Strategic Management Concepts Quiz

Formal communications from competitors about future actions. These can be preemptive moves, threats, tests of competitor sentiment, conciliatory gestures, or communications with the financial community.

Competitors disclosing information, sometimes selectively or even misleadingly, to influence the behavior of other competitors.

Competitors commenting publicly on industry conditions, forecasts, and competitor moves. These comments may reveal competitor assumptions and contain pleas for cooperation or price discipline.

Competitor explanations or discussions about their moves. These can be about justifying actions, communicating commitment, or deterring others from following.

The specific choices of strategic variables, such as price, advertising levels, and capacity additions, by competitors. These choices signal their motives and intentions.

The specific timing, location, and initial target of strategic changes can distinguish between aggressive moves and those seeking industry-wide benefit.

Competitors deviating from their historical patterns can signal potential shifts in strategy or competitive intentions.

A competitor's response to a competitor's move in one area with a move in a different area. It indirectly signals displeasure and raises the threat of retaliation.

Large companies with high market share don't always mean the highest profitability. Factors like differentiation or focus can give smaller players an advantage.

Cost leadership isn't the only path to success. Unique products, specific focus, or strong barriers can also drive profitability.

This tool helps analyze industry dynamics by mapping competitor positions based on key strategic factors.

These are barriers that make it difficult for companies to move between strategic groups. Examples include brand reputation, cost structure, or government regulations.

This concept describes how industries evolve over time, driven by factors such as technology, competition, and consumer needs.

This framework helps analyze industry evolution by understanding how factors like demographics, technology, or customer needs change the landscape.

One of the major drivers of industry evolution is changes in the size or behavior of the customer base.

This is a widely used model for understanding product maturity, but it has limitations as industry evolution is rarely linear.

The potential for competitive battles is influenced by factors like the number of players, market growth, fixed costs, product differentiation, and the difficulty of exiting the market. Industries with more competitors, slow growth, high fixed costs, low differentiation, and difficulty leaving are more likely to experience intense rivalry.

Understanding competitors' strengths, weaknesses, likely actions, and their ability to respond to your moves is essential. It's like studying your opponent in a chess game.

These are moves that don't directly threaten rivals, such as improving internal processes, making changes that benefit everyone if followed, or pursuing opportunities that competitors won't match. Think of it as expanding your own capabilities without directly attacking others.

These are moves that aim to improve your position at the expense of your competitors. It requires careful consideration of the likelihood, speed, effectiveness, and potential retaliation from rivals.

These moves aim to deter or counter competitor actions. They involve immediate retaliation, blocking new entry, or making credible commitments to retaliate if necessary.

Commitment involves visibly demonstrating your resources and intentions, shaping competitor perceptions, and discouraging undesirable actions. A strong commitment can be a powerful deterrent.

Clear communication of commitment requires having the resources and mechanisms to follow through, a consistent history of honoring commitments, a perception of being unlikely to back down, and the ability to detect if competitors are violating agreements.

In industries with few players, companies' actions affect each other significantly. One company's move can trigger a chain reaction from others, creating a dynamic and interconnected market.

Conditions that make it difficult for new firms to enter a market, such as high capital requirements or strong brand loyalty.

Actions taken by existing companies to discourage new entrants, such as lowering prices or increasing advertising.

Industries with slow growth, commodity products, high fixed costs, or a high concentration of players are more likely to see fierce retaliation from existing businesses.

Industries that are in turmoil, where the playing field is shifting, or where existing firms are slow to react are more attractive for new entrants.

The price of an acquisition depends on the market value of the company being acquired, setting a minimum price for the buyer.

Situations where the buyer has a unique advantage over the seller, like access to better information or a superior ability to operate the business, which can lead to profitable acquisitions.

When the buyer has more knowledge about the seller's business or the market in general, potentially leading to a more advantageous acquisition.

Acquisitions are more likely to be profitable when the buyer can improve the seller's operations by leveraging its expertise or resources.

The absence of advantages based on size or accumulated production experience.

High costs associated with transporting products, limiting the area a company can serve efficiently.

When it's difficult for a company to operate at a large scale due to managing complex products, maintaining low overhead, or offering customized services.

Variations in customer preferences and demands for unique products, leading to smaller market shares for individual companies.

When many smaller companies survive because they distinguish themselves through brand image rather than lower prices or efficiency.

Barriers that prevent failing companies from leaving the market, leading to more competitors and further fragmentation.

Standardizing products or marketing to appeal to a broader audience, reducing the need for specialized options.

Acquiring other companies to gain a significant market share and achieve economies of scale.

Gaining critical knowledge of upstream or downstream technologies, which helps a company understand and leverage its position in the value chain.

Reducing uncertainty about access to inputs or markets, often crucial in capital-intensive industries, by ensuring a stable supply of resources and a reliable market for products.

Counteracting the influence of powerful suppliers or buyers by having control over key parts of the value chain, allowing for better negotiation and more favorable terms.

Gaining control over more aspects of production and distribution, allowing for improved product differentiation and higher value creation.

Increasing barriers to entry and hindering competitors from easily changing their strategic positions, thus securing a competitive advantage.

Expanding into an adjacent industry with higher potential for profit, but requiring careful consideration of entry barriers and the company's financial capabilities.

Securing access to supplies or markets when competitors are integrated and potentially blocking access, ensuring the company's continued operations.

The potential drawbacks of vertical integration, which can include increased costs, reduced flexibility, and other challenges.