Chapter 4
Rivals can be preemptive from entering a firms markets
A and B
Singapore Airlines appears to have competitive advantages from:
All of the above
A typical cost leadership strategy involves:
Answers a and b
Cost leaders are frequently:
B and C
The fundamental choice for capability acquisitions is the decision to either:
Buy them or build them
When using value chain analysis to analyse a firm's competitive strategy, the main aim is to:
Compare costs with those of competitors
A firm's ability to turn change in its external environment into profit:
Depends on its ability to respond by changing its capabilities appropriately
A firm has a differentiation advantage when it offers many product features that distinguish its product from everyone else's.
False
One firm possesses a competitive advantage over other firms when it earns or has the potential to earn a persistently higher profit margin.
False
Overall, the Singapore Airlines case shows that:
Firms can create cultures that do motivate staff to continually eliminate waste, reduce costs and improve customer service
If an industry has a stable environment and firms pursue similar strategies:
Firms with similar resources and capabilities should have similar profit rates
In many industries the market leaders
Manage to reconcile low costs with some effective differentiation
"Strategic innovation" involves:
Pioneering in at least one of the three dimensions: new industry, new customer segment, or new source of competitive advantage
The success of Japanese Total Quality Management:
Refutes the perceived trade-off between low cost products and high quality products
a cost leadership strategy
Requires a firm to produce a "no frills" product - even if the industry's product is differentiable (e.g. cars or airlines)
A firm with a competitive advantage that is not manifest in higher profitability may have?
Some or All of the above
"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.
True
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.
True
Firms can achieve competitive advantage by supplying a product at lower cost than competitors or by effectively differentiating their product so that the customer is willing to pay a higher price.
True
competitive advantage can be defined as
a firms ability to earn a persistently higher profit rate than rivals
according to porter and siggelkow, urban outfitters was successful because
all of the above
causal ambiguity and uncertainty imitability are
all of the above
the objective of differentiation is to yield cost savings for the firm
false
Competitive advantage depends on:
the existence of market imperfections
Entrepreneurship can be defined as the ability to identify and rapidly respond to opportunities in the environment
true
Isolating mechanisms are forces tending to equalize profit rates among firms, i.e. phenomena that erode a firm's competitive advantages.
False
For some firms, speed of new product development appears to be the only real source of competitive advantage in today's economy.
True
If scale economies are a key cost driver, increasing sales volume provides an opportunity for cost reduction
True
In the airline industry where genuinely unique resources or capabilities are hard to find and imitation is fast, sustainable competitive advantage is hard to achieve and often depends on corporate culture.
True
In the long run competition eliminates differences in profitability between firms.
True
The extent to which external change creates competitive advantage depends on the magnitude of the change and the extent of firms' strategic differences.
True
Porter says that firms get stuck in the middle because
as a above and firms need very different organizational processes to achieve...
isolating mechanisms are
barriers that slow or stop the equalization of profits between firms such as barrier to imitation
competitive advantage
emerges from external and internal sources
A firm can preempt imitation by
introducing new product to fill each niche investing in capacity ahead of market growth, filing patents
The value chain analysis of Singapore Airlines, illustrated in Case Insight 4.3, is :
is a reasonable start on analysis but now needs to be followed up with hard figures of cost comparisons between SA and its rivals
Porter (1980) in his early work suggests that combining cost leadership and differentiation strategies:
is likely to result in a firm becoming 'stuck in the middle'
it is easy for sears holdings, Kmart, to understand walmarts comp adv
no, its not that easy
differentiation is when a firm
offers customers something valuable and unique for which customers are willing to pay a price premium
requirements for quick organizational response to a turbulent environment are
quick, accurate information, short product launch cycle time
once established competitive advantage is
subject to erosion by competitors or entrants
firms can achieve competitive advantage by supplying product at lower cost than competitors
true