Question 1

Firms that have a high degree of resource similarity are likely to have similar strengths and weaknesses.

Accepted Answer

Resource similarity refers to similarity in the type, quantity, and quality of resources that firms possess. Firms with high resource similarity are likely to have similar strengths and weaknesses because they have similar resources to compete in the same markets. For example, two mobile phone manufacturers with similar resources are likely to face similar strengths and weaknesses in the highly competitive mobile phone market.

Question 2

If an attack is so subtle that rivals are not aware of it, the attacker's objectives are not likely to have been attained.

Accepted Answer

False

Question 3

Thrust makes use of military theory that the attacker needs to have at least a three-to-one advantage to overcome a well-defended position through a conventional frontal assault.

Accepted Answer

Thrust does utilize military theory that states an attacker needs to have at least a three-to-one advantage to overcome a well-defended position through a conventional frontal assault.

Question 4

An extender strategy is being used when local firms engage in rapid learning to approach the capabilities of the MNEs and then expand overseas.

Accepted Answer

The answer of An extender strategy is being used when...

Question 5

Multimarket competition occurs when firms engage the same rivals in multiple markets.

Accepted Answer

Multimarket competition refers to competition between firms in multiple markets. It occurs when firms face each other as rivals in more than one market, and their performance in one market affects their performance in another market.

Question 6

Local firms' primary strengths lie in a deep understanding of local markets, and thus they would pursue a dodger strategy.

Accepted Answer

The answer of Local firms' primary strengths lie in a...

Question 7

An extender strategy may be appropriate in some industries where pressures for globalization are relatively low.

Accepted Answer

An extender strategy focuses on extending a company's existing products or services to new markets, which may be more appropriate in industries with low globalization pressures. In contrast, a global standardization strategy is better suited for industries with high pressures for globalization.

Question 8

The capability to attack in multiple markets throws the firm off balance leaving it vulnerable to rivals and thus reducing value.

Accepted Answer

The capability to attack in multiple markets can actually increase a firm's value by diversifying its revenue streams and reducing reliance on a single market. However, it is important for the firm to have a cohesive strategy and strong management to effectively compete in each market.

Question 9

US courts have not sought to unilaterally punish non-US cartels (if they are legal elsewhere) simply because they may have a substantial adverse impact on US markets.

Accepted Answer

US courts have sought to punish non-US cartels even if they are legal elsewhere if their actions have a substantial adverse impact on US markets. This is often done through the application of US antitrust laws such as the Sherman Act or the Foreign Trade Antitrust Improvements Act.

Question 10

Industry-based considerations are fundamentally concerned with the very first of the Porter five forces, interfirm rivalry.

Accepted Answer

Industry-based considerations, such as interfirm rivalry, are the foundation of the Porter five forces framework. The other four forces (threat of substitutes, bargaining power of buyers, bargaining power of suppliers, and threat of new entrants) all contribute to understanding the level of competition within an industry.

Question 11

Critics of US policy on dumping at least agree that our policy on predatory pricing is consistent both domestically and internationally.

Accepted Answer

Critics of US policy on dumping generally argue that our policy on predatory pricing is not consistent both domestically and internationally.

Question 12

If the attacked market is of marginal value, managers may decide not to counterattack.

Accepted Answer

It is not worth investing resources to defend a market of marginal value. It is better to focus on more profitable markets.

Question 13

The "strategy as action" perspective highlights the power of creative destruction.

Accepted Answer

The "strategy as action" perspective emphasizes the importance of taking bold and innovative actions to disrupt existing business models and create new opportunities for growth. This can involve the process of creative destruction, which involves replacing outdated practices and technologies with newer and more effective ones to drive progress and innovation within an industry. Therefore, the statement is true.

Question 14

Multimarket competition destroys mutual forbearance.

Accepted Answer

The answer of Multimarket competition destroys mutual forbearance....

Question 15

Barriers for entrants with similar products and with substitute products are involved in the other two of the five forces.

Accepted Answer

Barriers for entrants and substitutes are two separate forces in Porter's Five Forces framework. Both can create challenges for new entrants trying to compete with established players in a market.

Question 16

Under antitrust law a company can be in trouble for setting prices too high but not for setting them too low.

Accepted Answer

This statement is incorrect. Under antitrust law, a company can be in trouble for setting prices too low if it is done with the intention of driving competitors out of business and creating a monopoly. This is known as predatory pricing, and it is illegal under antitrust laws.

Question 17

A strategy that leverages local assets is called an extender strategy.

Accepted Answer

A strategy that leverages local assets is actually called a place-based strategy.

Question 18

Collusion survives because it does not have an incentive problem as is illustrated by the prisoner's dilemma.

Accepted Answer

The statement is incorrect. Collusion does have an incentive problem, as illustrated by the prisoner's dilemma. In the dilemma, two individuals have to decide whether to cooperate with each other or betray each other to the authorities. The optimal outcome is for both individuals to cooperate and receive a light sentence, but if one individual betrays the other, they receive a reduced sentence while the other receives a severe sentence. This creates an incentive for each individual to betray the other, leading to a suboptimal outcome. Similarly, in collusion, firms have an incentive to cheat and gain a larger market share or profit, even though it would be better for both firms to cooperate and maintain higher prices.

Question 19

Strategy involves planning for actions rather than reactions or interaction.

Accepted Answer

The answer of Strategy involves planning for actions rather than...

Question 20

Bargaining can take place through signals and actions.

Accepted Answer

Bargaining can take place through nonverbal signals, such as body language, as well as actions, such as offering a lower price or indicating willingness to walk away.

Quiz 8: Global Competitive Dynamics