Once a company has decided to employ a particular generic competitive strategy, then it must make such additional strategic choices as
A. whether to focus on building competitive advantages. B. whether to employ the element of surprise as opposed to doing what rivals expect and are prepared for. C. whether to display a strong bias for swift, decisive, and overwhelming actions to overpowe
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?
Whether to employ a market share leadership strategy.
Strategic offensives should, as a general rule, be based on
exploiting a company's strongest strategic assets.
The principal offensive strategy options include which of the following?
A. Using a cost-based advantage to attack competitors on the basis of price or value. B. Using hit-and-run or guerrilla warfare tactics to grab sales and market share. C. Launching a preemptive strike to secure an advantageous position that rivals are pre
Which of the following is not a principal offensive strategy option?
Being the last competitor to market a next-generation product.
An offensive to yield good results can be short if
buyers respond immediately.
Which of the following rivals make the best targets for an offensive attack?
Firms that are weak in areas where challenger is strong.
Challenging a struggling rival can
A. sap its financial strength and competitive position. B. weaken the rivals resolve. C. accelerate the rivals exit from the market. D. threaten its overall survival in the market. E. All of these.
A blue ocean strategy
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.
Which of the following is a prime example of a blue-ocean market strategy?
eBay online auction industry B. Starbucks coffee shops C. Dollar General discount retailing D. FedEx overnight shipping E. All of these.
Which of the following is a purpose of a defensive strategy?
A. To lower the risk of being attacked. B. To weaken the impact of any attack that occurs. C. To pressure challengers to aim their efforts at other rivals. D. To help protect a competitive advantage. E. All of these.
Which of the following is NOT a purpose of a defensive strategy?
To increase the risk of having to defend an attack.
Which of the following ways are employed by defending companies to fend off a competitive attack?
A. Introduce new features, add new models, or broaden its product line. B. Grant volume discounts or better financing terms. C. Gain product line exclusivity to force competitors to use alternate distributors. D. Offer better training and support services
What is the goal of signaling a challenger that strong retaliation is likely in the event of an attack?
Divert the challenger to use less threatening options.
Which of the following signals can be given to challengers to warn that strong retaliation is likely?
A. Publicly announcing management's commitment to maintain market share. B. Publicly committing to a company policy of matching competitors' terms or pricing. C. Maintaining a war chest of cash and marketable securities. D. Making a strong counter respons
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
In which of the following instances is being a first-mover not particularly advantageous?
When markets are slow to accept the innovative product offering of a first-mover and fast followers possess
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
In which of the following cases are late-mover advantages (or first-mover disadvantages) not likely to arise?
When opportunities exist to invent a new industry or distinctive market segment that creates altogether new demand
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
to carefully weigh the first-mover advantages against the first-mover disadvantages and act accordingly
The race among rivals for industry leadership is more likely to be a marathon rather than a sprint when,
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.
What does the scope of the firm refer to?
The range of activities the firm performs internally and the breadth of its product offerings.
The range of product and service segments that the firm serves within its market is known as the firm's
The difference between a merger and an acquisition is that
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.
Which of the following is not a typical strategic objective or benefit that drives mergers and acquisitions?
To facilitate a company's shift from a broad differentiation strategy to a focused differentiation strategy
Mergers and acquisitions are often driven by such strategic objectives as to
expand a company's geographic coverage or extend its business into new product categories.
Merger and acquisition strategies
may offer considerable cost-saving opportunities and can also be beneficial in helping a company try to invent a new industry.
What outcomes do horizontal merger and acquisition strategies intend?
A. Expanding a company's geographic coverage. B. Gaining quick access to new technologies or complementary resources and capabilities. C. Leading the convergence of industries whose boundaries are being blurred by changing technologies and new market oppo
Mergers and acquisitions
frequently do not produce the hoped-for outcomes.
Vertical integration strategies
extend a company's competitive scope within the same industry by expanding its operations across more parts of the industry value chain.
The two best reasons for investing company resources in vertical integration (either forward or backward) are to
strengthen the company's competitive position and/or boost its profitability.
A good example of vertical integration is
a crude oil refiner purchasing a firm engaged in drilling and exploring for oil.
For backward vertical integration into the business of suppliers to be a viable and profitable strategy, a company
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.
Which of the following is not a potential advantage of backward vertical integration?
Reduced business risk because of controlling a bigger portion of the overall industry value chain
The strategic impetus for forward vertical integration is to
gain better access to end users and better market visibility.
Which of the following is typically the strategic impetus for forward vertical integration?
Gaining better access to end users and better market visibility
Which of the following is not a strategic disadvantage of vertical integration?
Vertical integration reduces the opportunity for achieving greater product differentiation.
involve farming out value chain activities presently performed in-house to outside specialists and strategic allies.
The two big drivers of outsourcing are
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).
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 compet
Which of the following is not one of the benefits of outsourcing value chain activities presently performed in-house?
Enables a company to gain better access to end users and better market visibility
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.
Outsourcing strategies can offer such advantages as
obtaining higher quality and/or cheaper components or services, improving a company's ability to innovate, and reducing its risk exposure.
The big risk of employing an outsourcing strategy is
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.
are collaborative arrangements where two or more companies join forces to achieve mutually beneficial strategic outcomes.
A strategic alliance
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.
Which of the following is not a factor that makes an alliance "strategic" as opposed to just a convenient business arrangement?
The alliance helps the company obtain additional financing on better credit terms.
Entering into strategic alliances and collaborative partnerships can be competitively valuable because
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.
The best strategic alliances
are highly selective, focusing on particular value chain activities and on obtaining a particular competitive benefit.
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?
To enable greater opportunities for employee advancement
Companies racing against rivals for global market leadership need strategic alliances and collaborative partnerships with companies in foreign countries to
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
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.
Which of the following is not one of the factors that affects whether a strategic alliance will be successful and realize its intended benefits?
Minimizing the amount of resources that the partners commit to the alliance
Which of the following is not a typical reason that many alliances prove unstable or break apart?
Disagreement over how to divide the profits gained from joint collaboration
Experience indicates that strategic alliances
can suffer culture clash and integration problems due to different management styles and business practices.
The Achilles heel (or biggest disadvantage/pitfall) of relying heavily on alliances and cooperative strategies is
becoming dependent on other companies for essential expertise and capabilities.
A company that has greater success in managing their strategic alliance can credit
A. establishing strong interpersonal relationships to facilitate communication. B. incorporating contractual safeguards. C. making opportunities for learning a routine management process. D. creating a system to manage alliances in a systematic fashion. E
A company that fails in managing their strategic alliance probably has not
A. incorporated contractual safeguards. B. made opportunities for learning a routine management process. C. created a system to manage alliances in a systematic fashion. D. established strong interpersonal relationships to facilitate communication E. All
Incorporating opportunities for organizational learning can
increase a company's knowledge assets and capabilities.