Strategic Management - Chapter 6

Which of the following are examples of outsourcing?

A company contracts with an outside payroll vendor to handle their payroll function. A company uses an outside information technology firm to manage its IT infrastructure. A company contracts with an overseas plant to assemble and package its product.

Which of the following is not an example of vertical integration?

A manufacturer ceases manufacturing their own components and instead contracts with another manufacturer to make and supply the components.

Which of these is/are examples of defensive strategies that can be carried out by a company?

Grant volume discounts to distributors to discourage them from using other suppliers. Introduce new features or otherwise expand on existing products or brands. Maintain low-priced options to defend against low-price attacks by competitors.

Under which of the following market conditions should a company avoid investing heavily in a first-mover strategy?

It is expensive, difficult, or otherwise inconvenient for buyers to adopt a new product or technology,

Which of the following is not true regarding defensive strategies?

They usually help enhance a firm's competitive advantage.

True or false: Strategists should consider how quickly they expect a product or technology to become popular when deciding whether to pursue a first-mover advantage.

True

A late-mover strategy may be advantageous when

a late-mover can enter the market with lower costs than the first mover. consumer needs evolve away from an existing product. potential buyers are skeptical about the new product offered by the first-mover.

When one company purchases another company and absorbs its operations, it is participating in a(n)

acquisition.

Tiger Electronics' research and development team has produced a working prototype of a virtual reality headset that could be ready for market many months ahead of their closest competitor. Tiger's marketing research team, however, reports that consumers are skeptical about virtual reality, even though they are excited about its possible applications. In this case, Tiger would be wise to

allow its competitor to be the first mover, and quickly redesign the headset according to consumer reactions before releasing it to the market.

In terms of business strategy, a blue ocean is

an untapped market space or industry opportunity.

A ______ strategy involves identifying and targeting a new and distinctive market segment rather than competing in established market spaces.

blue ocean

Being a first mover is strategically important because

it leads firms to identify the correct marketing mix to gain a significant share in a new market.

An independent entity that is jointly owned by two or more businesses is known as a(n)

joint venture.

Which of the following is not a good target for an offensive attack?

market leaders with strong profitability and solid market share

When two company's mutually agree to become a single corporate entity, they are participating in a(n)

merger

Attacking the competitive weaknesses of rivals, adopting and improving on the good ideas of other companies, and deliberately attacking market segments where rivals make a huge profit, are examples of

offensive strategies.

Challenging a firm that is on the verge of failure is an example of a(n)

offensive strategy.

Hiring outside vendors to perform important value chain activities is known as

outsourcing.

Which of the following is not an example of a strategic offensive?

publicly committing to matching competitors' prices

A first-mover strategy

requires the first-mover to also be a fast learner.

Publicly announcing commitment to maintain the company's current market share, publicly committing the company to a policy of matching competitors' prices, and maintaining a war chest of cash and marketable securities are examples of

signaling challengers that strong retaliation is likely in the event of an attack.

A(n) ______ is a collaborative relationship between two separately owned companies in which resources, risk, and operational control are shared.

strategic alliance

A company's vertical scope refers to

the extent to which the company participates in the industry value chain, from raw material extraction to end-user sales.

When two companies combine via a merger, their resource and competitive capabilities are _____ if they had combined via an acquisition.

the same as

A company's horizontal scope refers to

the various product and services that it offers.

What is/are the goals of signaling competitors that strong retaliation is likely in the event of an attack?

to convince challengers to pursue other strategic options to let competitors know that a challenge will not be profitable to prevent challenges from competitors

Which of the following involves expanding a company's involvement in industry value chain activities?

vertical integration