MAN Chapt 6 Part 2

Which of the following does not generally account for why the supply side of an industry may be fragmented and contain thousands of companies? A) A condition where most all competitors have, for one reason or another, chosen to pursue focus and market niche strategies B) Low entry barriers that permit small firms to enter cheaply and quickly C) An absence of scale economies permits small companies to compete on an equal cost footing with larger firms D) Buyer preferences and requirements are so diverse that very large numbers of firms can easily coexist trying to accommodate differing buyer tastes, expectations, and pocketbooks E) The scope of the geographic market for the industry's product or service is transitioning from national to global, putting companies in more and more countries in the same competitive arena

A) A condition where most all competitors have, for one reason or another, chosen to pursue focus and market niche strategies

Which one of the following is not a strategic pitfall companies can make during the transition from fairly rapid growth to industry maturity? A) Going overboard in outsourcing the performance of value chain activities to allies and partners B) Steering a middle course between low-cost, differentiation, and focusing, thus leaving the firm stuck in the middle C) Overexpanding in the face of slowing growth D) Overspending on advertising and sales promotion efforts in a losing effort to combat the growth slowdown E) Failing to pursue cost reduction aggressively enough

A) Going overboard in outsourcing the performance of value chain activities to allies and partners

Which of the following is not a typical feature of an emerging industry or a challenge that companies in emerging industries have to contend with and try to overcome? A) How to raise sufficient capital to fund an R&D effort that will enable the company to win the race against rivals to patent the industry's technology B) Many potential buyers expect first-generation products to be rapidly improved and delay their purchase until technology and product design mature C) The marketing challenge is to induce first-time purchase and overcome customer concerns about product features, performance reliability, and conflicting claims of rival firms D) Strong learning and experience curve effects may be present, allowing significant price reductions as volume builds and costs fall E) There are often uncertainties surrounding an emerging industry's technology with no consensus regarding which product attributes will prove decisive in winning buyer favor

A) How to raise sufficient capital to fund an R&D effort that will enable the company to win the race against rivals to patent the industry's technology

Which one of the following strategic actions is not well-matched to dealing with the transition from rapid growth to industry maturity? A) Steering a middle course between low cost, differentiation, and focusing B) Pruning marginal products and models C) Improving value chain efficiency D) Acquiring rival companies at bargain prices E) Trimming costs

A) Steering a middle course between low cost, differentiation, and focusing

The best strategic alliances A) are highly selective, focusing on particular value chain activities and on obtaining a particular competitive benefit. B) are those whose purpose is to create an industry key success factor. C) are those which help a company move quickly from one strategic group to another. D) involve joining forces in R&D to develop new technologies cheaper than a company could develop the technology on its own. E) aim at raising an industry's barriers to entry.

A) are highly selective, focusing on particular value chain activities and on obtaining a particular

Mergers and acquisitions are often driven by such strategic objectives as to A) expand a company's geographic coverage or extend its business into new product categories. B) reduce the number of industry key success factors. C) reduce the number of strategic groups in the industry. D) facilitate a company's shift from a low-cost leadership strategy to a focused low-cost strategy. E) lengthen a company's value chain and thereby put it in better position to deliver superior value to buyers.

A) expand a company's geographic coverage or extend its business into new product categories.

Vertical integration strategies A) extend a company's competitive scope within the same industry by expanding its operations across more parts of the industry value chain. B) are one of the best strategic options for helping companies win the race for global market leadership. C) offer good potential to expand a company's lineup of products and services. D) are particularly effective in boosting a company's ability to expand into additional geographic markets, particularly the markets of foreign countries. E) are a good strategy option for helping a company to revamp its value chain and bypass low value- added activities.

A) extend a company's competitive scope within the same industry by expanding its operations across

Businesses competing in stagnant or declining industries must A) make a fundamental strategic choice—whether to remain committed to the industry for the long-term despite the industry's dim prospects or whether to pursue an end-game strategy to withdraw gradually or quickly from the market. B) pursue vertical integration and gain greater operating control over more stages of the industry's value chain. C) initiate deep price cuts to rejuvenate long-term demand and expand into the markets of foreign countries, especially emerging country markets. D) outsource as many value chain activities as possible, particularly as concerns production-related activities. E) steer a middle course between low-cost, differentiation and focusing and adopt a best-cost producer strategy aimed squarely at being a middle-of-the-market seller.

A) make a fundamental strategic choice—whether to remain committed to the industry for the long-term

Which of the following is not usually a characteristic of competing in an emerging industry? A) There's much speculation about how the industry will function, how fast it will grow, and how big it will get. B) Technological know-how is freely shared and exchanged among the early participants, with no competitive advantage attached to patents and proprietary technology. C) There is uncertainty regarding which of several competing technologies will win out or which product attributes will win the greatest buyer favor and drive buyer purchases. D) Many potential buyers expect first-generation products to be rapidly improved and delay their purchase until technology and product design mature. E) Entry barriers tend to be relatively low.

