants of Buyer-Power?

Answer 24

The size and concentration of buyers, and how well informed they are about other vendors/suppliers

Question 25

Bargaining Power of Suppliers

Answer 25

x

Question 26

Competitive Triangle

Answer 26

x

Question 27

What is “Competitive Benchmarking”?

Answer 27

The process or technical management with companies or organizations that evaluate the performance of their processes/systems and management procedures with the best practices found in other organizations.

Question 28

Internal Benchmarking

Answer 28

x

Question 29

Competitive Benchmarking

Answer 29

x

Question 30

Generic Benchmarking

Answer 30

x

Question 31

Strategic Process

Answer 31

x

Question 32

What are Porter’s 3 generic strategies?

Answer 32

Overall cost leadership, differentiation, Focus

Question 33

What is “Cost Leadership”?

Answer 33

When a low cost procuer sells a standardized product on a broad range and tries to exploit all resources of cost advantages in order to have the lowest cost.

Question 34

What is “Differentiation”?

Answer 34

When a firm tries to “set itself apart”, and customers are willing to pay a higher price for a more “prestigious” product.

Question 35

What is “Focus”?

Answer 35

Adopting a narrow competitive scope such as a “cost focus” or a “differentiation focus”.