Deck 8: Dynamic competitive strategy

Question 1

The three additional principles of game theory include:

A) if the organisation has a dominant strategy, it should use it
B) managers must act positively for enhanced cooperation
C) seeking solutions in stability
D) all of the above

Answer 1

A

Question 2

Within a strategic game,the choice of how to define 'scope' can have the effect that:

A) areas where organisations compete directly can be used to subsidise areas where they do not compete directly
B) games are linked
C) games are independent
D) games are mutually exclusive

Answer 2

B

Question 3

In D'Aveni's model of stronghold competition,entry barriers can be built by:

A) customer restraint and local rules
B) customer loyalty and familiarity
C) customer protection and local rules
D) customer power and increased advertising

Answer 3

B

Question 4

D'Aveni's model of timing-know-how competition implies:

A) a firm becoming a first mover attempts to create barriers to entry
B) a fresh price war results from a firm becoming a first mover
C) a first mover responds to barriers to entry by leapfrogging over them
D) new entrant matches to first mover through amalgamation

Question 5

D'Aveni's model of deep pockets competition implies that:

A) deep pockets are matched with increased advertising
B) deep pockets of resistance to change develop rapidly
C) deep pockets of industry absorption develop slowly
D) deep pockets lead to larger organisations initiating price wars

Question 6

A key issue in the 'value net' concept of 'value adding' is:

A) how to maximise value to counterparties without threatening retaliatory action by competitors
B) how to enhance value to suppliers without threatening retaliatory action by competitors
C) how to add value to customers without threatening retaliatory action by competitors
D) how to augment value to stakeholders without threatening retaliatory action by competitors

Question 7

Innovative organisations do not accept the 'rules of the game',but seek to change them for their own benefits. In particular,one of the major 'rules' is:

A) the determination of industry standards
B) the determination of market competition
C) the determination of organisational culture
D) the determination of national economic goals

Question 8

Which of the following industries would you consider is experiencing a declining stage of industry evolution?

A) food manufacturing
B) fixed line telecommunications
C) Internet search
D) nanotechnology

Question 9

One of the key principles of game theory is:

A) knowledge of major competitor organisations
B) differentiation between one-period games and repeated interaction games
C) reasoning backwards to the expected actions of competitors to any move
D) all of the above

Question 10

D'Aveni identified four 'competitive areas':

A) cost advantage, deep holds, strong pockets, timing-know-how
B) side pockets, strangleholds, knowledge-timing, total quality management
C) timing-know-how, cost-quality, deep pockets, strongholds
D) strongholds, cost-benefit, timing-anyhow, long pockets

Question 11

Hubbard,Rice and Galvin describe the prisoner's dilemma as a:

A) one-player, single payout objective, two-shot, simultaneous action game
B) sequential action, two-player, multiple payoffs, shotgun game
C) single playoff, multiple objectives, subjective action
D) one-shot, two-player, sequential action, single payoff objective game

Question 12

Within a strategic game,players indicate their perceptions of the competitive situation by:

A) a series of bluffs
B) signalling
C) a competitive fog
D) surrendering

Question 13

Major oil producers' attempts to expand their oil production and renewable energy sources are an example of their:

A) simultaneous and sequential strategic moves
B) simultaneous strategic moves
C) sequential strategic moves
D) none of the above

Question 14

Nalebuff and Brandenburger developed the PARTS model for analysing competitive situations using game theory concepts.PARTS stands for:

A) playing fields, added interest, risk, tactics, search
B) parameters, added players, random chance, takeovers, stakeholders
C) players, added value, rules, tactics, scope
D) participation, amplification, rules, tactics, satisfaction

Question 15

In D'Aveni's model of cost-quality competition implies:

A) an initial price war leads directly to segment producers
B) new levels of value result directly from differentiation on quality
C) segment competition leads directly to a fresh price war
D) emergence of full-line producers covering all segments

Question 16

The key parameters defining any specific game in game theory include:

A) whether or not actions by competitors are simultaneous or differential
B) whether or not complete information about the issue is available
C) whether or not it is a one-off or multiperiod game
D) whether or not the expected outcomes are quantifiable 'payoffs'

Question 17

Nalebuff and Brandenburger constructed a 'value net' comprising:

A) the competition, complementors, customers, creators, coordinators
B) collaborators, the opposition, flatterers, hostiles, supplementers
C) suppliers, the shareholders, employees, competitors, customers
D) complementors, customers, suppliers, competitors, the organisation

Question 18

Hubbard,Rice and Galvin suggest that in respect of green sustainability issues,many organisations adopt:

A) an 'imitating others' approach
B) a proactive approach
C) a short-cut approach
D) a 'wait and see' approach

Question 19

D'Aveni postulated that 'hypercompetition' arises when:

A) disequilibrium and rapid change by players creates constant dynamic movement
B) rapid disequilibrium movement by key players creates dynamic changes
C) rapidly changing environment creates dynamic disequilibrium and movement by players
D) dynamic movement by players creates constant disequilibrium and rapid change

Question 20

One of D'Aveni's suggested ways for successful competition under hypercompetitive scenarios includes:

A) providing higher shareholder value
B) pausing for effect before implementation
C) surprising competitors with strategic moves
D) consolidation of rules

Question 21

Signalling is a major way of indicating organisational perceptions of the competitive situation.

Question 22

According to D'Aveni,solutions to hypercompetition include consolidation and understanding of industry rules.

Question 23

Nalebuff and Brandenburger have argued that organisations should be hostile to all competitors.

Question 24

Tactics are best designed to have their own effect rather than affecting the perceptions.

Question 25

D'Aveni has argued that the situation of hypercompetition is best addressed through short-term and temporary advantage.

Question 26

One of the principles of game theory is that all managers must think similarly if cooperation is to be promoted.

Question 27

The PARTS model introduced the idea that value chain members can both cooperate and compete at the same time.

Question 28

Explain the competitive options of small organisations to meet the challenges of 'deep pocket competitors'.

Question 29

Define and explain D'Aveni's 'hypercompetition' concept.What are the major competitive arenas for it to occur?

Question 30

Consider the relevance of game theory in understanding business strategy.

Question 31

One of the main principles of game theory is to consider the unexpected reactions of the competitors.

Question 32

Game theory is a complete and integrated theory of competitive strategy.

Question 33

Innovative organisations accept,understand and preserve the rules of the game.