B) Technological know-how is freely shared and exchanged among the early participants, with no

The difference between a merger and an acquisition is that A) a merger involves one company purchasing the assets of another company with cash, whereas an acqui- sition involves a company acquiring another company by buying all of the shares of its common stock. B) a merger is a pooling of equals whereas an acquisition involves one company, the acquirer, purchasing and absorbing the operations of another company, the acquired. C) in a merger the companies retain their original names whereas in an acquisition the name of the company being acquired is changed to be the name of the acquiring company. D) a merger is a combination of three or more companies whereas an acquisition is a pooling of interests of just two companies E) a merger involves two or more companies deciding to adopt the same strategy whereas an acquisition involves one company taking over the strategy-making function of another company.

B) a merger is a pooling of equals whereas an acquisition involves one company, the acquirer, purchasing

Strategic alliances A) are the cheapest means of developing new technologies and getting new products to market quickly. B) are collaborative arrangements where two or more companies join forces to achieve mutually beneficial strategic outcomes. C) are a proven means of reducing the costs of performing value chain activities. D) are best used to insulate a company from the impact of the five competitive forces. E) help insulate a firm from the adverse impacts of industry driving forces.

B) are collaborative arrangements where two or more companies join forces to achieve mutually beneficial

The Achilles heel (or biggest disadvantage/pitfall)of relying heavily on alliances and cooperative strategies is A) that partners will not fully cooperate or share all they know, preferring instead to guard their most valuable information and protect their more valuable know-how. B) becoming dependent on other companies for essential expertise and capabilities. C) the added time and extra expenses associated with engaging in collaborative efforts. D) having to compromise the company's own priorities and strategies in reaching agreements with partners. E) the collaborative arrangements will not live up to expectations.

B) becoming dependent on other companies for essential expertise and capabilities.

In trying to deal with turbulent and rapid changes in the marketplace, a company A) can either pursue profitability or market share, but not both. B) can react to change, anticipate change, and/or try to lead change. C) should be a first-mover, a fast follower, or a slow-mover-as may be most expedient. D) can play offense, play defense, or utilize end-run offensives to compete in those market segments where change occurs at a more leisurely pace. E) should be a technological leader, a product quality leader, or a customer service leader-whichever is most appealing to buyers.

B) can react to change, anticipate change, and/or try to lead change.

Entering into strategic alliances and collaborative partnerships can be competitively valuable because A) working closely with outsiders is essential in developing new technologies and new products in virtually every industry. B) cooperative arrangements with other companies are very helpful in racing against rivals to build a strong global presence and/or racing to seize opportunities on the frontiers of advancing technology. C) they represent highly effective ways to achieve low-cost leadership and capture first-mover advantages. D) they are a powerful way for companies to build loyalty and goodwill among customers with diverse needs and expectations. E) they are quite effective in helping a company transfer the risks of threatening external developments to other companies.

B) cooperative arrangements with other companies are very helpful in racing against rivals to build a

An end-game strategy in a stagnant or declining industry usually involves A) stressing differentiation based on quality improvement and product innovation. B) either a fast-exit/sell-out quickly strategy or a slow exit strategy that involves a gradual phasing down of operations coupled with an objective of getting the most cash flow from the business. C) pursuing a focused strategy aimed at the fastest-growing or slowest-decaying market segments. D) becoming a lower-cost producer. E) initiating price cuts, boosting advertising, adding new features and more models, and stressing improved customer service so as to achieve strong product differentiation.

B) either a fast-exit/sell-out quickly strategy or a slow exit strategy that involves a gradual phasing down

Mergers and acquisitions A) are nearly always successful in achieving their desired purpose. B) frequently do not produce the hoped-for outcomes. C) are generally less effective than forming alliances or partnerships with these same companies. D) are highly risky because of the financial drain that comes from using the company's cash resources to pay for the costs of the merger or acquisition. E) are usually more successful in achieving cost reductions than in expanding a company's market opportunities.

B) frequently do not produce the hoped-for outcomes.

The transition to a slower-growth, maturing industry environment tends to result in A) a greater emphasis on backward vertical integration. B) growing buyer sophistication and more head-to-head competition for market share. C) rising industry profitability as rivalry tapers off and there's less head-to-head competition for market share among rival firms. D) reduced risks associated with capacity additions and significantly faster rates of product innovation as sellers endeavor to rekindle buyer interest. E) reduced emphasis on mergers and acquisitions.

B) growing buyer sophistication and more head-to-head competition for market share.

The big risk of employing an outsourcing strategy is A) causing the company to become partially integrated instead of being fully integrated. B) hollowing out a firm's own capabilities and losing touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success. C) hurting a company's R&D capability. D) putting the company in the position of being a late mover instead of an early mover. E) increasing the firm's risk exposure to both supply chain management failures and shifts in the composition of the industry value chain.

