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Exam 5: Competitive Rivalry and Competitive Dynamics

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Question 1

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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

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True

Question 2

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A tactical competitive action involves a significant commitment of specific and distinctive organizational resources.

A) True
B) False

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Question 3

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Sustained competitive advantage is most achievable in a ____ market.

Case Scenario 3: The Pet Food Industry. The pet food industry is comprised primarily of six market segments: dry dog food, dry cat food, moist dog food, moist cat food, canned dog food, and canned cat food. Five large firms dominate the market and each has some market share in all segments, and the leading share in at least one segment. The largest firm participates solely in the pet food industry, while the next four firms are actually subsidiaries of some of the world's largest food and consumer products companies. Top management of these larger firms have made public statements that suggest they each see themselves as future leaders of the pet food industry. All five have acquired comparable skills in terms of manufacturing and marketing. Two small firms also participate in the industry, but these players are relatively weak and compete in just two of the six segments; the pet food industry is the only industry in which they operate. Inputs to the industry are basic commodities and there is no real threat of substitute products except across segments and price points. The industry is growing slowly, barely keeping up with the rate of inflation. Barriers to entry are enormous when pet food companies can gain scale economies in production coupled with aggressive marketing, though even then these coordinated actions may only yield average industry profitability. Any firm can increase its market share only to the extent that another firm's share is decreased. -(Refer to Case Scenario 3) The pet food industry is best characterized as an example of

Traditionally, the music industry signed multi-year contracts with artists and sold copyright protected music through established distribution channels. A shift to the digital format and the rise of Internet technology has resulted in the sharing of music over peer-to-peer networks, a practice the industry called "piracy." In recent years, the music industry has seen a rapid decline in the number of CDs sold. At the same time, the ownership of the distribution rights of musical content under copyright laws remains clear. Attempts at innovation by individual record labels to offer music as direct downloads to consumer are quickly copied by other labels. Based on these factors, the best assessment is that the music industry has shifted from a ____ to a ____ cycle market.

Competitive dynamics refers to the

The benefits of being a first mover are most substantial in fast cycle markets.

The chief disadvantage of being a first mover is the

Multimarket competition occurs when firms

Because Coca-Cola, Nestle, and PepsiCo all sell a product (bottled water) that is essentially the same and all three giant companies are engaged in battles for market share using incremental changes in their products and seeking loyalty to brand names, it is most likely that the bottled water market is a(an)

Late movers are those firms that

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.

Which pair of firms has the LEAST resource similarity?

Which PC maker has historically benefited the most from its reputation?

____ and ____ describe the situation in which organizations are direct competitors and are fully aware of the competition.

On the whole there are more competitive responses to

Which industry can be LEAST described as a slow cycle market?

The drivers of competitive behavior are awareness of the competitor, motivation to take action or respond, and the organization's ability in terms of resources and flexibility.

Lawsuits over patent and copyright infringements are more common and intense in

Unlike fast-cycle markets, the struggle for market share in standard-cycle markets is moderate.