Question 1

Intensified rivalry within an industry results in:
A) Increased hiring across the industry
B) Increased total revenues across the industry
C) Decreased average profitability across the industry
D) Increased entries into the industry

Accepted Answer

Intensified rivalry within an industry means that companies are competing more fiercely for market share, which can lead to price wars, increased advertising expenses, and lower profit margins. As a result, the average profitability across the industry decreases. Options A and B are not necessarily true as hiring and total revenues in the industry may not be impacted by increased rivalry. Option D is also not necessarily true as increased rivalry may discourage new entries into the market.

Question 2

A cooperative strategy:
A) Is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage
B) Is a strategy in which firms work together to achieve a shared objective
C) Is an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets
D) Specifies actions a firm takes to gain a competitive advantage by selecting and managing a group of different businesses competing in different product markets

Accepted Answer

A cooperative strategy is a strategy in which firms work together to achieve a shared objective. A and C describe integrated strategies, while D describes a diversification strategy.

Question 3

A disadvantage to being a first mover is that a company moves down the experience curve and loses the benefits from its experiences.

Accepted Answer

A disadvantage to being a first mover is not losing benefits from the experience curve; rather, it is the risk of high costs and uncertainty. First movers can actually gain advantages from moving down the experience curve.

Question 4

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 5

Often,successful imitation of the first mover's innovations allows the second mover to avoid the mistakes and major investments of the first mover.

Accepted Answer

Second movers can learn from the first mover's mistakes and improve upon their innovations, ultimately saving time and resources.

Question 6

Being a first mover in an industry or market guarantees that a company will develop a sustainable strategic position.

Accepted Answer

Being a first mover may give a company certain advantages, such as brand recognition and established market share. However, it does not guarantee a sustainable strategic position as competitors can enter the market with improved offerings or undercut prices. The success of a company ultimately depends on its ability to continuously adapt and innovate in response to market changes and competition.

Question 7

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

The chief disadvantage of being a first mover is the high degree of risk involved. As a first mover, a firm is essentially entering into uncharted territory, with no guarantee of success. The firm will also incur significant costs and investments in developing new products, services, or technologies. As a result, there is a greater risk of failure, which can be detrimental to the firm's financial health in the long run.

Question 8

Competitors are more likely to respond to competitive actions that are taken by:
A) Differentiators
B) Larger companies
C) First movers
D) Market leaders

Accepted Answer

Market leaders are typically seen as the biggest threat and therefore competitors are more likely to respond to their actions.

Question 9

In general,small firms are more likely than large firms to launch competitive actions and tend to do it more quickly.

Accepted Answer

Small firms often have less bureaucracy and fewer layers of decision-making, allowing them to make quick and decisive moves. They may also have limited resources and may need to be more aggressive in order to compete with larger firms. Larger firms may have to go through more processes, approvals, and consultations before launching a competitive action, which can slow down their response time.

Question 10

A competitive action can be one of two types,either ____ or ____.
A) Aggressive, defensive
B) Strategic, tactical
C) Quality-based, cost-based
D) Market-based, resource-based

Accepted Answer

Competitive actions are typically categorized as strategic, which involve long-term planning and significant resource commitments, or tactical, which are short-term actions aimed at gaining quick advantages.

Question 11

Competitive rivalry has the most effect on the firm's ____ strategies than the firm's other strategies.
A) Business-level
B) Corporate-level
C) Acquisition
D) International

Accepted Answer

Competitive rivalry affects the firm's business-level strategies such as pricing, differentiation, and marketing efforts aimed at gaining a competitive advantage in the marketplace. Corporate-level strategies focus on managing the portfolio of businesses and resources of the firm, while acquisition and international strategies deal with expanding the firm's operations and entering new markets.

Question 12

A second mover:
A) Is typically ineffective in its response to the 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 provide a product with greater customer value than the first mover's product. This is because the second mover learns from the mistakes of the first mover and makes improvements to their product or service to make it more attractive to customers.

Question 13

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, which are often short-term and specific, tend to elicit more immediate competitive responses than strategic actions, which are long-term and broader in scope.

Question 14

Competitive dynamics refers to the:
A) Circumstances in which competitors are aware of the degree of their mutual interdependence resulting from market commonality and resource similarity
B) Set of competitive actions and competitive responses the firm takes to build or defend its competitive advantages and to improve its market position
C) Total set of actions and responses taken by all firms competing within a market
D) Ongoing set of competitive actions and competitive responses between competitors as they maneuver for advantageous market position

Accepted Answer

Competitive dynamics refers to the total set of actions and responses taken by all firms competing within a market.

Question 15

Offensive competitive tactics include:
A) Threat of retaliation
B) Creating barriers to imitation
C) Seeking first-mover advantages
D) Collaborative tactics

Accepted Answer

The answer of Offensive competitive tactics include:
A) Threat of retaliation
B)...

Question 16

Multimarket competition occurs when firms:
A) Sell different products to the same customer
B) Have a high level of awareness of their competitors' strategic intent
C) Simultaneously enter into an attack strategy
D) Compete against each other in several geographic or product markets

Accepted Answer

Multimarket competition occurs when firms compete against each other in several geographic or product markets. This can lead to intense competition, as firms must balance their actions and strategies across different markets to remain competitive. Selling different products to the same customer (A) or having a high level of awareness of competitors' strategic intent (B) are not necessarily indicative of multimarket competition. Simultaneously entering into an attack strategy (C) may occur in multimarket competition but is not a defining characteristic.

Question 17

A strategy in which firms work together to achieve a shared objective is a:
A) Functional-level strategy
B) Business-level strategy
C) Corporate-level strategy
D) Cooperative strategy

Accepted Answer

A cooperative strategy is a type of strategy in which firms collaborate to achieve a common goal. This can take many forms, such as strategic alliances, joint ventures, or partnerships. The other options are not applicable, as functional-level, business-level, and corporate-level strategies refer to different levels of strategic decision-making within a single firm, rather than collaborative efforts between multiple firms.

Question 18

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 actually tend to have higher survival rates than second and later movers. This can be attributed to the fact that they are able to establish themselves in the market and gain a competitive advantage before others enter the market.

Question 19

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

The answer of First movers are:
A) Entrepreneurs who lead in...

Question 20

Large firms are likely to initiate more competitive actions along with more strategic actions during a given period.

Accepted Answer

Large firms often have the resources and capabilities to pursue both competitive and strategic actions, such as price changes and new product development, to maintain or improve their market position.

Quiz 10: Competitive Rivalry & Competitive Dynamics

Intensified rivalry within an industry results in:

A cooperative strategy:

A disadvantage to being a first mover is that a company moves down the experience curve and loses the benefits from its experiences.

Late movers are those firms that:

Often,successful imitation of the first mover's innovations allows the second mover to avoid the mistakes and major investments of the first mover.

Being a first mover in an industry or market guarantees that a company will develop a sustainable strategic position.

The chief disadvantage of being a first mover is the:

Competitors are more likely to respond to competitive actions that are taken by:

In general,small firms are more likely than large firms to launch competitive actions and tend to do it more quickly.

A competitive action can be one of two types,either or .

Competitive rivalry has the most effect on the firm's ____ strategies than the firm's other strategies.

A second mover:

On the whole there are more competitive responses to:

Competitive dynamics refers to the:

Offensive competitive tactics include:

Multimarket competition occurs when firms:

A strategy in which firms work together to achieve a shared objective is a:

Which of the following statements is false?

First movers are:

Large firms are likely to initiate more competitive actions along with more strategic actions during a given period.