B) hollowing out a firm's own capabilities and losing touch with activities and expertise that contribute

Young companies in fast-growing, emerging markets face such hurdles as A) learning to be a courageous first-mover, becoming skilled cost-cutters, and developing mass merchandising skills. B) managing rapid expansion, defending against competitors trying to horn in on their success, and building a strong competitive position for the long term. C) acquiring an intuitive feel for what buyers will like and how they will use the product. D) learning to conduct reliable market research, figuring out how to build scale economies, and becoming adept at product innovation. E) deciding which of the five generic competitive strategies to adopt, whether to be a risk-taker or risk- avoider, and what balance to strike between offensive and defensive strategies.

B) managing rapid expansion, defending against competitors trying to horn in on their success, and

Merger and acquisition strategies A) are nearly always a superior strategic alternative to forming alliances or partnerships with these same companies. B) may offer considerable cost-saving opportunities and can also be beneficial in helping a company try to invent a new industry. C) are a particularly effective way of pursuing a blue ocean strategy and outsourcing strategies. D) seldom are a superior strategic alternative to forming alliances with these same companies because of the financial drain of using the company's cash resources to accomplish the merger or acquisition. E) are one of the best ways for helping a company strongly differentiate its product offering and use a differentiation strategy to strengthen its market position.

B) may offer considerable cost-saving opportunities and can also be beneficial in helping a company try

For backward vertical integration into the business of suppliers to be a viable and profitable strategy, a company A) must first be a proficient manufacturer. B) must be able to achieve the same scale economies as outside suppliers and match or beat suppliers' production efficiency with no drop-off in quality. C) must have excess production capacity, so that it has ample in-house ability to undertake additional production activities. D) needs to have a wide product line, so that it can supply parts and components for many products. E) should have a distinctive competence in production process technology and at least a core competence in manufacturing R&D.

B) must be able to achieve the same scale economies as outside suppliers and match or beat suppliers'

A company competing in a rapid-growth industry A) needs to be primarily concerned about building first-rate R&D capabilities. B) needs a strategy predicated on growing faster than the market average, so that it can boost its market share and improve its competitive standing vis-à-vis rivals. C) should put top priority on improving product quality. D) is well advised to employ a best-cost provider strategy. E) is doomed if it is not an aggressive first-mover.

B) needs a strategy predicated on growing faster than the market average, so that it can boost its market

Outsourcing strategies can offer such advantages as A) increasing a company's ability to strongly differentiate its product and be successful with either a broad differentiation strategy or a focused differentiation strategy. B) obtaining higher quality and/or cheaper components or services, improving a company's ability to innovate, and reducing its risk exposure. C) speeding a company's entry into foreign markets. D) permitting greater use of strategic alliances and collaborative partnerships. E) giving a firm more direct control over the costs of value chain activities.

B) obtaining higher quality and/or cheaper components or services, improving a company's ability to

The typical strategic mistakes companies can make during the transition from fairly rapid growth to industry maturity include A) pursuing a differentiation strategy instead of a low-cost strategy; not capitalizing on economies of scale; and failing to adequately broaden the product line. B) steering a middle course between low-cost, differentiation, and focusing; being slow to respond to stiffening competition; and overexpanding in the face of slowing growth. C) pursuing a low-cost leadership strategy; spending too little on marketing and advertising efforts; and putting too much emphasis on new product R&D and product innovation. D) sacrificing long-term competitive position for short-term profits; outsourcing too many value chain activities to allies and partners, and not pursuing aggressive acquisition of weaker rival firms. E) merging with weaker rather than stronger rivals; failing to pursue product differentiation; and abandoning strategic alliances with outsiders.

B) steering a middle course between low-cost, differentiation, and focusing; being slow to respond to stiffening competition; and overexpanding in the face of slowing growth.

The two big drivers of outsourcing are A) increased ability to cut R&D expenses and increased ability to avoid the problems of strategic alliances. B) that outsiders can often perform certain activities better or cheaper and outsourcing allows a firm to focus its entire energies on those activities that are at the center of its expertise (its core competencies). C) a desire to reduce the company's investment in fixed assets and the need to narrow the scope of the company's in-house competencies and competitive capabilities. D) the ability to avoid capital investments that accompany vertical integration and a desire to reduce the company's risk exposure to changing technology and/or changing buyer preferences. E) that a smaller in-house work force and a low investment in intellectual capital produce cost savings.

B) that outsiders can often perform certain activities better or cheaper and outsourcing allows a firm to focus

In trying to deal with a turbulent, fast-changing market, a company's three strategic options are A) to pursue low-cost, differentiation, or best-cost strategies. B) to react to change, to anticipate change, and/or to try to lead change. C) to be a first-mover, a fast follower, or a slow-mover-whichever is most expedient. D) play offense, play defense, or utilize focus strategies to compete in those market segments where change occurs at a more leisurely pace. E) to pursue short-term profitability, intermediate-term profitability, or long-term profitability.

