Competitive Strategies Quiz

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Questions and Answers

What defines a low-cost provider strategy?

It emphasizes unique product features.

It targets affluent consumer segments only.

It focuses on high-quality service offerings.

It achieves a cost-based advantage over rivals. (correct)

Which strategy is best characterized by targeting a narrow market with specialized products?

Focused low-cost strategy

Focused differentiation strategy (correct)

Best-cost provider strategy

Broad differentiation strategy

What is essential for a company to achieve sustainable competitive advantage?

Providing lower prices than all rivals.

Developing a large preference from buyers for its offerings. (correct)

Introducing new products only once a year.

Constantly reducing production scale.

In which strategy does a company provide both lower costs and added value?

Best-cost provider strategy Signup and view all the answers

What role does research and development (R&D) play in achieving competitive advantage?

It helps in frequently introducing innovative products. Signup and view all the answers

What is a best-cost provider strategy's primary aim?

To provide more value while meeting price expectations. Signup and view all the answers

Which of the following is NOT a characteristic of focused low-cost strategy?

Operating on a broader scale in the market. Signup and view all the answers

How does Apple Inc. sustain its competitive edge?

By maintaining a price premium alongside unique value propositions. Signup and view all the answers

What typically happens in an industry experiencing high levels of competitive rivalry?

Heightened pressure to cut prices and enhance marketing efforts Signup and view all the answers

Which factor is NOT a result of increased competitive pressures among sellers?

Higher demand for product diversity Signup and view all the answers

How do high exit barriers affect failing competitors in an industry?

They prevent failing competitors from leaving the industry Signup and view all the answers

What is a characteristic of 'cutthroat' competitive rivalry?

Aggressive tactics that can harm profitability Signup and view all the answers

When the five competitive forces are strong, what effect do they have on industry profitability?

They generally decrease overall industry profitability Signup and view all the answers

What typically results from strong outside firms acquiring weaker firms in an industry?

Higher competition for market share Signup and view all the answers

Which of the following describes a moderate level of competitive rivalry?

Lively competition while maintaining acceptable profitability Signup and view all the answers

What is a significant outcome of buyer power becoming more pronounced in an industry?

A decrease in brand loyalty Signup and view all the answers

What is one condition that increases the threat of new entrants in a market?

Sizable pool of potential entrants Signup and view all the answers

Which factor does NOT contribute to the competitive force of potential new entrants?

High brand preferences Signup and view all the answers

How do economies of scale impact the entry of new competitors into a market?

They create cost advantages for existing companies. Signup and view all the answers

What role do regulatory policies play in the competitive force of potential new entrants?

They create restrictive conditions for entry. Signup and view all the answers

Which of the following is least likely to encourage new entrants to an industry?

High initial investment costs Signup and view all the answers

What is a primary characteristic of an industry that is attractive to potential new entrants?

Growth opportunities Signup and view all the answers

Which barrier to entry involves the ability to influence consumer preferences?

Strong brand loyalty Signup and view all the answers

What is a common reason for existing companies to act against potential new entrants?

To maintain market share Signup and view all the answers

Study Notes

Course Information

Course title: Strategic Management, MGMT5615
Course instructor: Donald MacMullen
Term: Fall Term 2024

