MAR4802- Lesson 18: Creating Competitive Advantage

A firm should compete with ________ competitors in order to sharpen its abilities. Succeeding against these competitors often provides greater returns. A) strong B) international C) weak D) distant E) smaller

A

According to the Blue Ocean Strategy, the only way to beat the competition is: A) To stop trying to beat the competition B) To select either a cost leadership, differentiation, or focus position C) Avoid the Holy Grail of customer service D) Innovate, innovate, and innovate E) Add value

A

Each competitor has a mix of objectives. The company wants to know the relative importance that a competitor places on all of the following EXCEPT A) company history B) current profitability C) market share growth D) cash flow E) technological leadership

A

Gaining _______ requires delivering more value and satisfaction to target consumers than competitors do. A) competitive advantage B) first-mover advantage C) economies of scale D) comparative advantage E) differentiation

A

In conducting, _______ the company first identifies the major attributes that customers value and the importance customers place on these attributes. Next, it assesses its performance against competitors on those valued attributes. A) a customer value analysis B) benchmarking C) entrepreneurial marketing D) intrepreneurial marketing E) a customer lifetime estimate

A

The art and science of choosing target markets and building profitable relationships with them is called A) marketing management B) positioning C) segmentation D) selling E) societal marketing

A

The proper sequence of Blue Ocean Strategy is: A) Buyer utility, price, cost, adoption B) Buyer utility, cost, price, adoption C) BUWBEP, cost, price, adoption, hurdle rate D) None of the above E) There is no PROPER sequence

A

Customer-centered company

A company that focuses on customer developments in designing its marketing strategies and delivering superior value to its target customers.

Market-centered company

A company that pays balanced attention to both customers and competitors in designing its marketing strategies.

Competitor-centered company

A company whose moves are mainly based on competitors' actions and reactions.

Market nicher

A firm that serves small segments that the other firms in an industry overlook or ignore.

Strategic group

A group of firms in an industry following the same or a similar strategy.

Market follower

A runner-up firm that wants to hold its share in an industry without rocking the boat.

Customer value analysis

An analysis conducted to determine what benefits target customers value and how they rate the relative value of various competitors' offers.

Formulated marketing

As small companies achieve success, they inevitably move toward more-formulated marketing. They develop formal marketing strategies and adhere to them closely.

A company that pursues _______ will react much more strongly to a competitor's cost reducing manufacturing breakthrough than to the same competitor's advertising increase. A) product differentiation B) low-cost leadership C) customer intimacy D) a middle-of-the-roaders strategy E) product leadership

B

From an industry point of view, Universal Pictures film studio might see its competition as A) West End theatre B) Columbia Pictures C) Tomorrowland D) Summerfest E) HarperCollins

B

In the context of identifying competitors strategies, the more that one firm's strategy resembles another firms strategy, the more likely the two firms are to ______ A) merge B) compete C) globalize D) form a partnership E) become market leaders

B

Most companies will compete with _______ rather than __________ A) distant competitors; close competitors B) close competitors; distant competitors C) benchmarkers; distant competitors D) market challengers; market followers

B

Nintendo, producer of the Wii video game console, might define its competitors as other makers of physically interactive video games. But from a(n) _________ point of view, it would include all firms making physically interactive recreational products. A) industry B) market C) segment D) niche E) interdependent

B

There is no Blue Ocean potential unless you can answer the following two questions in the affirmative. A) Do we park the offering or rethink it? B) Does the offering unlock exceptional utility; is there a compelling reason for the mass of people to buy it? C) Are there adoption hurdles and potential resistance to the idea from retailers? D) Do we have barriers to entry and patent protection of our offering? E) Is this a true competitive strategy and are there true advantages in cost leadership?

B

Rather than competing head to head with established competitors, many companies seek out unoccupied positions in uncontested market spaces. By aiming to create products and services for which there are no direct competitors, the goal of ________ is to make competition irrelevant.