B) to react to change, to anticipate change, and/or to try to lead change.

In a turbulent, fast-changing industry environment, a company's approach to coping with rapid change should, ideally, A) strive to compete on the basis of low-cost/low-price rather than on the basis of strong product differentiation or best-cost. B) try to lead change with proactive strategic moves while at the same time trying to anticipate and prepare for upcoming changes and being quick to react to unexpected developments. C) be a consistent first-mover or a consistent fast follower or a consistent slow-moverwhichever best fits management's temperaments and shareholder expectations. D) involve pursuing a focused niche strategy aimed at the fastest-growing market segments. E) place strong emphasis on building and strengthening the company's long-term market position rather than worrying excessively about short-term profitability and ROE.

B) try to lead change with proactive strategic moves while at the same time trying to anticipate and prepare for upcoming changes and being quick to react to unexpected developments.

Which of the following are commonly encountered types of market conditions that must be considered by strategy-makers? A) Entrepreneurial industries, change dominant markets, and resource based industries. B) Hostile markets, competitive markets, oligopolies, and monopolies. C) Emerging markets, mature markets, fragmented markets, and turbulent markets. D) Lowe cost markets, differentiation markets, best cost markets, and focused industries. E) Moderately competitive industries, fiercely competitive industries, and weakly competitive industries.

C) Emerging markets, mature markets, fragmented markets, and turbulent markets.

Which of the following is not usually a promising option for competing in a fragmented industry? A) Specializing by product type or by customer type B) Becoming a low-cost operator C) Employing a best-cost provider strategy aimed at giving buyers more value for their money and trying to appeal to a broader customer base D) Focusing on a limited geographic area E) Constructing and operating "formula" facilities at many different locations

C) Employing a best-cost provider strategy aimed at giving buyers more value for their money and trying

Which of the following is not one of the factors that affects whether a strategic alliance will be successful and realize its intended benefits? A) Picking a good partner B) Recognizing that the alliance must benefit both sides C) Minimizing the amount of resources that the partners commit to the alliance D) Ensuring that both parties live up to their commitments E) Structuring the decision-making process so that actions can be taken swiftly when needed

C) Minimizing the amount of resources that the partners commit to the alliance

Which one of the following statements does not represent one of the typical fundamental changes in an industry as it approaches maturity? A) Industry profitability falls temporarily or permanently B) International competition increases C) New scale economies develop and overall costs per unit produced and sold drop significantly D) Increased competitive emphasis is placed on lowering costs and improving service E) Firms encounter growing difficulty in coming up with new product innovations and developing new uses and applications for the product

C) New scale economies develop and overall costs per unit produced and sold drop significantly

Companies competing in rapid growth industries are not well-advised to consider which one of the following strategy elements in crafting their strategy? A) Expanding the company's geographic coverage B) Gaining access to additional distributional channels and sales outlets C) Pushing hard to develop a distinctive competence in new technology R&D D) Expanding the product line to add models/styles that appeal to a wider range of buyers E) Driving down costs per unit so as to enable price reductions that attract droves of new customers

C) Pushing hard to develop a distinctive competence in new technology R&D

Which one of the following is not a strategically beneficial reason why a company may enter into strategic partnerships or cooperative arrangements with key suppliers, distributors, or makers of complementary products? A) To improve access to new markets B) To expedite the development of promising new technologies or products C) To enable greater opportunities for employee advancement D) To improve supply chain efficiency E) To overcome disadvantages of small production volumes that limit scale economies and low production cots

C) To enable greater opportunities for employee advancement

Which one of the following is not a strategic choice that a company must make to complement and supplement its choice of one of the five generic competitive strategies? A) Whether to enter into strategic alliances or collaborative partnerships B) Whether to outsource certain value chain activities C) Whether to employ a market share leadership strategy D) Whether to integrate forward or backward into more stages of the industry value chain E) Whether to bolster the company's market position and competitiveness via acquisition or merger

C) Whether to employ a market share leadership strategy

A slow-exit type of end-game strategy involves A) retreating to a market niche which the firm can defend for a few years. B) selling off assets gradually and liquidating the business. C) a gradual phasing down of operations coupled with an objective of generating the greatest possible harvest of cash from the business for as long as possible. D) withdrawing, one by one, from the various market segments in which the firm competes and then selling the business to the buyer offering the highest price. E) pruning the product line down to a few select products which the firm can still market profitably for a few more years, then when they begin to decline selling out to the highest bidder.

