Chapter 8

Question 1

Competitive advantage

Answer 1

When a firm earns a persistently higher rate of profit compared to its rivals,BUT comp.adv may not be revealed in higher profitability

Question 2

External change

Answer 2

Different resources,capabilities or strategy positioning

Question 3

Strategic innovation

Answer 3

New approaches to doing business including new business models,redesigned processes and novel org.designs,can appear in industries,customer segments,sources of comp.adv.

Question 4

New game strategy

Answer 4

Reconfiguring the industry value chain in order to change the rules of the games within a market

Question 5

Isolating mechanisms

Answer 5

Barriers that limit the ex post equilibration of rents among individual firms

Question 6

4 conditions for a firm to imitate the str. of another firm

Answer 6

Identification(identify that the rival has a comp.adv),incentive(by investing in imitation the firm can earn superior returns),diagnosis(diagnose the features of its rival’s str.that give rise to comp.adv),resource acquisition(through transfer of replication to acquire the resources and cap. necessary for imitating)

Question 7

Theory of limit pricing

Answer 7

Firm in a strong market position sets prices at a level that just fails to attract entrants

Question 8

Preemption

Answer 8

Occupying existing and potential str.niches to reduce the range of inv.opportunities open to the challenger

Question 9

Proliferation of product variaties

Answer 9

Can leave new entrants,smaller rivals with few opportnities for establishing a market niche

Question 10

Patent proliferation

Answer 10

Can protect technology-based advantages by limiting competitor’s techn.opportunities

Question 11

Causal ambiguity

Answer 11

The more multidimensional s firm’s comp.adv and the more it id based on complex bundles of org.capabilities,the more difficult it is for a competitor to diagnose the determinants of success

Question 12

Uncertain imitability

Answer 12

Any attempt to imitate the str. is subject to uncertain success

Question 13

Issue for would-be imitators

Answer 13

Extent to which the first-mover advantage exists within the market

Question 14

2 types of value-creating activity

Answer 14

Trading and productivity

Question 15

Effiecient market

Answer 15

One in which prices reflect all available information,comp.adv is absent here,because of resource availability

Question 16

Cost advantage

Answer 16

Supply identical products or services at a lower cost

Question 17

Differentation advantage

Answer 17

Supply product or services that are different in such a way that the customers are willing to pay a premium

Question 18

3 generic strategies

Answer 18

Cost leadership,differentation,focus