SEVI 3013 Exam 2- Uark Study Guide with complete
solution
Strategic Action
a market-based move that involves a significant commitment of organizational
resources and is difficult to implement and reverse
Tactical action
a market-based move that is taken to fine-tune a strategy; it involves fewer resources
and is relatively easy to implement and reverse
Competitive Action
a strategic or tactical action the firm takes to build or defend its competitive advantages
or improve its market position
Competitive Response
a strategic or tactical action the firm takes to counter the effects of a competitor's
competitive action
Competitors
firms operating in the same market, offering similar products, and targeting similar
customers
Competitive rivalry
the ongoing set of competitive actions and competitive responses that occur among
firms as they maneuver for an advantageous market position
The outcomes of competitive rivalry influence the firms:
§ Ability to develop and then sustain its competitive advantages
§ Level (average, below average, or above average) of financial return.
Competitive Behavior
the set of competitive actions and competitive responses the firm takes to build or
defend its competitive advantages and to improve its market position
Multimarket Competition
occurs when firms compete against each other in several product or geographic
markets
Competitive dynamics
The total set of actions and responses taken by all firms competing within a market.
competitor analysis
how companies gather and interpret information about their competitors- to understand
Competitor analysis studies:
Future objectives, current strategies, assumptions, capabilities
To complete a competitor analysis, firms study:
market commonality and resource similarity
market commonality and resource similarity shape the firms:
Awareness, motivation, ability
Awareness
refers to the extent to which competitors recognize the degree of their mutual
interdependence
Motivation
concerns the firms incentive to take action or to respond to a competitors attack
, Ability
refers to the quality of resources available to the firm to attack and respond
Resource Dissimilarity
the more significant the difference between resources owned by the acting firm and
those against whom it has taken action, the longer is the delay by the firm with a
resource disadvantage
-influences competitive actions and responses firms choose to take
Cost
the amount of money a firm pays to deliver products or services to the customer
Price
what the customer pays to obtain the product or service
Competitive Dynamics differ in:
slow, fast, and standard cycle markets
First mover
a firm that takes an initial competitive action in order to build or defend its competitive
advantages or to improve its market position
First-mover benefits are often critical to a firm's success in industries:
-experiencing rapid technological developments
-with relatively short product life cycles
In addition to earning above-average returns until its competitors respond to its
successful competitive action, the first mover can gain:
-the loyalty of customers
-market share
First movers tend to:
•Be aggressive
•Be willing to experiment with innovation
•Take higher yet reasonable levels of risk
To be a first mover, the firm must have readily available resources to:
-Invest significantly in R&D
-rapidly and successfully produce and market a stream of innovative products
Organizational slack
the buffer or cushion provided by actual or obtainable resources that aren't currently in
use and are in excess of the minimum resources needed to produce a given level of
organizational output
-makes it possible for firms to have the ability to be first movers
Second Mover
a firm that responds to the first mover's competitive action, typically through imitation
The Second Mover:
-Studies customers' reactions to product innovations
-Tries to find any mistakes the first mover made so that it can avoid them and the
problems they created
-Has the time to develop processes and technologies that:
-Are more efficient than those the first mover used
-Create additional value for consumers
Late Mover
solution
Strategic Action
a market-based move that involves a significant commitment of organizational
resources and is difficult to implement and reverse
Tactical action
a market-based move that is taken to fine-tune a strategy; it involves fewer resources
and is relatively easy to implement and reverse
Competitive Action
a strategic or tactical action the firm takes to build or defend its competitive advantages
or improve its market position
Competitive Response
a strategic or tactical action the firm takes to counter the effects of a competitor's
competitive action
Competitors
firms operating in the same market, offering similar products, and targeting similar
customers
Competitive rivalry
the ongoing set of competitive actions and competitive responses that occur among
firms as they maneuver for an advantageous market position
The outcomes of competitive rivalry influence the firms:
§ Ability to develop and then sustain its competitive advantages
§ Level (average, below average, or above average) of financial return.
Competitive Behavior
the set of competitive actions and competitive responses the firm takes to build or
defend its competitive advantages and to improve its market position
Multimarket Competition
occurs when firms compete against each other in several product or geographic
markets
Competitive dynamics
The total set of actions and responses taken by all firms competing within a market.
competitor analysis
how companies gather and interpret information about their competitors- to understand
Competitor analysis studies:
Future objectives, current strategies, assumptions, capabilities
To complete a competitor analysis, firms study:
market commonality and resource similarity
market commonality and resource similarity shape the firms:
Awareness, motivation, ability
Awareness
refers to the extent to which competitors recognize the degree of their mutual
interdependence
Motivation
concerns the firms incentive to take action or to respond to a competitors attack
, Ability
refers to the quality of resources available to the firm to attack and respond
Resource Dissimilarity
the more significant the difference between resources owned by the acting firm and
those against whom it has taken action, the longer is the delay by the firm with a
resource disadvantage
-influences competitive actions and responses firms choose to take
Cost
the amount of money a firm pays to deliver products or services to the customer
Price
what the customer pays to obtain the product or service
Competitive Dynamics differ in:
slow, fast, and standard cycle markets
First mover
a firm that takes an initial competitive action in order to build or defend its competitive
advantages or to improve its market position
First-mover benefits are often critical to a firm's success in industries:
-experiencing rapid technological developments
-with relatively short product life cycles
In addition to earning above-average returns until its competitors respond to its
successful competitive action, the first mover can gain:
-the loyalty of customers
-market share
First movers tend to:
•Be aggressive
•Be willing to experiment with innovation
•Take higher yet reasonable levels of risk
To be a first mover, the firm must have readily available resources to:
-Invest significantly in R&D
-rapidly and successfully produce and market a stream of innovative products
Organizational slack
the buffer or cushion provided by actual or obtainable resources that aren't currently in
use and are in excess of the minimum resources needed to produce a given level of
organizational output
-makes it possible for firms to have the ability to be first movers
Second Mover
a firm that responds to the first mover's competitive action, typically through imitation
The Second Mover:
-Studies customers' reactions to product innovations
-Tries to find any mistakes the first mover made so that it can avoid them and the
problems they created
-Has the time to develop processes and technologies that:
-Are more efficient than those the first mover used
-Create additional value for consumers
Late Mover