C) a gradual phasing down of operations coupled with an objective of generating the greatest possible

Companies racing against rivals for global market leadership need strategic alliances and collaborative partnerships with companies in foreign countries to A) combat the bargaining power of foreign suppliers and help defend against the competitive threat of substitute products produced by foreign rivals. B) help raise needed financial capital from foreign banks and use the brand names of their partners to make sales to foreign buyers. C) get into critical country markets quickly, gain inside knowledge about unfamiliar markets and cultures, and access valuable skills and competencies that are concentrated in particular geographic locations. D) help wage price wars against foreign competitors. E) exercise better control over efforts to revamp the global industry value chain.

C) get into critical country markets quickly, gain inside knowledge about unfamiliar markets and cultures, and access valuable skills and competencies that are concentrated in particular geographic locations.

A company racing to seize opportunities on the frontiers of advancing technology often utilizes strategic alliances and collaborative partnerships to A) discourage rival companies from merging with or acquiring the very companies that it is partnering with. B) reduce overall business risk and raise entry barriers into the newly emerging industry. C) help master new technologies and build new expertise and competencies, establish a stronger beachhead for participating in the target industry, and open up broader opportunities in the target industry. D) help defeat competitors that are employing broad differentiation strategies. E) enhance its chances of achieving global low-cost leadership.

C) help master new technologies and build new expertise and competencies, establish a stronger beachhead

The types of strategic initiatives that seem to offer the best payoff in fast-changing markets include A) being clever at being a fast follower, doing a better job than rivals in anticipating and planning for change, and striving for a low-cost edge over rivals. B) having a wider product line than rivals, making sure the company's products are strongly differentiated, and having a shorter value chain than rivals so the company has fewer activities to revamp as the market changes. C) investing aggressively to stay on the leading edge of technological know-how; launching fresh actions every few months; having quick-response capabilities; and keeping the company's products fresh and exciting enough to stand out in the midst of all the change that is taking place. D) doing a better job than rivals of leading industry change and being a successful first mover; having sufficient internal resources and competencies so the company does not need to have many strategic partners; and outspending rivals on new product R&D. E) doing a better job than rivals of reacting and responding to rapid change, concentrating on a few crucial value chain activities and farming the rest out to strategic partners, and being a fast follower as opposed to a first-mover in technology.

C) investing aggressively to stay on the leading edge of technological know-how; launching fresh actions

A strategic alliance A) is a collaborative arrangement where companies join forces to defeat mutual competitive rivals. B) involves two or more companies joining forces to pursue vertical integration. C) is a formal agreement between two or more companies in which there is strategically relevant collaboration of some sort, joint contribution of resources, shared risk, shared control, and mutual dependence. D) is a partnership between two companies that is typically intended to eliminate the need to engage in outsourcing. E) is usually a cheaper and more effective way for companies to join forces than is merger.

C) is a formal agreement between two or more companies in which there is strategically relevant

The central strategy-making challenge in a turbulent market environment is A) remaining the industry's first-mover. B) building stronger supply chain alliances than rivals. C) managing change. D) deciding when to cut prices versus when to improve product features and performance. E) how often to change the company's business model without impairing profitability.

C) managing change.

To be successful in emerging industries, companies usually have to fashion a strategy that includes such strategic elements as A) avoiding the "first mover disadvantages" associated with making early commitments to alternative technologies, wider product selection, different styling, or new distribution channels. B) building core competencies and competitive capabilities rapidly so as to avoid having to enter into strategic alliances and partnerships and thus share the firm's potential long-term profitability with outsiders. C) pushing hard to perfect the technology, improve product quality, and develop additional attractive performance features. D) charging first-time buyers a premium price (to help grow revenues quickly) and being a technological follower (so as to conserve scarce financial resources). E) not cutting prices until buyer demand really mushrooms and being a late-mover in introducing new products (so as to avoid the costs and risks of introducing something that turns out to be a bust in the marketplace).

C) pushing hard to perfect the technology, improve product quality, and develop additional attractive performance features.

Promising strategic options for companies competing in a fragmented industry include A) constructing and operating customized facilities at many different locations so as to match local buyer expectations and varying market conditions. B) becoming a best-cost provider and pursuing a multicountry strategy to achieve above-average growth. C) specializing by product type or by customer type, becoming a low-cost operator, and focusing on a limited geographic area. D) striving to become the industry's low-cost leader. E) using a broad differentiation strategy to set the company's product offering well apart from rivals and striving to sell in an ever larger number of country markets.

C) specializing by product type or by customer type, becoming a low-cost operator, and focusing on a

The race among rivals for industry leadership is more likely to be a marathon rather than a sprint when, A) new industry or market segments are yet to be developed and create altogether new consumer demand. B) fast followers find it easy to leapfrog the pioneer with even better next-generation products of their own. C) the market depends on the development of complementary products or services that are currently not available, buyers have high switching costs, and influential rivals are in position to derail the efforts of a first-mover. D) entry barriers are high, substitute products or services or readily available, and buyers are prone to negotiate aggressively for better terms and lower prices. E) there are nearly always big advantages to being a slow mover rather than an early mover, especially as concerns avoiding the "mistakes" of first or early movers.

