Chapter 5: Competitive Rivalry & Dynamics

Question 1

rivalry suggests

Answer 1

1. firms = mutually interdependent
2. affected by each other’s actions/responses
3. marketplace success = function of individ strats. & consequences of their use

Question 2

rivalry can have a major effect on

Answer 2

1. financial performance (profitability)
2. market position

Question 3

competitor analysis: 2 dimensions of competition determine the extent to which firms are competitors

Answer 3

1. market commonality

=>multimarket = decr comp; decr P(inititate)

2. resource similarity => sw, strat, op.

Question 4

comp rivalry: likelihood of attack

Answer 4

1. first mover benefits
2. org size
3. quality

Question 5

comp rivalry: likelihood of attack: first mover benefits:

3 risks

Answer 5

1. difficult to accurately estimate returns from product innovations
2. cost to develop = substantial => reducing available slack
3. lack of product acceptance over course of innovations => less willingness in the future to accept risks of being a first mover

Question 6

comp rivalry: likelihood of attack: first mover benefits: 2nd mover

Answer 6

-

Question 7

comp rivalry: likelihood of attack: first mover benefits: late mover

Answer 7

-

Question 8

comp rivalry: likelihood of attack: org size

Answer 8

large: likely to initiate more (strategic) actions during given period
small: more likely to launch actions & do so more quickly => speed & surprise => variety

Question 9

comp rivalry: likelihood of attack: quality:

8 product quality dimensions

Answer 9

1. performance
2. features
3. flexibility
4. durability
5. conformance
6. serviceability
7. aesthetics
8. perceived quality

Question 10

8 product quality dimensions: performance

Answer 10

operating characteristics

Question 11

8 product quality dimensions: features

Answer 11

important special characteristics

Question 12

8 product quality dimensions: flexibility

Answer 12

meeting operating specifications over a period of time

Question 13

8 product quality dimensions: durability

Answer 13

amount of use before performance deteriorates

Question 14

8 product quality dimensions: conformance

Answer 14

match with pre-estabilished standards

Question 15

8 product quality dimensions: serviceability

Answer 15

ease and speed of repair

Question 16

8 product quality dimensions: aesthetics

Answer 16

how a product looks and feels

Question 17

8 product quality dimensions: perceived quality

Answer 17

subjective assessment of characteristics (product image)

Question 18

comp rivalry: first mover benefits: quality: 6 service quality dimensions

Answer 18

1. timeliness
2. courtesy
3. consistency
4. convenience
5. completeness
6. accuracy

Question 19

6 service quality dimensions: timeliness

Answer 19

performed in the promised period of time

Question 20

6 service quality dimensions: courtesy

Answer 20

performed cheerfully

Question 21

6 service quality dimensions: consistency

Answer 21

giving all customers similar experiences each time

Question 22

6 service quality dimensions: convenience

Answer 22

accessibility to customers

Question 23

6 service quality dimensions: completeness

Answer 23

fully serviced, as required

Question 24

6 service quality dimensions: accuracy

Answer 24

performed correctly each time

Question 25

comp rivalry: likelihood of response: evaluate 3 factors

Answer 25

1. type of action 2. actor's reputation 3. market dependence

Question 26

competitive dynamics: varying rates of competitive speed in markets

Answer 26

1. slow-cycle 2. fast-cycle 3. standard-cycle

Question 27

competitive dynamics: slow-cycle

Answer 27

- comp adv. = sustainable over longer periods of time (diff to understand) - capability = unique & proprietary - actions/responses: protect, maintain, extend - ex: disney, drugs (pfizer & lipitor), copyrights, patents

Question 28

competitive dynamics: fast-cycle

Answer 28

- comp adv. not sustainable - tech based & much comp. - complex decisions: speed & comprehensive - reverse engineer & % of tech diffusion =\> rapid imitation - volatile =\> innovation = engine of growth - firm avoids loyalty - cannibalize own/upgrade - stretegic alliances

Question 29

competitive dynamics: standard-cycle

Answer 29

- seek large market share & loyalty (brand) & controlled ops. - economies of scale - intense comp bc of: 1) lg volumes 2) mass mkt size 3) scale economies - CCs = less specialized - imitation comes less quickly and is more expensive - innovation = incremental