Question 1

Lobelia's Nursery and Garden Resource Center has long provided high-quality, typical types of seasonal bedding plants to customers in the Mobile, Alabama, metropolitan area.It has traditionally competed with the other plant nurseries within a 50-mile radius of Mobile.Recently, Lobelia has opened a branch in Fairfax, Virginia.Lobelia's research shows that most Fairfax nurseries have only one location.Lobelia can expect the local Fairfax nurseries to:
A) be unmotivated to respond because their market position is not threatened by a new competitor from out of town.
B) respond with fierce attacks because of resource dissimilarity.
C) respond aggressively because of high market dependence.
D) take no competitive response because of the lack of mutual interdependence among the nurseries.

Accepted Answer

Local Fairfax nurseries are likely to respond aggressively due to high market dependence, as they rely heavily on their local customer base and may feel threatened by a new competitor entering their market.

Question 2

Competitors are more likely to respond to strategic or tactical actions when they are taken by:
A) differentiators.
B) larger companies.
C) first movers.
D) market leaders.

Accepted Answer

Competitors are more likely to respond to actions taken by market leaders because these companies have significant influence and their actions can impact the entire market.

Question 3

Without quality, the firm's products:
A) can compete effectively on the basis of low price.
B) lack credibility among customers.
C) must be exported to developing countries, because they are not competitive in the United States or developed countries.
D) are associated with predatory competition.

Accepted Answer

Without quality, a firm's products lack credibility among customers, as quality is a key factor in establishing trust and reliability in a product.

Question 4

On the whole, there are more competitive responses to:
A) strategic actions than to tactical actions.
B) tactical actions than to strategic actions.
C) buyer pressures than to supplier pressures.
D) the demands of the top management team than to industry structural pressures.

Accepted Answer

Tactical actions are usually more visible and easier for competitors to respond to quickly, leading to more competitive responses compared to strategic actions, which are often more complex and long-term.

Question 5

Akamai Technologies is a dominant player in the content delivery network (CDN) market.Akamai is not very diversified (i.e., is dependent on the CDN market).If rival CDN providers such as Limelight Networks and Level 3 Communications lower their basic CDN service prices, which of the following would Akamai likely do?
A) Raise its prices
B) Do nothing since it is the market leader
C) Exit the industry
D) Lower its prices

Accepted Answer

Akamai would likely lower its prices to remain competitive and retain its market share, especially since it is heavily dependent on the CDN market.

Question 6

Which of the following organizations has the highest market dependence?
A) Chain of rapid-service oil change shops
B) Manufacturer of chemicals for the international pharmaceutical industry
C) Regional department store having 26 locations in the Northwest
D) Company that specializes in making replacement tiles for the space shuttle

Accepted Answer

The company that specializes in making replacement tiles for the space shuttle has the highest market dependence because it serves a highly specialized and niche market with very limited customers, making it heavily reliant on that specific market.

Question 7

Late movers are those firms that:
A) respond to a competitive action a significant amount of time after the first mover's action and the second mover's response.
B) respond to a first mover's competitive action often through imitation or a move designed to counter the effects of the action.
C) take an initial competitive action (either strategic or tactical).
D) typically achieve higher-than-average returns because they can imitate the most efficient actor.

Accepted Answer

Late movers are firms that respond to a competitive action a significant amount of time after the first mover's action and the second mover's response.

Question 8

First movers are:
A) entrepreneurs who lead in the establishment of new industries.
B) firms that are first to exit a declining industry.
C) firms that take an initial competitive action.
D) individuals who move frequently as employment opportunities change in a locale.

Accepted Answer

First movers are firms that take an initial competitive action, often by being the first to enter a new market or develop a new product, gaining a competitive advantage.

Question 9

In customer feedback surveys, RTC Corp customers have indicated that they have a similar experience each time they interact with the company.This reflects success in which service quality dimension?
A) Consistency
B) Courtesy
C) Accuracy
D) Performance

Accepted Answer

Consistency in service quality means providing the same level of service every time, which aligns with customers having a similar experience each time they interact with the company.

Question 10

While no firm, or company wants a product to break, that does happen.In customer feedback surveys, ChirOpt customers have indicated that when they have a product that breaks, they are pleased with both the ease and the speed of the repair.This reflects success in which product quality dimension?
A) Performance
B) Consistency
C) Durability
D) Serviceability

Accepted Answer

Serviceability refers to the ease and speed with which a product can be repaired, which aligns with the customer feedback about ChirOpt's products.

Question 11

Quality affects competitive rivalry because a competitor whose products suffer from poor quality likely will __________ until __________.
A) initiate more competitive actions; the firm returns to profitability
B) initiate fewer competitive actions; the quality problems are corrected
C) initiate more competitive actions; the quality problems are corrected
D) advertise more; customers believe the quality has improved

Accepted Answer

A competitor with poor quality products will likely initiate fewer competitive actions until they can correct the quality issues, as poor quality can hinder their ability to compete effectively.

Question 12

Quality is:
A) meeting or exceeding customer expectations in the goods and/or services offered.
B) only a major factor in the production of luxury goods, such as BMW cars.
C) an assured way to gain competitive advantage.
D) a viable trade-off with product cost in gaining a competitive advantage.