C) the market depends on the development of complementary products or services that are currently not

Which of the following is not a typical reason that many alliances prove unstable or break apart? A) Diverging objectives and priorities B) An inability to work well together C) The emergence of more attractive technological paths D) Disagreement over how to divide the profits gained from joint collaboration E) Changing conditions that render the purpose of the alliance obsolete

D) Disagreement over how to divide the profits gained from joint collaboration

Which of the following is not one of the benefits of outsourcing value chain activities presently performed in-house? A) Streamlines company operations in ways that improve organizational flexibility and cut the time it takes to get new products into the marketplace B) Allows a company to concentrate on its core business, leverage its key resources, and do even better what it already does best C) Helps the company assemble diverse kinds of expertise speedily and efficiently D) Enables a company to gain better access to end users and better market visibility E) Improves a company's ability to innovate

D) Enables a company to gain better access to end users and better market visibility

Which of the following is not a typical strategic objective or benefit that drives mergers and acquisitions? A) To gain quick access to new technologies or other resources and capabilities B) To create a more cost-efficient operation out of the combined companies C) To expand a company's geographic coverage D) To facilitate a company's shift from a broad differentiation strategy to a focused differentiation strategy E) To extend a company's business into new product categories

D) To facilitate a company's shift from a broad differentiation strategy to a focused differentiation strategy

Which one of the following is not likely to be a suitable strategy option for companies competing in rapid- growth industries? A) Driving down costs per unit so as to enable price reductions that attract droves of new customers B) Pursuing rapid product innovation, both to set a company's product offering apart from rivals and to incorporate attributes that appeal to growing numbers of customers C) Gaining access to additional distributional channels and sales outlets D) Vertically integrating forward and backward to enable greater control of the industry value chain E) Expanding the product line to add models/styles that appeal to a wider range of buyers

D) Vertically integrating forward and backward to enable greater control of the industry value chain

In which of the following instances is being a first-mover not particularly advantageous? A) When moving first with a preemptive strike makes imitation difficult or unlikely B) When first-time buyers remain strongly loyal to pioneering firms in making repeat purchases C) When early commitments to new technologies, types of components, or emerging distribution channels produce an absolute cost advantage over rivals D) When markets are slow to accept the innovative product offering of a first-mover and fast followers possess sufficient resources and marketing muscle to overtake a first mover E) When being a pioneer helps build a firm's image with buyers

D) When markets are slow to accept the innovative product offering of a first-mover and fast followers

n which of the following cases are late-mover advantages (or first-mover disadvantages) not likely to arise? A) When the costs of pioneering are much higher than being a follower and only negligible learning/ experience benefits accrue to the pioneer B) When the marketplace is skeptical about the benefits of a new technology or product being pioneered by a first-mover C) When the pioneer's products are somewhat primitive and are easily bested by late movers D) When opportunities exist to invent a new industry or distinctive market segment that creates altogether new demand E) When technological change is rapid and fast-following rivals find it easy to leapfrog the pioneer with next-generation products of their own

D) When opportunities exist to invent a new industry or distinctive market segment that creates altogether

Experience indicates that strategic alliances A) are generally successful. B) work well in cooperatively developing new technologies and new products but seldom work well in promoting greater supply chain efficiency. C) work best when they are aimed at achieving a mutually beneficial competitive advantage for the allies. D) have a high "divorce rate." E) are rarely useful in helping a company win the race for global industry leadership.

D) have a high "divorce rate."

A blue ocean strategy A) is an offensive attack used by a market leader to steal customers away from unsuspecting smaller rivals. B) involves a preemptive strike to secure an advantageous position in a fast-growing market segment. C) works best when a company is the industry's low-cost leader. D) involves abandoning efforts to beat out competitors in existing markets and, instead, inventing a new industry or new market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand. E) involves the use of highly creative, never-used-before strategic moves to attack the competitive weaknesses of rivals.

D) involves abandoning efforts to beat out competitors in existing markets and, instead, inventing a new

In a maturing market where the rates of growth are on the decline, rival firms can often improve their competitive position in the marketplace by A) pursuing backward and/or forward vertical integration to capture greater control over the industry value chain and shifting to standardized product offerings. B) concentrating on adding new models and performance features, emphasizing product innovation, and spending heavily on advertising to achieve much stronger product differentiation vis-à-vis rivals. C) shifting to focus or market niche strategies so as to concentrate exclusively on those buyers and models/ styles where demand is continuing to grow at above-average rates. D) pruning marginal products and models, improving value chain efficiency, trimming costs, acquiring rival firms at bargain prices, and building new or more flexible competitive capabilities, and expanding internationally. E) competing aggressively on the basis of superior customer service and adding new models and styles to broaden the product offering.

