Question 1

Starting a price war immediately a firm enters your industry is an entry-deterrent tactic that may dissuade other potential entrants for years to come.

Accepted Answer

A) True 
 B)False

Question 2

The Boston Consulting Group developed the concept of time-based competition.

Accepted Answer

A) True 
 B)False

Question 3

Innovation can be narrowly interpreted as bringing new products or processes to market, but also more broadly as introducing new ways of doing business into an industry or market (new business models).

Accepted Answer

A) True 
 B)False

Question 4

Isolating mechanisms are

Accepted Answer

A)  barriers that slow or stop the equalization of profits between firms, such as barriers to imitation.
B)  mechanisms that speed up the equalization of profits between firms.
C)  barriers that prevent potential entrants from grabbing a significant market share in the industry.
D)  mechanisms that limit or enhance the ex post equilibration of rents among individual firms, depending on their relative bargaining powers.E) C) and D)
F) None of the above

Question 5

The success of Japanese Total Quality Management

Accepted Answer

A)  shows that it is possible to pursue cost leadership and differentiation strategies simultaneously.
B)  refutes the perceived trade-off between low cost products and high quality products.
C)  has made porter's analysis outdated.
D)  b and c.E) None of the above
F) A) and B)

Question 6

In the long run competition eliminates differences in profitability between firms.

Accepted Answer

A) True 
 B)False

Question 7

Because some resources are valuable and not perfectly uniform (they are unique, not homogenous), acquiring or developing these can take years before a firm achieves and sustains higher profitability.

Accepted Answer

A) True 
 B)False

Question 8

A value chain analysis

Accepted Answer

A)  is an alternative framework within which to compare costs with your competitors.
B)  is an alternative framework within which to compare cost improvements in the last few years.
C)  is an alternative framework within which to compare a firm's profit margins with its competitors.
D)  is a framework for analyzing the chain of production of a good from nature to the 'final consumer'.E) None of the above
F) B) and D)

Question 9

A "Blue ocean strategy" refers to the creation of entirely new markets.

Accepted Answer

A) True 
 B)False

Question 10

The central task of a differentiation strategy is

Accepted Answer

A)  to see how you can 'tweak' the product by adding new features that differentiate it from rival products.
B)  to add valuable new features to your product so long as the extra value to customers exceeds the extra cost to you of supplying it.
C)  to ask how all your customers' interactions with your product could be enhanced even more.
D)  all of the above.E) A) and B)
F) A) and C)

Question 11

"Causal ambiguity" is the failure to clearly understand the source of a rival's competitive advantages - in particular which of the rival's distinctive features are causes and which are effects of another feature.

Accepted Answer

A) True 
 B)False

Question 12

Differentiation is when a firm

Accepted Answer

A)  offers customers something valuable and unique.
B)  offers customers something valuable and unique other than a low price.
C)  offers customers a uniquely low price.
D)  offers customers products with many additional features.E) A) and D)
F) A) and B)

Question 13

To "pre-empt" an entrant, a firm can occupy existing and potential strategic niches to reduce the range of opportunities open to potential entrants.

Accepted Answer

A) True 
 B)False

Question 14

A firm with a competitive advantage other than superior profitability may have

Accepted Answer

A)  a rising market share.
B)  strong and rising customer loyalty, or good executive perks, or both.
C)  invested in new technologies its rivals do not have.
D)  some or all of the above.E) A) and D)
F) All of the above

Question 15

Walmart has a competitive advantage in discount retailing in the United States.

Accepted Answer

A) True 
 B)False

Question 16

Isolating mechanisms are forces tending to equalize profit rates among firms, i.e., phenomena that erode a firm's competitive advantages.

Accepted Answer

A) True 
 B)False

Question 17

Porter's value chain

Accepted Answer

A)  can only be used to analyse cost leadership strategies.
B)  can be used to look at the current and additional costs of changes in a differentiation strategy.
C)  can be used to examine the current and additional service levels offered to customers in a differentiation strategy.
D)  b and c.E) B) and C)
F) None of the above

Question 18

"Strategic innovation" means introducing

Accepted Answer

A)  new products.
B)  new markets.
C)  new technologies.
D)  all of the above, or introducing new ways of doing business.E) B) and C)
F) None of the above

Question 19

Entrepreneurship can be defined as the ability to identify and rapidly respond to opportunities in the environment.

Accepted Answer

A) True 
 B)False

Question 20

Requirements for quick organizational response to a turbulent environment are

Accepted Answer

A)  flexible manufacturing systems and a good 'gut' feel for customer trends.
B)  excellent resources and capabilities.
C)  short product launch cycle times and excellent quality control.
D)  quick, accurate information, and short product launch cycle times.E) None of the above
F) A) and B)

Exam 4: The Nature and Sources of Competitive

Porter's value chain

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Requirements for quick organizational response to a turbulent environment are

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The Boston Consulting Group developed the concept of time-based competition.

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To "pre-empt" an entrant, a firm can occupy existing and potential strategic niches to reduce the range of opportunities open to potential entrants.

Correct AnswerverifiedShow Answer

Innovation can be narrowly interpreted as bringing new products or processes to market, but also more broadly as introducing new ways of doing business into an industry or market (new business models).

Correct AnswerverifiedShow Answer

Differentiation is when a firm

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In the long run competition eliminates differences in profitability between firms.

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Walmart has a competitive advantage in discount retailing in the United States.

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The success of Japanese Total Quality Management

Correct AnswerverifiedShow Answer

Because some resources are valuable and not perfectly uniform (they are unique, not homogenous), acquiring or developing these can take years before a firm achieves and sustains higher profitability.

Correct AnswerverifiedShow Answer

Starting a price war immediately a firm enters your industry is an entry-deterrent tactic that may dissuade other potential entrants for years to come.

Correct AnswerverifiedShow Answer

A firm with a competitive advantage other than superior profitability may have

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A "Blue ocean strategy" refers to the creation of entirely new markets.

Correct AnswerverifiedShow Answer

Entrepreneurship can be defined as the ability to identify and rapidly respond to opportunities in the environment.

Correct AnswerverifiedShow Answer

"Causal ambiguity" is the failure to clearly understand the source of a rival's competitive advantages - in particular which of the rival's distinctive features are causes and which are effects of another feature.

Correct AnswerverifiedShow Answer

"Strategic innovation" means introducing

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The central task of a differentiation strategy is

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Isolating mechanisms are

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A value chain analysis

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Isolating mechanisms are forces tending to equalize profit rates among firms, i.e., phenomena that erode a firm's competitive advantages.

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