Blue-ocean Strategy

. A company that focuses on customer developments in designing its marketing strategies and delivering superior value to its target customers is known as a: A) Company that has elected to compete on the basis of Focus B) Company that has elected to compete on the basis of cost leadership C) Customer-centered company D) Market-oriented company E) Company that has marketing myopia

C

A close competitor is one: A) That resides in your neighborhood, city, or Zip Code area B) That shares a similar UPC Code C) That resembles your firm the most D) That resembles your SKU E) All of the above

C

An industry often contains "good" and "bad" competitors. Good competitors A) break the rules of fair competition B) ensure minimum competition between firms C) play by the rules of the industry D) typically dominate the market E) share their marketing strategies with other firms

C

Country Kitchen and Perkins are both a chain of family restaurants featuring diner-like menus with reasonably priced items. These companies are in the same A. focus group B. control group C. strategic group D. target group E. experimental group

C

For Hyundai Corporation, customers who care primarily about the price of a car and its operating economy make up one A) market position B) value network C) market segment D) customer extension E) value chain

C

Which of the following sentences best summarizes the differences between the red and blue oceans strategies? A) Red oceans are about avoiding head-to-head competition while blue oceans are about rivals fighting over a shrinking profit pool. B) Red oceans denote an environment where products are not yet well defined while blue oceans refer to the frequently accessed marketplaces where the products are well-defined, competitors are known and competition is based on price, product quality and service. C) In the red oceans, industry boundaries are defined and accepted and the competitive rules of the game are known. Blue oceans are occasionally created well beyond existing industry boundaries. D) Blue oceans are an old paradigm that represents all the industries in existence today while red oceans are those where companies beat competition by focusing on developing compelling value innovations that create uncontested marketspace. E) None of the above BEST summarizes the differences between red and blue ocean strategies.

C

Benchmarking

Comparing the company's products and processes to those of competitors or leading firms in other industries to identify best practices and find ways to improve quality and performance.

The video-rental superstore Blockbuster didn't go bankrupt at the hands of other traditional brick-and-mortar retailers. It fell victim first to unexpected competitors such as direct marketer Netflix and kiosk marketer Redbox, and then to a host of new digital video streaming services and technologies. Blockbuster's inability to recognize new sources of competition may be referred to as ________.

Competitor Myopia

One of the negatives associated with a ________ strategy is that a company may end up simply matching or extending industry practices rather than seeking innovative new ways to create more value for customers.

Competitor-Centered

34. In formulating, Blue Ocean Strategy, the main challenge in determining price is: A) Understanding the strategic cost B) Understanding focus C) Understanding the price sensitivities of those people who will be buying the product D) Understanding the price sensitivities of those people who will be comparing the new product with a host of very different looking products offered outside the group of traditional competitors E) b and c

D

A company that offers superior value by offering a continuous stream of leading-edge products, that aims to make its own products and those of the competitors obsolete is a: A) Company that focuses on customer intimacy B) Company that is myopic C) Company that focuses on effortless experience D) Company that focuses on product leadership E) None of the Above

D

Defining competitors as "companies that are trying to satisfy the same customer need or build relationships with the same customer group" is using​ a(n) __________ point of view. A. industry B. myopic C. product D. market E. competitive

D

In the BCG approach, _______ are high-share, high-growth businesses or products. They need heavy investment to finance rapid growth. When their growth slows down, they tum into _______ A) cash cows; stars B) question marks; dogs C) stars; question marks D) stars; cash cows E) dogs; cash cows

D

Kodak's film business didn't lose out to direct competitor Fujifilm; it lost out to Sony, Canon, and other digital camera makers, along with a host of digital image developers and online image sharing services. This is an example of A) a blue ocean strategy B) competitor backlinldng C) self-competition D) competitor myopia E) marketing myopia

D

Rather than competing head to head with established competitors, many companies seek out unoccupied positions in uncontested market spaces. They try to create products and services for which there are no direct competitors. This is called a A) horizontal integration approach B) commercialization process C) guerrilla marketing technique D) blue ocean strategy E) lean dynamics approach

D

The first step in initiating competitive marketing strategies is to A) balance customer and competitor orientations B) design broad competitive marketing strategies C) assess long-term organizational objectives D) conduct competitor analysis E) conduct transaction analysis

D

What is the LEAST relevant question to ask when assessing a firm's main competitor? A) What are the competitor's objectives? B) What is the competitor's strategy? C) What are the competitor's strengths? D) What are the competitor's locations? E) What are the competitor's weaknesses?