D) pruning marginal products and models, improving value chain efficiency, trimming costs, acquiring

Potentially promising strategy alternatives for a company that decides to stick with a declining industry, because top management is encouraged by the remaining opportunities and/or sees merit in striving for market share leadership, include A) deemphasizing superior quality and customer service and shifting to a more standardized product offering. B) concentrating on vertical integration to gain operating control over more stages of the industry's value chain. C) initiating deep price cuts to rekindle demand for the product. D) pursuing a focused strategy aimed at the fastest-growing or slowest-decaying market segments and stressing differentiation based on quality improvement and product innovation. E) steering a middle course between low-cost, differentiation and focusing and adopting a best-cost producer strategy aimed squarely at being a middle-of-the-market seller.

D) pursuing a focused strategy aimed at the fastest-growing or slowest-decaying market segments and

A turbulent or fast-changing industry environment is characterized by A) rapid entry and exit of participating firms (there's an unusually high competitor turnover rate compared to other industries). B) the need for industry members to change to radically different strategies several times a year (company strategies have a very short life). C) the rapid appearance and disappearance of industry driving forces (such that the industry is in constant turmoil). D) rapid technological change, short product life cycles, the entry of important new rivals, lots of competitive maneuvering by rivals, and fast-evolving customer requirements and expectations (all occurring in a manner that creates swirling market conditions). E) All of these.

D) rapid technological change, short product life cycles, the entry of important new rivals, lots of

The two best reasons for investing company resources in vertical integration (either forward or backward) are to A) expand into foreign markets and/or control more of the industry value chain. B) broaden the firm's product line and/or avoid the need for outsourcing. C) gain a first mover advantage over rivals in revamping the industry value chain. D) strengthen the company's competitive position and/or boost its profitability. E) achieve product differentiation and/or lengthen the company's value chain to include more activities performed in-house and thereby gain greater ability to reduce internal operating costs.

D) strengthen the company's competitive position and/or boost its profitability.

An industry is said to be fragmented when A) it contains an unusually large number of different market segments and distinct buyer groups. B) demand for the product is scattered over many different country markets. C) the industry value chain is divided into 15 or more distinctly different stages. D) the supply side of the market is populated by hundreds, perhaps thousands of sellers, no one of which has a substantial share of total industry sales. E) the annual number of buyer-seller transactions is in the millions (or higher).

D) the supply side of the market is populated by hundreds, perhaps thousands of sellers, no one of which

Which of the following is usually a promising strategic option for competing in a fragmented industry? A) Specializing by product type or by customer type B) Becoming a low-cost operator C) Constructing and operating "formula" facilities at many different locations D) Focusing on a limited geographic area E) All of the above can be promising options.

E) All of the above can be promising options.

Commonly encountered market conditions that must be considered when choosing among strategic options include: A) Rapidly growing markets. B) Mature, slow-growth markets. C) Stagnant or declining industries. D) Fragmented markets comprised of a large number of relatively small sellers. E) All of the above.

E) All of the above.

Once a company has decided to employ a particular generic competitive strategy, then it must make such additional strategic choices as A) whether to enter into strategic alliances or collaborative partnerships. B) which value chain activities, if any, should be outsourced. C) whether to bolster the company's market position via merger or acquisitions. D) whether to integrate forward or backward into more stages of the industry value chain. E) All of the above.

E) All of the above.

Relying on outsiders to perform certain value chain activities offers such strategic advantages as A) obtaining higher quality and/or cheaper components or services. B) improving the company's ability to innovate by allying with "best-in-world" suppliers. C) reducing the company's risk exposure to changing technology and/or changing buyer preferences. D) increasing the firm's ability to assemble diverse kinds of expertise speedily and efficiently. E) All of the above.

E) All of the above.

Being first to initiate a particular strategic move can have a high payoff when A) pioneering helps build up a firm's image and reputation with buyers. B) first-time buyers remain strongly loyal to pioneering firms in making repeat purchases. C) moving first can result in a cost advantage over rivals. D) moving first can constitute a preemptive strike, making imitation extra hard or unlikely. E) All of these.

E) All of these.

First-mover disadvantages (or late-mover advantage) arise when A) the costs of pioneering are much higher than being a follower and only negligible learning/experience curve benefits accrue to the pioneer. B) rapid market evolution gives fast-followers an opening to leapfrog the pioneer with next-generation products of their own. C) the pioneer's products are somewhat primitive and do not live up to buyer expectations, allowing clever followers to win disenchanted buyers with better-performing products. D) the marketplace is skeptical about the benefits of a new technology or product being pioneered by a first-mover. E) All of these.

E) All of these.

Outsourcing the performance of value chain activities presently performed in-house to outside vendors and suppliers makes strategic sense when A) an activity can be performed better or more cheaply by outside specialists. B) it allows a company to focus its entire energies on those activities that are at the center of its expertise (its core competencies) and that are most critical to its competitive and financial success. C) outsourcing won't adversely hollow out the company's technical know-how, competencies, or capabilities. D) it reduces the company's risk exposure to changing technology and/or changing buyer preferences. E) All of these.

