CHAPTER 6

Question 1

Competitive and cooperative strategies that emphasize improvement of the competitive position of a corporation’s products or services in a specific industry or market segment.

Answer 1

business strategy

Question 2

The active cooperation of firms within an industry to reduce output and raise prices in order to get around the normal economic law of supply and demand. This practice is usually illegal.

Answer 2

collusion

Question 3

a unifying theme

Answer 3

common thread

Question 4

The breadth of a company’s or a business unit’s target market

Answer 4

competitive scope

Question 5

A strategy that states how a company or a business unit will compete in an industry.

Answer 5

competitive strategy

Question 6

A strategy that states how a company or a business unit will compete in an industry

Answer 6

consolidated industry

Question 7

Strategies that involve working with other firms to gain competitive advantage within an industry.

Answer 7

cooperative strategies

Question 8

A low-cost competitive strategy that concentrates on a particular buyer group or geographic market and attempts to serve only that niche

Answer 8

cost focus

Question 9

A low-cost competitive
strategy that aims at the broad mass market.

Answer 9

cost leadership

Question 10

A competitive strategy that is aimed at the broad mass market and that involves the creation of a product or service that is perceived throughout its industry as
unique

Answer 10

differentiation

Question 11

A differentiation competitive strategy that concentrates on a particular buyer group, product line segment, or geographic market

Answer 11

differentiation focus

Answer 12

differentiation strategy

Question 13

The first company to manufacture and sell a new product or service

Answer 13

first mover

Question 14

An industry in which no firm has large market share and
each firm serves only a small piece of the total market

Answer 14

fragmented industry

Question 15

An independent business entity created by two or more companies in a strategic alliance

Answer 15

joint venture

Question 16

Companies that enter a new market only after other companies have done so

Answer 16

late mover

Question 17

An agreement in which the licensing firm grants rights to another firm in another country or market to produce and/or sell a branded product.

Answer 17

licensing arrangement

Question 18

A strategy in which a company or business unit designs, produces, and markets a comparable product more efficiently than its competitors.

Answer 18

lower cost strategy

Question 19

Tactics that determine where a company or business unit will compete

Answer 19

market location tactics

Question 20

A partnership of similar companies in similar industries that pool their resources to gain a benefit that is
too expensive to develop alone

Answer 20

mutual service consortium

Question 21

A portion of a market that is so well suited to a firm’s internal and external environment that other corporations are not likely to challenge or dislodge it.

Answer 21

propitious niche

Question 22

Strategic factors by combining
the external factors from an EFAS table with
the internal factors from an IFAS table.

Answer 22

SFAS (Strategic Factors Analysis
Summary) Matrix

Question 23

A partnership of two or more corporations or business units to achieve strategically significant objectives
that are mutually beneficial

Answer 23

strategic alliance

Question 24

Development of long range plans for the effective management of environmental opportunities and threats in light of corporate strengths and weaknesses

Answer 24

strategy formulation

Question 25

Identification of strengths, weaknesses, opportunities, and threats that may be strategic factors for a specific
company.

Answer 25

SWOT Analysis

Question 26

A short-term operating plan detailing how a strategy is to be implemented.

Answer 26

tactic

Question 27

Tactics that determines when a business will enter a market with a new product

Answer 27

timing tactic

Question 28

A matrix that illustrates how external opportunities and threats facing a particular company can be matched with
that company’s internal strengths and weaknesses to result in four sets of strategic alternatives.

Answer 28

TOWS Matrix

Question 29

A strategic alliance in which one company or unit forms a long-term arrangement with a key supplier or
distributor for mutual advantage

Answer 29

value-chain partnership

Question 30

Michael Porter proposes two “generic” competitive strategies

Answer 30

Lower cost strategy
Differentiation strategy

Question 31

Offensive Tactics.

Answer 31

Frontal assault
Flanking maneuver
Bypass attack
Encirclement
Guerrilla warfare

Question 32

Defensive Tactics.

Answer 32

Raise structural barriers
Increase expected retaliation
Lower the inducement for attack