Assignment:
Quiz Week 2 (Chapters 3 & 4)
1.
A company’s cost competitiveness is largely a function of
how efficiently it manages its internally performed value
chain activities and the costs in the value chains of its suppliers and forward
channel allies.
whether it possesses more core competencies and competitive
capabilities than rivals.
how closely its internally performed activities are linked
to the activities performed by suppliers and to the activities performed by
forward channel allies.
whether it does a good enough job of benchmarking its value
chain activities against the value chains of competitors so that it knows
exactly how low to drive its costs to be cost-competitive.
whether it does a better job of building its resource
strengths more cost effectively than rivals.
2.
Based on both the chapter discussion and the summary in
Figure 3.4, competitive pressures stemming from substitute products are weaker
when
a number of customers buy in large volumes and are in a
strong bargaining position to win concessions from sellers.
buyer loyalty to the products they are currently purchasing
is relatively low.
the industry consists of a relatively large number of rival
sellers that are fairly equal in size and competitive capability.
entry barriers are moderately high but by no means
prohibitive, and there is a fairly small pool of entry candidates.
substitutes are higher-priced, buyers don’t believe
substitute products have equal or better features, and buyers’ costs of
switching to substitutes are relatively high.
3.
Which of the following statements is false?
A dynamic capability is the ability to modify, deepen, or
reconfigure the company’s existing resources and capabilities in response to
changes in the environment or market.
None of these.
Managers must look toward correcting competitive weaknesses
that make the company vulnerable, dampen profitability, or disqualify it from
pursuing an attractive opportunity.
A company’s internal strengths should always serve as the
basis for its strategy.
Managers need to keep close track of how cost effectively
the company can deliver value to customers relative to its competitors.
4.
A company that is at a disadvantage in the marketplace
because it lacks competitively valuable resources possessed by rivals
should adopt a new competitive strategy that might better
match the circumstances of the marketplace.
should undertake efforts to develop a distinctive
competence.
is virtually blocked from using offensive strategies and
must rely on defensive strategies.
nearly always is relegated to a trailing position in the
industry.
should abandon strategy elements that have caused its
weakness in the marketplace.
5.
Factors that weaken rivalry among competing sellers include
slow growth in buyer demand.
standardized or else weakly differentiated products among
rival sellers.
the presence of one or more rivals that are dissatisfied
with their current position and market share.
low buyer switching costs.
rapid growth in buyer demand, high buyer costs to switch
brands, and so many industry rivals that any one company’s actions have little
impact on the businesses of its rivals.
6.
Options for attacking the high costs of items purchased from
suppliers do not include
integrating backward into the business of high-cost
suppliers and making the item in-house so as to better control the cost.
pressuring suppliers for more favorable prices.
raising prices to customers (so as to cover the high costs).
collaborating closely with suppliers to identify mutual
cost-saving opportunities.
switching to lower-priced substitute inputs.
7.
Strategic actions to reduce the costs of internally
performed value chain activities and improve a company’s cost competitiveness
are likely to be most effective when they are aimed at
lowering the costs of the value chain activities that a company performs
internally.
can aim at lowering costs (1) in the suppliers’ part of the
industry value chain, (2) in a company’s own internally performed activities,
and/or (3) in the forward channel portion of the value chain.
are most likely to be successful when they involve efforts
to concentrate more company resources and talents on those value chain
activities in which the company already has the lowest costs.
work best when aimed at increasing the amount of the
company’s low-cost competitive assets and decreasing the amount of its
high-cost competitive assets.
work best when they aim at lowering the costs of performing
those tasks and activities where the company has core competencies and
distinctive competencies.
8.
Which of the following is not a relevant factor in
conducting a PESTEL analysis?
interest rates, exchange rates, unemployment rates,
inflation rates, and economic growth
how frequently sellers alter their prices, how sensitive
buyers are to price differences among sellers, whether an item being purchased
is a good or a service, and whether buyers purchase frequently or infrequently
cultural, lifestyle, and demographic changes
weather, climate change, and water shortages
the birth of new industries, new knowledge, and disruptive
technologies
9.
The task of driving forces analysis is to
collectively (1) identify the driving forces, (2) assess
whether the drivers of change are acting individually or in concert to make the
industry more or less attractive, and (3) determine what strategy changes are
needed to prepare for the impact of the driving forces.
determine which of the five competitive forces is the
biggest driver of industry change.
identify which companies are being driven to move from one
strategic group to another strategic group.
predict what new forces of competitive and market change
will emerge next.
identify all the underlying factors that can cause industry
profitability to rise or fall in the years ahead.
10.
A strategic group map is a helpful analytical tool for
determining who competes most closely with whom; evaluating
whether industry driving forces and competitive pressures favor some strategic
groups and hurt others; and ascertaining whether the profit potential of
different strategic groups varies due to the strengths and weaknesses in each
group’s respective market positions.
determining which companies have how big a competitive
advantage and how good their prospects are for increasing their market shares.
determining which company is the most profitable in the
industry and why it is doing so well.
assessing why competitive pressures and driving forces
usually impact the biggest strategic groups more so than the smaller groups.
pinpointing which of the five competitive forces is the
strongest and which is the weakest.
