Exam 6: Strengthening a Companys Competitive Position: Strategic Moves, Timing, and Scope of Operations

A) a producer of organic vegetables deciding to expand into the production of organic fruits.
B) a supermarket chain acquiring a distributor of fresh fruits and vegetables.
C) a crude oil refiner purchasing a railroad company.
D) a hospital opening a nursing home for the aged.
E) a maker of prescription drugs acquiring a chain of hospitals.

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1. Increased market share: One of the ma...

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A) growth in demand that depends on the development of complementary products or services that are not currently available and new industry infrastructure that is needed before buyer demand can surge.
B) quick market penetration and strong loyalty among first-time customers.
C) buyer behavior that is readily attracted to new technology or product features.
D) conditions that make imitation difficult and absolute cost advantages that accrue to those who make early commitments to new technologies,components,or distribution channels.
E) All of these.

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A) To gain quick access to new technologies or other resources and capabilities
B) To create a more cost-efficient operation out of the combined companies
C) To fundamentally alter a company's trajectory and improve its business outlook
D) To expedite shifting from one strategy to another and gain better access to additional financial capital
E) To extend a company's business into new product categories and/or expand a company's geographic coverage

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A) When pioneering helps build a firm's image and reputation with buyers
B) When first-time customers remain strongly loyal to pioneering firms in making repeat purchases
C) When early commitments to new technologies,new-style components,new or emerging distribution channels,and so on can produce an absolute cost advantage over rivals
D) When moving first can constitute a preemptive strike,making imitation extra hard or unlikely
E) When pioneering leadership is more costly than followership

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A) Adopting or improving on good ideas of other companies (rivals or otherwise)
B) Deliberately attacking those market segments where key rivals make big profits
C) Launching a preemptive strike to capture a rare opportunity
D) Offering an equally good or better product at a lower price
E) Introducing new features or models to fill vacant niches in its overall product offering and better match the product offerings of key rivals

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A) are generally successful.
B) work well in cooperatively developing new technologies and new products but seldom work well in promoting greater supply chain efficiency.
C) work best when they are aimed at achieving a mutually beneficial competitive advantage for the allies.
D) stand a reasonable chance of helping a company reduce competitive disadvantage,but very rarely form the basis of a durable competitive advantage over rivals.
E) are usually a company's best approach to building a distinctive competence.

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A) What makes backward vertical integration such an attractive strategic option is the opportunity to capture the profit margins of suppliers and thereby increase the company's own profitability.
B) Backward vertical integration can produce a differentiation-based competitive advantage when a company,by performing activities internally rather than utilizing outside suppliers,ends up with a better-quality product/service offering,improves the caliber of its customer service,or in other ways enhances the performance of its final product.
C) For backward integration to be a viable and profitable strategy,a company must be able to (1) achieve the same scale economies as outside suppliers and (2) match or beat suppliers' production efficiency with no drop in quality.
D) The best potential for being able to reduce costs via a backward integration strategy exists in situations where suppliers have outsized profit margins,where the item being supplied is a major cost component,and where the requisite technological skills are easily mastered or can be gained by acquiring a supplier with the desired technological know-how.
E) Potential advantages of backward integration include sparing a company the uncertainty of being dependent on suppliers for crucial components or support services and lessening a company's vulnerability to powerful suppliers inclined to raise prices at every opportunity.

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A) are nearly always successful in achieving their desired purpose (unlike strategic alliances and collaborative partnerships) .
B) all too frequently do not produce the hoped-for outcomes.
C) are generally more effective in securing a new competitive advantage than in protecting an existing competitive advantage.
D) are highly risky because of the financial drain that comes from using the company's cash resources to pay for the costs of the merger or acquisition.
E) are usually more successful in helping a company's shift from one competitive strategy to another than in improving a company's competitive strength and resource capabilities.

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A) They do not produce the hoped for outcomes and changes to existing operations may not eventuate.
B) Cost savings may prove smaller than expected.
C) Gains in competitive capabilities may take substantially longer or never materialize.
D) Efforts to mesh corporate cultures can stall due to formidable resistance from organization members and key employees can become disenchanted and leave.
E) All of these.

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A) random offensive attacks used by a market leader to steal customers away from unsuspecting smaller rivals.
B) undertaking surprise moves to secure an advantageous position in a fast-growing and profitable market segment;usually the guerrilla signals rivals that it will use deep price cuts to defend its newly won position.
C) work best if the guerrilla is the industry's low-cost leader.
D) pitting a small company's own competitive strengths head-on against the strengths of much larger rivals.
E) unexpected attacks (usually by a small competitor) to grab sales and market share from complacent or distracted rivals.

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A) Vertical integration boosts a firm's capital investment in the industry,thus increasing business risk if the industry becomes unattractive later.
B) Integrating backward into parts and components manufacture can impair a company's operating flexibility when it comes to changing out the use of certain parts and components.
C) Vertical integration limits a company's ability to achieve greater product differentiation and to exercise direct control over the costs of performing value chain activities.
D) Forward or backward integration often calls for radically different skills and business capabilities than the firm possesses.
E) Vertical integration poses all kinds of capacity-matching problems.

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