D

________ is the process of comparing the company's products and processes to those of competitors or leading firms in other industries to find ways to improve quality and performance, A) Segmenting B) Positioning C) Sales promotion D) Benchmarking E) Publicity

D

. How would you define "effortless experience" in the Buyer Utility Map? A) Removing the blocks to customer productivity at all six stages of the buyer's experience. B) Removing the blocks to simplicity at all six stages of the buyer's experience. C) Removing the blocks to environmental friendliness at all six stages of the buyer's experience, D) Removing the blocks to risk reduction at all six stages of the buyer's experience. E) All of the above

E

. Using the Price Corridor of the Mass format to set prices is an excellent method of: A) Identifying the three types of competitors for your product or service B) Identifying the number of buyers that each competitor attracts C) Determining the degree of legal and resource protection your product or service has D) Setting the pricing necessary to pull in an ocean of new demand E) All of the above

E

. Which of the following are likely competitor reactions to a price cut: A) Create a fighting brand B) Follow the price cut with one of their own C) Increase promotion D) Do nothing E) All of the above

E

. Which of the following is the most likely result of a middle-of-the-road strategy that attempts to serve all customers? A) All customers will be delighted. B) Michael Porter says this strategy will not succeed. C) Customer evangelists will become unpaid salespersons for the service or product. D) Few customers will be satisfied, E) B and D

E

33. Which of the following is/are not utility levers in the Buyers' Utility Map? A. Form B. Purchase C. Fun and imag D. Risk E. a and b

E

An example of a company exhibiting a blue ocean strategy is A) Amazon's online shopping convenience B) a Starbucks opening in the same vicinity of an independent coffee house C) Nike's brand image of the "swoosh" D) Whirlpool's full line of medium-priced, energy-saving appliances E) the first digital tablet iPad released by Apple

E

Bars and restaurants have few physical features in common with a circus. They also serve a distinct function by providing conversational and gastronomical fun and adventure, a very different experience from the visual entertainment a movie theater offers. These are competitors because: A) They are not competitors B) They share the same form and objective, C) They share the same function and objective D) They share the same goal of taking a share of the customer's wallet. E) They do not share the sale form and function, but people have the same objective in undertaking these three activities

E

Competition is most intense within: A) A strategic group B) A Red Ocean C) An industry group D) A market group E) a and b

E

From a market point of view, Universal Pictures film studio might see its competition as A) Paramount Pictures B) Warner Bros. Pictures C) Walt Disney Pictures D) 20th Century Fox E) Broadway

E

To reconstruct buyer value elements in crafting a new value curve, we complete: A) Michael Porter's Four Competitive Positions questions B) Tierchy and Waldrops Four decisions framework C) The Four Product/Market Growth Framework D) The BCG Framework E) None of the above

E

Value innovation, the cornerstone of Blue Ocean Strategy is the result of: A) the simultaneous pursuit of differentiation and low cost. B) driving costs down while driving differentiation up. C) reducing or eliminating some factors the industry has taken for granted, while raising or creating other factors the industry has ignored. D) driving down costs while driving value up E) all of the above

E

Which of the following are examples of close competitors? A) Applebee's and Subway B) Taco Bell and T.G.I. Friday's C) Pizza Hut and Burger King D) McDonald's and Taco Bell E) McDonalds and Burger King

E

Which of the following is/are true about Good versus Bad Competitors A) Good competitors play by the rules and increase total demand in the market B) Bad Competitors try to buy share, rather than earn it C) Bad competitors often create disruptive innovations D) Good competitors play by the rules E) All of the above

E

Which of the following statements about Blue Ocean Strategy is/are true? A) It pursues differentiation and low cost B) It maximizes opportunity while minimizing risk C) It creates uncontested market space D) It provides a step-by-step process E) all of the above are true statements about Blue Ocean Strategy

E

All companies choose one marketing strategy for their different businesses or products.

False

An example of competitor myopia was when Fujifilm sales unsuspectingly surpassed those of Kodak.

False

Apple's iTunes Music Store is a good competitor, one that plays by its own rules at the expense of the industry as a whole.

False

Approaches to marketing strategy and practice often pass through three stages: entrepreneurial marketing, formulated marketing, and strategic marketing.

