Exam 6: Strengthening a Companys Competitive Position

A) is nearly always a more attractive strategic option than merger and acquisition strategies.
B) carries the substantial risk of raising a company's costs.
C) carries the substantial risk of making a company overly dependent on its suppliers.
D) increases a company's risk exposure to changing technology and/or changing buyer preferences.
E) involves farming out certain value chain activities presently performed in-house to outside vendors.

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A) establishing strong interpersonal relationships to facilitate communication.
B) incorporating contractual safeguards.
C) making opportunities for learning a routine management process.
D) establishing a system to manage alliances in a systematic fashion.
E) creating organizational learning barriers across boundaries.

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A) to boost a firm's capital investment in the industry, thus increasing business risk if the industry becomes unattractive later.
B) to impair a company's operating flexibility when it comes to changing out the use of certain parts and components.
C) to impair a company's flexibility in accommodating shifting buyer preferences.
D) to require radically different skills and business capabilities than the firm possesses.
E) to speed up the company's adoption of technological advances.

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A) an offensive strategy to leapfrog competitors by being the first adopter of next-generation technologies or being first to market with next-generation products.
B) an offensive strategy to offer an equally good or better product at a lower price.
C) an offensive strategy to seek uncharted waters and compete in blue oceans.
D) a defensive strategy to minimize the competitive advantages of rivals.
E) a defensive strategy to capture occupied territory by maneuvering around rivals.

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A) full integration when activities remain the domain of key suppliers.
B) tapered integration if the firm consolidates all activities in-house.
C) differentiation-based competitive advantage when activities enhance the performance of the final product.
D) focused differentiation strategy when the market is broad and the product is a commodity.
E) lower degree of flexibility in accommodating shifting buyer preferences.

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A) working closely with outsiders is essential in developing new technologies and new products in virtually every industry.
B) 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.
C) they represent highly effective ways to achieve low-cost leadership and capture first-mover advantages.
D) they are a powerful way for companies to build loyalty and goodwill among customers with diverse needs and expectations.
E) they are quite effective in helping a company transfer the risks of threatening external developments to other companies.

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A) ensuring more costly components or services.
B) improving the company's inability to innovate by allying with "best-in-class" suppliers.
C) reducing the company's risk exposure to changing technology and/or changing buyer preferences.
D) increasing the firm's inability to assemble diverse kinds of expertise speedily and efficiently.
E) reducing its information technology and operational costs so that organizational flexibility is maintained.

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C

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When to make a strategic move is often a...

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A) IBM performs information technology services for Colgate-Palmolive.
B) Luxottica manufactures glasses for Dolce & Gabbana.
C) Nordstrom retails certain products for Coach Inc.
D) Foxconn manufactures the iPad and iPhone for Apple Inc.
E) Paychex performs HR services for Robert Half Financial & Accounting.

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A) discourage rival companies from merging with or acquiring the very companies that it is partnering with.
B) reduce overall business risk and raise entry barriers into the newly emerging industry.
C) 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.
D) help defeat competitors that are employing broad differentiation strategies.
E) enhance its chances of achieving global low-cost leadership.

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The success of an alliance depends on ho...

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A) that partners will not fully cooperate or share all they know, preferring instead to guard their most valuable information and protect their more valuable know-how.
B) becoming dependent on other companies for essential expertise and capabilities.
C) the added time and extra expenses associated with engaging in collaborative efforts.
D) having to compromise the company's own priorities and strategies in reaching agreements with partners.
E) the collaborative arrangements will not live up to expectations.

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B

A) resource pooling and risk sharing, more adaptive response capabilities, and greater speed of deployment.
B) potential profitability of the alliance and related experience-curve economics.
C) the facilitation of best practices, more production capacity, and relevant synergistic savings.
D) the transactional and relational concept of operating practices and competencies.
E) material additions to a company's technological capabilities, strengthening of the firm's competitive position, and boosting of its profitability.

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A) eBay in the online auction industry
B) Tune Hotels in the lodging industry
C) Uber and Lyft in the ridesharing industry
D) Cirque du Soleil in the live entertainment industry
E) Walmart's logistics and distribution in the retail industry

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A) strategy and competitive advantage.
B) the presence of available resources and competitive capabilities.
C) whether the end result is related to horizontal or vertical scope.
D) creating a more cost-efficient operation out of the combined companies.
E) the details of ownership, management control, and the financial arrangements.

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It is harder than one might think to gen...

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A) pioneering rollout of the dating app on college campuses helped build up the firm's image and reputation and created strong brand loyalty.
B) users remained strongly loyal to Tinder because of incentives and switching cost barriers.
C) learning how to use Tinder was kept proprietary.
D) moving first constituted a preemptive strike, making competitive imitation very difficult or unlikely for rivals.
E) market uncertainties made it difficult for Tinder's founding team to ascertain whether or not the dating app would eventually succeed.

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A) Anticipated gains may fail to materialize for Roche Partnering due to an overly optimistic view of the synergies.
B) Anticipated gains for Roche Partnering may fail to materialize due to a poor fit in terms of the combination of resources and capabilities.
C) One or more of the 190 partners in Roche Partnering could gain access to another company's proprietary knowledge base, technologies, or trade secrets.
D) The partners may disagree among themselves over how to divide the profits gained from joint collaboration.
E) There is a risk for any or all of the 190 partners in Roche Partnering to become overly dependent on other companies within the partnership.

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