Chapter 5 - T/F
A firm can predict that a competitor whose products suffer from poor quality is likely to be less aggressive in its competitive actions until those quality problems are corrected. a. True b. False
a. True
A strategy's success is determined not only by the firm's initial competitive actions but also by how well it anticipates competitors' responses to them and by how well the firm anticipates and responds to its competitors initial actions. a. True b. False
a. True
An organization with high profitability, such as Walmart, will be able to develop high organizational slack. a. True b. False
a. True
Awareness tends to be greatest when firms have highly similar resources and compete in multiple markets. a. True b. False
a. True
Carl has just graduated with a management degree. He has a good understanding of his personal strengths and weaknesses and knows he would fit best in a stable organizational environment. In his job search, Carl should target firms in slow-cycle markets. a. True b. False
a. True
Coca Cola and PepsiCo compete across a number of products (e.g., soft drinks, bottled water) and geographic markets (U.S. and foreign markets) indicating that both companies have market commonality. a. True b. False
a. True
Competitive rivalry is the set of competitive actions and responses that occur among firms as they maneuver for an advantageous market position. a. True b. False
a. True
Disney is an example of a firm in a slow-cycle market because its animated characters are shielded from imitation by copyrights and trademarks. a. True b. False
a. True
Fast-cycle markets are characterized by "generational products"; which start out with a substantial technological advance in the performance of a product category followed by incremental technological advances as new generations of products are introduced. a. True b. False
a. True
Firms operating in the same market, offering similar products and targeting similar customers are competitors. a. True b. False
a. True
Firms that are typically late movers usually have little organizational slack. a. True b. False
a. True
Firms with high market commonality and highly similar resources are direct and mutually acknowledged competitors. a. True b. False
a. True
In general, strategic actions elicit fewer competitive responses than do tactical actions. a. True b. False
a. True
It is more likely that locally owned, one-location cafes in a small town will respond more rapidly to tactical actions by each other than they will to strategic actions by the Burger King franchise that has recently moved to their town. a. True b. False
a. True
Large firms with significant slack resources (i.e., are able to launch a greater number of competitive actions) but who remain flexible and act like small firms (i.e., are able to launch a variety of actions) will be more successful against rivals. a. True b. False
a. True
Market commonality is concerned with the number of markets with which the firm and a competitor are jointly involved and the degree of importance of the individual markets to each. a. True b. False
a. True
Mighty Mike's, a manufacturer of power tools for the home hobbyist, has seen its main competitor, MyTools, bring out a line of power tools that are smaller sized, lighter weight, and suitable for women and older hobbyists who have weaker hands than the typical male workshop hobbyist. Mighty Mike is waiting to see whether MyTool's new line is a success. Mighty Mike could be classified as a second mover. a. True b. False
a. True
Patent laws and regulatory requirements such as required FDA (Food and Drug Administration) approval to launch new products shield pharmaceutical companies; positions in this slow-cycle market. a. True b. False
a. True
Research suggests that a firm with greater multimarket contact is less likely to initiate an attack, but more likely to respond aggressively when attacked. a. True b. False
a. True
The more dependent a firm is on its market, the more aggressively it will defend it from another competitor. a. True b. False
a. True
The satellite dish at Faye's weekend home has malfunctioned. When she calls to have the dish repaired, the service representative tells her that the dish is obsolete and that parts for it are no longer made. Faye must replace the old dish with a new dish. This is an example of lack of firm loyalty to a product in a fast-cycle market. a. True b. False
a. True
To be a first mover, the firm must have readily available resources to invest in R&D as well as to rapidly and successfully produce and market a stream of innovative products. a. True b. False
a. True
Two firms, such as Fed Ex and UPS that have similar resources and common markets would be direct and mutually acknowledged competitors. a. True b. False
a. True
"Competitive dynamics"; indicates that firms and their strategic actions are independent. a. True b. Falses
b. False
A firm with a reputation as a price predator (an actor that frequently reduces prices to gain or maintain market share) generates few responses to its pricing tactical actions. a. True b. False
b. False
A tactical competitive action involves a significant commitment of specific and distinctive organizational resources. a. True b. False
b. False
Bayou Belle Water markets water drawn only from a single artesian well in Southern Louisiana. It has a loyal following in its region. Since Bayou Belle markets the water, just as Coca-Cola, Nestle, and PepsiCo do, Bayou Belle has high resource similarity with these international firms. a. True b. False
b. False
Boeing's decision to commit the resources required to build the super-efficient 787 midsized jetliner is an example of a tactical action. a. True b. False
b. False
Competitive rivalry is the contest to be the first mover in an international market. a. True b. False
b. False
Even if the effects of a competitor's strategic action on the focal firm are significant (e.g., loss of market share), little response is likely from that firm. a. True b. False
b. False
Extensive market commonality guarantees intense competition in an industry. a. True b. False
b. False
Firms are likely to imitate the actions of a competitor that is noted for risky, complex, and unpredictable behavior because this is a way to imitate unobservable core competencies. a. True b. False
b. False
First movers can gain a sustained competitive advantage when they reduce their costs through reverse engineering. a. True b. False
b. False
Quality begins at the bottom of the organization where employees must create values for quality that permeate the entire organization. a. True b. False
b. False
The need for quality products and services is so high that quality alone can assure a firm that it will achieve strategic competitiveness and earn above-average returns. a. True b. False
b. False
Two firms, such as a small local, family-owned Italian restaurant and Olive Garden share few markets and have little similarity in resources, but are nonetheless direct and mutually acknowledged competitors. a. True b. False
b. False
Under the framework of competitive action and response, "ability"; refers to an attacking or responding firm's knowledge of the competitive market characteristics. a. True b. False
b. False
Unlike fast-cycle markets, the struggle for market share in standard-cycle markets is moderate. a. True b. False
b. False
Walmart has recently opened a store in Alsatia, Missouri. Several local small retailers have decided that choosing not to respond to Walmart's competitive actions is a viable long-term option because although the companies have high market commonality they have little resource similarity. These small retailers are correct in their decision. a. True b. False
b. False
Walmart's aggressive pricing strategy is a strategic action that plays a major role in how it competes. a. True b. False
b. False