False

Gary Hirshberg started the Stonyfield Farm yogurt company. His marketing strategy: building a strong connection with customers using guerrilla marketing. This is an example of formulated marketing.

False

In an effort to protect market share, Campbell's urges people to eat soup and other Campbell's products more often by running ads containing new recipes.

False

In fact, challengers seldom become market leaders by imitating and improving on the ideas of pioneering processors.

False

Most companies prefer to compete against strong competitors.

False

Most companies tend to compete with distant competitors, who are those competitors most unlike them, rather than with close competitors.

False

Niching carries no risks.

False

Service nichers sell only in a certain locality, region, or area of the world.

False

The goal of a "red ocean strategy" is to make competition irrelevant.

False

To plan effective marketing strategies, the company needs to find out all it can about its employees.

False

Differentiation

Here the company concentrates on creating a highly differentiated product line and marketing program so that it comes across as the class leader in the industry

Focus

Here the company focuses its effort on serving a few market segments well rather than going after the whole market.

Overall cost leadership

Here the company works hard to achieve the lowest production and distribution costs. Low costs let the company price lower than its competitors and win a large market share.

Intrapreneurial marketing

Many large and mature companies get stuck in formulated marketing. They pore over the latest Nielsen numbers, scan market research reports, and try to fine-tune their competitive strategies and programs

By focusing on the needs of small- and medium-sized businesses, often overlooked by larger players, ByGeorge Marketing & PR has achieved a small, but highly profitable market share in its region. This approach is known as a(n) ________ strategy.

Market Nicher

Although the market leader is able to gather dominant market shares, researchers have found that in many cases that later challengers are able to achieve profits by closely observing what the market leader successfully does and copying or improving upon it. This approach is known as a ________ strategy.

Market follower

Entrepreneurial marketing

Most companies are started by individuals who live by their wits. They visualize an opportunity, construct flexible strategies on the backs of envelopes, and knock on every door to gain attention.

Operational excellence

The company provides superior value by leading its industry in price and convenience. It works to reduce costs and create a lean and efficient value delivery system.

Product leadership

The company provides superior value by offering a continuous stream of leading-edge products or services. It aims to make its own and competing products obsolete.

Customer intimacy

The company provides superior value by precisely segmenting its markets and tailoring its products or services to exactly match the needs of targeted customers.

Market leader

The firm in an industry with the largest market share.

A company can become so competitor-centred that it loses its even more important focus on maintaining profitable customer relationships.

True

A company may want to avoid trying to "destroy" a close competitor.

True

A company really needs and benefits from competitors.

True

A company's profitability increases as a business gains share relative to competitors in its served market.

True

A competitive analysis involves first identifying and assessing competitors and then selecting which competitors to attack or avoid.

True

An strategic group is a group of firms in an industry following the same or a similar strategy in a given target market.

True

At the narrowest level, a company can define its competitors as other companies offering similar products and services to the same customers at similar prices.

True

Business-to-business marketers find it hard to estimate competitors' market shares because they do not have the same syndicated data services that are available to consumer packaged-goods companies.

True

By trying to be good at all of the value disciplines, a company usually ends up being best at none.

True

Companies can identify their competitors from both an industry and a market point of view.

True

FedEx is rare because it excels at more than one value discipline.

True

In the face of P&G's relentless assault, Unilever finally threw in the towel and recently put its detergents business up for sale.

True

Logitech has a depth of focus and knowledge that no other company in the world—including Microsoft—can match.

True

Many firms avoid direct competition with Procter & Gamble and look for easier prey, knowing that Procter & Gamble will react fiercely if challenged.

True

Many large and mature companies get stuck in formulated marketing. They pore over the latest Nielsen numbers, scan market research reports, and try to fine-tune their competitive strategies and programs.

True

Market leaders can grow by increasing their market shares further.

True

Not all runner-up companies want to challenge the market leader.

True

One reason companies really need competitors is because competitors may help increase total demand.

True

Small firms that can't afford a competitive intelligence system often resort to using "in-house" experts to study competitors.

True

Studies have shown that, on average, profitability rises with increasing market share.

True

The challenger must choose its opponents carefully and have a clearly defined and attainable objective.

True

The competitive intelligence system of a company supplies key information to relevant decision makers about the company's competitors.

True