E) All of these.

The strategic moves and initiatives that seem to offer the best payoff in turbulent, fast-changing markets include A) developing quick response capability. B) keeping the company's products fresh and exciting enough to stand out in the midst of all the change that is taking place. C) investing aggressively in R&D to stay on the leading edge of technological know-how. D) initiating fresh actions every few months, not just when a competitive response is needed. E) All of these.

E) All of these.

Which one of the following is not one of the strategy elements that companies in emerging industries are likely to consider incorporating into their strategy? A) Pursuing new customer groups, new user applications, and entry into new geographical areas (perhaps using strategic partnerships or joint ventures if financial resources are constrained) B) Forming strategic alliances and partnerships with key suppliers and/or other companies having complementary technology or expertise C) Pushing hard to perfect the technology, improve product quality, and develop additional attractive performance features D) As technological uncertainty clears and a dominant technology emerges, trying to capture any first- mover advantages by adopting it quickly E) Being aggressive in cutting prices below key rivals and establishing a reputation of being the low-price leader

E) Being aggressive in cutting prices below key rivals and establishing a reputation of being the low-price leader

Which of the following is not a factor that makes an alliance "strategic" as opposed to just a convenient business arrangement? A) The alliance is critical to the company's achievement of an important objective. B) The alliance helps block a competitive threat. C) The alliance helps open up important new market opportunities. D) The alliance helps build, enhance, or sustain a core competence or competitive advantage. E) The alliance helps the company obtain additional financing on better credit terms.

E) The alliance helps the company obtain additional financing on better credit terms.

Competitive success in fast-changing markets tends to hinge on a company's ability to A) be the first-mover in reacting and responding to change. B) be more adept than rivals in employing offensive strategies of one kind or another. C) develop a distinctive competence in anticipating change. D) stay on the cutting-edge of technological change. E) improvise, experiment, adapt, reinvent, and regenerate as market and competitive conditions shift rapidly and sometimes unpredictably.

E) improvise, experiment, adapt, reinvent, and regenerate as market and competitive conditions shift

In a maturing industry, slackening growth rates tend to alter the competitive environment in such ways as A) weakening competitive rivalry and dampening the forces of multinational or global competition. B) boosting industry profitability and spurring buyer excitement about the product. C) increasing the number of competitors and reducing the number of mergers and acquisitions among competing firms. D) lowering the emphasis on cost control and reducing price competition among rivals. E) increased buyer sophistication, more head-to-head competition for market share, increased difficulty in coming up with new product features, and sustaining buyer excitement.

E) increased buyer sophistication, more head-to-head competition for market share, increased difficulty

Out sourcing strategies A) are nearly always a more attractive strategic option than merger and acquisition strategies. B) carry the substantial risk of raising a company's costs. C) carry the substantial risk of making a company overly dependent on its suppliers. D) increase a company's risk exposure to changing technology and/or changing buyer preferences. E) involve farming out value chain activities presently performed in-house to outside specialists and strategic allies.

E) involve farming out value chain activities presently performed in-house to outside specialists and

A company that decides to stick with a stagnant or declining industry A) is doomed to have declining revenues and profits. B) may still be successful if it aggressively expands into the markets of more and more foreign countries using a global differentiation strategy. C) may have a promising future if it is the industry's low-cost leader and has deep financial pockets to withstand bitter price wars and lots of industry-wide overcapacity. D) is well-advised to revamp its value chain to achieve strong product differentiation. E) may be able to grow and prosper if market demand decays very slowly and it has the competitive capabilities to take market share away from weaker competitors.

E) may be able to grow and prosper if market demand decays very slowly and it has the competitive

The standout competitive characteristic or feature of a fragmented industry is A) an unusually large number of different market segments and buyer groups. B) a market situation where demand for the product is scattered over many different country markets. C) an exceptionally large number of models, styles, and product varieties being produced and marketed by industry members. D) the demand side of the market is populated by millions of buyers, no one of which buys in large volume quantities. E) the absence of market leaders with king-sized market shares and widespread buyer recognition.

E) the absence of market leaders with king-sized market shares and widespread buyer recognition.

Because when to make a strategic move can be just as important as what move to make, a company's best option with respect to timing is A) to be the first mover. B) to be a fast follower. C) to be a late mover (because it is cheaper and easier to imitate the successful moves of the leaders and moving late allows a company to avoid the mistakes and costs associated with trying to be a pioneer- first-mover disadvantages usually overwhelm first-mover advantages). D) to be the last-mover—playing catch-up is usually fairly easily and nearly always much cheaper than any other option. E) to carefully weigh the first-mover advantages against the first-mover disadvantages and act accordingly.

E) to carefully weigh the first-mover advantages against the first-mover disadvantages and act accordingly.