11.
According to both the text discussion and the summary in
Figure 3.7, which of the following is not among the factors that determine
whether competitive rivalry among industry members is strong, moderate, or
weak?
whether customers’ costs to switch brands are low or high
whether there are few or many rival sellers, and whether
there are big differences in their sizes and competitive capabilities
how active industry rivals are in initiating fresh
competitive moves and in using the various weapons of competition to improve
their market standing and business performance
whether industry members are vertically integrated and
whether the industry is characterized by significant scale economies and rapid
technological change
whether buyer demand for the product is growing rapidly or
slowly
12.
In a company’s broader macro-environment, which of the
following have strategic significance?
the threat of additional entry into the industry and what
the industry’s key success factors are
market size and growth rate, the number of buyers, the scope
of competitive rivalry, the number of rivals, demand-supply conditions, product
innovation, the presence of scale economies and/or learning or experience curve
effects, and the pace of technological change
the strength of competitive pressures from producers of
substitute products and which competitors are in which strategic groups
general economic conditions, societal values and cultural
norms, political and legal/regulatory factors, technological factors, and
ecological considerations
the extent and importance of seller-supplier collaborative
partnerships, the extent and importance of seller-buyer collaborative
partnerships, and the bargaining leverage of sellers and buyers
13.
The procedure for constructing a strategic group map
involves
selecting variables for the map’s axes that are highly
correlated.
Two of the answers are correct: identifying the competitive
characteristics that differentiate firms’ market positions and competitive
approaches; and plotting the firms on a two-variable or two-dimensional map,
drawing circles around those firms occupying about the same strategy space, and
making the size of the circles for each strategic group proportional to the size
of its members’ share of total industry sales revenues.
identifying the competitive characteristics that
differentiate firms’ market positions and competitive approaches.
using only variables for the map’s axes that are
quantitative in nature (qualitative measures of market positions and
competitive approaches are too subjective and unreliable).
plotting the firms on a two-variable or two-dimensional map,
drawing circles around those firms occupying about the same strategy space, and
making the size of the circles for each strategic group proportional to the
size of its members’ share of total industry sales revenues.
14.
Which of the following is not an example of an external
threat to a company’s future business prospects (see Table 4.2)?
vulnerability to unfavorable industry driving forces and
adverse demographic changes that are likely to curtail demand for the
industry’s product
growing bargaining power on the part of customers and/or
suppliers
shifts in buyer needs and preferences away from using the
industry’s product
weaker brand image and a smaller network of retailer dealers
than rivals have
increasing intensity of competition among industry rivals
and costly new regulatory requirements
15.
The rivalry among competing sellers in an industry
intensifies
when buyer demand for the product is growing rapidly.
as the number of rivals increases and as they become more
equal in size and competitive capability.
when the products of rival sellers are highly differentiated
products and the industry consists of so many rivals that any one company’s
actions have little direct impact on rivals’ business.
when buyer demand is strong and sellers have little or no
excess capacity and only minimal inventories.
when customers are brand loyal and their costs to switch to
competing brands or substitute products are relatively high.
16.
A company’s value chain consists of
those activities a company performs that represent
“best practices.”
the collection of activities it performs in the course of
designing, producing, marketing, delivering, and supporting its product or
service.
the activities that a company performs in developing a
distinctive competence.
the activities a company performs in converting its resource
weaknesses into resource strengths.
the activities that represent a company’s competencies, core
competencies, distinctive competencies, and competitive capabilities.
17.
The industry or market opportunities that are most relevant
to a company and those that its strategy should aim at capturing include
opportunities
that offer important avenues for growth.
that the company has the financial resources to pursue.
All of the these choices are correct.
that are well-matched to the company’s competitive
capabilities and resource strengths.
where the company has the greatest potential for competitive
advantage.
18.
Which one of the following is not something that can be
learned from doing a competitive strength assessment?
whether a company has a net competitive advantage or a net
competitive disadvantage relative to key rivals (as indicated by the
differences among the companies’ competitive strength scores)
which rival company is competitively weakest and the areas
where it is most vulnerable to competitive attack
identifying the competitive factors where a company is strongest
and weakest vis-à-vis key rivals and the kinds of offensive/defensive actions
the company can use to exploit its competitive strengths and reduce its
competitive vulnerabilities
the extent to which a company’s customer value proposition
is superior to its rivals’
which of the rated companies is competitively strongest and
what magnitude competitive advantage it enjoys
19.
Every organization has many resources, capabilities, and
routines; however, those few things the company does really well and are
performed with a very high proficiency are termed
distinct capabilities.
distributive factors.
sustainable activities.
socially complex activities.
core competencies.
20.
Evaluating a company’s resources, capabilities, and
competitive strength relative to its rivals using VRIN tests does not include
developing answers to which one of the following questions?
Is the resource or capability competitively valuable?
Is the resource or capability inimitable or hard to copy?
Is the resource or capability rare?
How good is the company’s value chain?
Is the resource or capability nonsubstitutable, or is it vulnerable
to the threat of substitution from different types of resources and
capabilities?