Course Agenda

Chapter #1: Strategy, Business Models, and Competitive Advantage
Sirius XM, Assurance of Learning
Chapter #2: Strategy Formulation, Strategy Execution Process
Article: Malgorzata Tyranska: Values and Mission Statement, Canadian Universities, an in-class activity
Video: Role of Strategy in a Firm's Quest for Competitive Advantage
Learning Objectives: Understand company strategy, why a company needs a creative strategy, the importance of viable business models, five dependable strategic approaches to competitive advantage, why a company's strategy evolves, and three tests of a winning strategy
What is Strategy?: Choosing how to compete, creating products or services that attract customers, positioning the company in its industry, developing and deploying resources to build competitive capabilities, and achieving the firm's performance targets
Core Concept: Strategy- A company's strategy is the coordinated set of actions that its managers take to outperform the company's competitors and achieve superior profitability.
The Importance of a Distinctive Strategy and Competitive Approach - A company's strategy is a distinctive set of creative strategic choices to be apart from rivals, and intended to allow it to compete differently, doing what rival firms do not do or better yet what rival firms cannot do.
The Relationship Between a Company's Strategy and Its Business Model
Business model - Management's blueprint for delivering to customers a valuable product or service that will yield an attractive profit.
Elements of the business model - Customer value proposition, profit formula.
Core Concept: Business Model - A company's business model sets forth how its strategy and operating approaches will create value for customers, while at the same time generating ample revenues to both cover costs and earn a profit.
Two elements of a company's business model - Customer value proposition and profit formula.
Video: What is Competitive Advantage?
Concepts and Connections 1.1 Spotify, Sirius XM, and Over-the-Air Broadcast Radio: Three Contrasting Business Models - Spotify, Sirius XM, and Over-the-Air Radio Broadcasters- Business Model analysis of these three entities comparing Customer Value Proposition and the Profit Formula.
XM Satellite Radio: Historical information about the company, including the initial service date, the merger with Sirius, and the combined broadcasting dates.
SiriusXM - Leaders in audio entertainment delivering quality content throughout North America - A company's business model.
LIFE AT SIRIUSXM - Company's values, purpose and vision.
SiriusXM Business Model - Company's strategy and actions to deliver superior value to customers, the customer value proposition and the benefit formula.
Learning Objectives: Understanding a company's strategy and its difference from competitors, viable business model, and five main strategic approaches to achieve sustainable competitive advantages, understanding the concept of the evolution of strategy, and three tests of a winning strategy.
What is Strategy?: Defining actions to compete, attract customers, and position a company in the market and capitalize on business opportunities, response to changing economic/market conditions, managing every functional piece of the business, and achieving firm's performance targets.
Core Concept: Business Model - Company’s approach to delivering value to consumers, profit formula.
Core Concept: Strategic Approaches- Five competitive approaches toward a sustainable competitive edge and a best-cost provider strategy.
The Importance of a Distinctive Strategy and Competitive Approach - Strategic choices.
The Importance of a Distinctive Strategy and Competitive Approach- Defining the importance of unique strategies from rivals.
Core Concept: Strategic- Defining the strategy, a company's approach to outperform competitors.
Strategic Approaches: Five competitive approaches to achieve a sustainable competitive advantage.
Case study related to Chapter 1: SiriusXM
Chapter 2: The Strategy Formulation, Strategy Execution Process- Learning Objectives: Understanding and why it is critical for company managers to have a clear strategic vision, defining the importance of strategic and financial objectives, why the strategic initiatives taken at various organizational levels must be tightly coordinated to achieve company-wide performance targets.
Chapter 2: Strategic Plan- Three steps to strategic planning that work-Developing a vision, mission, and values, setting objectives, and crafting and achieving objectives.
Chapter 2: Strategic Vision, Mission, Core Values- defining vision, mission, and core values.
Chapter 2: Characteristics of Effectively Worded Vision Statements - characteristics of vision statements in the marketplace.
Chapter 2: Common Shortcomings in Company Vision Statements - The weaknesses and problems of poor, poorly formulated vision statements.
Chapter 2: Strategic Visions - How Well Do They Measure Up? - Applying strategies and vision to companies.
Chapter 2: Why a Sound, Well-Communicated Strategic Vision Matters- Importance of a clear statement and why it matters.
Strategic Vision Versus Mission Statement - Differentiating between vision and mission statements.
Developing a Company Mission Statement - Describing a company mission statement.
Example of a Mission Statement - Providing an example of a mission statement.
Core Concept: Mission Statement- Defining the mission statement.
Strategic Mission, Vision, and Profit - Differentiating between mission, vision and profit.
Linking Strategic Vision and Mission with Company Values- Importance of values and how it links to the mission and vision..
Chapter 3: Evaluating a Company's External Environment- Learning Objectives: Identifying factors in a broad macro-environment, recognizing factors that cause industry competition, mapping market positions of rival industry groups, and determining whether an industry's outlook presents attractive opportunities for growth and profitability.
What are the Strategically Relevant Components of a Company's Macro Environment?- Factors to consider for company macro-environment.
Overview- Internal and External factors- financial, reputational, and operational risks.
Chapter 3: Evaluating a Company's External Environment- Learning Objectives, Focus, External Environment- Question Worth Asking, Identifying Components of Macro-Environment, What are the strategically relevant components of a company's macro-environment?, How strong are the industry's competitive forces?, What are the industry's driving forces of change and what impact will they have?, How are industry rivals positioned?, What strategic moves are rivals likely to make next?, What are the industry's key success factors?, and Does the industry offer good potential for attractive profits? Identifying components of a company's macro-environment and competitive pressures in the industry.
PESTLE Analysis, Micro-Environmental Factors, and Factors Shaping Decisions in the Strategy Formulation and Strategy Execution Processes- How to assess companies' external environments.
Overview of Five Forces Model.
Five Forces Model of Competition- How to analyze the competition within an industry.
Chapter 6: Strengthening a Company's Competitive Position: Strategic Moves, Timing, and Scope of Operations- Learning Objectives: Understanding whether and when to pursue offensive or defensive strategic moves, recognizing when being a first-mover or a fast follower or a late mover can lead to competitive advantage.
Launching Strategic Offensives- Aggressive strategies for improving market position, including first-mover advantage, leapfrogging, disruptive innovation.
Defense Strategies- Defending the company from competitive challenges by lowering the risk and impact of attacks, influencing competitors to aim attacks elsewhere.
Timing a Company's Strategic Moves- First mover advantage, late-mover advantage, factors for deciding when to move.
Strategy-Making Hierarchy; How Does A Company Reach a Plan?- Stages of decision making.
Core Concept: Strategic Fit- Using a strategy that fits the firm's situation, resource allocation, and the use of resources in the marketplace versus to outcompete competitors using unique strategies.
Final Sections and Course Information: The course slides and files include supplemental information or activities for the above segments of study material. Specific dates and times are included, along with information and access for a business case case on Spotify for review . A quiz on the topics in the course material is also stated.

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Description

Test your knowledge on various competitive strategies and how they influence market positioning. This quiz covers important concepts such as low-cost provider strategy, focused strategies, and the impact of competitive rivalry. Explore how companies like Apple Inc. sustain their competitive edge and achieve sustainable advantages.