Accepted Answer

Quality is defined as meeting or exceeding customer expectations in the goods and/or services offered, making it a key factor in customer satisfaction and business success.

Question 13

In the context of competitive rivalry, what is an actor's reputation?
A) The perceived level of quality customer's associate with the firm's goods or service
B) A positive or negative quality attributed to one's rival based on previous competitive behavior
C) The willingness of capital markets to invest more in a firm based on past performance
D) The degree of loyalty both internal and external stakeholders demonstrate to the firm

Accepted Answer

An actor's reputation in competitive rivalry refers to the positive or negative quality attributed to a rival based on their previous competitive behavior.

Question 14

Bubble-Up, Inc., is a small manufacturer of educational toys for children under age 10.It has co-existed with three other competitors in the educational toy industry for over 20 years, each of them maintaining a stable market share.There is a widespread rumor that Mega-Toy, Inc., the market leader in the broad children's toy market, has decided to target educational toys.Which of the following statements is MOST likely true?
A) The owners of Bubble-Up are unconcerned about Mega-Toy's entry to the market because of the resource dissimilarity between the firms.
B) Bubble-Up's greater organizational slack will allow it to aggressively attack Mega-Toy.
C) Bubble-Up's smaller size may make it more flexible in introducing innovations than Mega-Toy.
D) Competitive rivalry will not increase for Bubble-Up because Mega-Toy is not dependent on the educational toy market.

Accepted Answer

Bubble-Up's smaller size may allow it to be more agile and innovative in response to Mega-Toy's entry into the educational toy market, potentially giving it a competitive advantage.

Question 15

A firm is likely to respond to an attack by a competitor in all of the following situations EXCEPT when the attack:
A) is by a competitor known for risky or complex competitive behavior.
B) makes the firm's market position less defensible.
C) damages the firm's ability to use its capabilities.
D) improves the competitor's market position.

Accepted Answer

A firm is less likely to respond to an attack by a competitor known for risky or complex competitive behavior because such behavior may be unpredictable and not directly threatening to the firm's market position or capabilities.

Question 16

The chief disadvantage of being a first mover is the:
A) high degree of risk.
B) high level of competition in the new marketplace.
C) inability to earn above-average returns unless the production process is very efficient.
D) difficulty of obtaining new customers.

Accepted Answer

First movers face a high degree of risk because they are entering uncharted territory, which involves uncertainties and potential challenges that later entrants can learn from and avoid.

Question 17

A second mover:
A) is typically ineffective in its response to a first mover.
B) attempts to provide a product with greater customer value than the first mover's product.
C) usually incurs higher expenses than the first mover since it must engage in reverse engineering.
D) typically has a higher survival rate than first movers which typically take greater risks.

Accepted Answer

A second mover attempts to improve upon the first mover's product by offering greater customer value, often learning from the first mover's experiences and mistakes.

Question 18

A firm that is LEAST likely to launch competitive actions is one that has:
A) organizational slack.
B) advanced research and development.
C) recently improved the quality of its products.
D) large size.

Accepted Answer

Large firms often have more bureaucratic processes and may be less agile, making them less likely to launch competitive actions quickly compared to smaller, more nimble firms.

Question 19

Which of the following statements is false?
A) First movers tend to take higher risks than second and later movers.
B) First movers tend to have significantly higher revenues than second movers.
C) First movers have lower survival rates than second and late movers.
D) First movers tend to have more organizational slack than later movers.

Accepted Answer

First movers have higher survival rates than second and late movers.

Question 20

All competitive advantages do not accrue to large-sized firms.A major advantage of smaller firms is that they:
A) are more likely to have organizational slack.
B) can launch competitive actions more quickly.
C) have more loyal and diverse workforces.
D) can wait for larger firms to make mistakes in introducing innovative products.

Accepted Answer

Smaller firms can often respond more quickly to changes in the market and launch competitive actions faster due to their less bureaucratic structures and more flexible decision-making processes.

Quiz 5: Competitive Rivalry and Competitive Dynamics

Competitors are more likely to respond to strategic or tactical actions when they are taken by:

Without quality, the firm's products:

On the whole, there are more competitive responses to:

Which of the following organizations has the highest market dependence?

Late movers are those firms that:

First movers are:

In customer feedback surveys, RTC Corp customers have indicated that they have a similar experience each time they interact with the company.This reflects success in which service quality dimension?

While no firm, or company wants a product to break, that does happen.In customer feedback surveys, ChirOpt customers have indicated that when they have a product that breaks, they are pleased with both the ease and the speed of the repair.This reflects success in which product quality dimension?

Quality affects competitive rivalry because a competitor whose products suffer from poor quality likely will until .

Quality is:

In the context of competitive rivalry, what is an actor's reputation?

A firm is likely to respond to an attack by a competitor in all of the following situations EXCEPT when the attack:

The chief disadvantage of being a first mover is the:

A second mover:

A firm that is LEAST likely to launch competitive actions is one that has:

Which of the following statements is false?

All competitive advantages do not accrue to large-sized firms.A major advantage of smaller firms is that they: