SEVI 3013 Exam 2- Uark with
Complete Solutions
Strategic Action - ANS-a market-based move that involves a significant commitment of
organizational resources and is difficult to implement and reverse
Tactical action - ANS-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 - ANS-a strategic or tactical action the firm takes to build or defend
its competitive advantages or improve its market position
Competitive Response - ANS-a strategic or tactical action the firm takes to counter the
effects of a competitor's competitive action
Competitors - ANS-firms operating in the same market, offering similar products, and
targeting similar customers
Competitive rivalry - ANS-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: - ANS-§ Ability to develop and
then sustain its competitive advantages
§ Level (average, below average, or above average) of financial return.
Competitive Behavior - ANS-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 - ANS-occurs when firms compete against each other in
several product or geographic markets
Competitive dynamics - ANS-The total set of actions and responses taken by all firms
competing within a market.
competitor analysis - ANS-how companies gather and interpret information about their
competitors- to understand
Competitor analysis studies: - ANS-Future objectives, current strategies, assumptions,
capabilities
, To complete a competitor analysis, firms study: - ANS-market commonality and
resource similarity
market commonality and resource similarity shape the firms: - ANS-Awareness,
motivation, ability
Awareness - ANS-refers to the extent to which competitors recognize the degree of their
mutual interdependence
Motivation - ANS-concerns the firms incentive to take action or to respond to a
competitors attack
Ability - ANS-refers to the quality of resources available to the firm to attack and
respond
Resource Dissimilarity - ANS-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 - ANS-the amount of money a firm pays to deliver products or services to the
customer
Price - ANS-what the customer pays to obtain the product or service
Competitive Dynamics differ in: - ANS-slow, fast, and standard cycle markets
Managerial motives to diversify can lead to: - ANS-over diversification and a subsequent
reduction in a firm's ability to create value.
Managerial tendencies to over diversify may be held in check by: - ANS--Governance
mechanisms (board of directors)
-Monitoring by owners
-Executive compensation practices
-The market for corporate control
How to create value by: - ANS--buying assets at a low cost
-restructuring the assets
-selling the assets at a price that exceeds their cost in the external market
Merger - ANS-a strategy through which two firms agree to integrate their operations on
a relatively coequal basis
Complete Solutions
Strategic Action - ANS-a market-based move that involves a significant commitment of
organizational resources and is difficult to implement and reverse
Tactical action - ANS-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 - ANS-a strategic or tactical action the firm takes to build or defend
its competitive advantages or improve its market position
Competitive Response - ANS-a strategic or tactical action the firm takes to counter the
effects of a competitor's competitive action
Competitors - ANS-firms operating in the same market, offering similar products, and
targeting similar customers
Competitive rivalry - ANS-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: - ANS-§ Ability to develop and
then sustain its competitive advantages
§ Level (average, below average, or above average) of financial return.
Competitive Behavior - ANS-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 - ANS-occurs when firms compete against each other in
several product or geographic markets
Competitive dynamics - ANS-The total set of actions and responses taken by all firms
competing within a market.
competitor analysis - ANS-how companies gather and interpret information about their
competitors- to understand
Competitor analysis studies: - ANS-Future objectives, current strategies, assumptions,
capabilities
, To complete a competitor analysis, firms study: - ANS-market commonality and
resource similarity
market commonality and resource similarity shape the firms: - ANS-Awareness,
motivation, ability
Awareness - ANS-refers to the extent to which competitors recognize the degree of their
mutual interdependence
Motivation - ANS-concerns the firms incentive to take action or to respond to a
competitors attack
Ability - ANS-refers to the quality of resources available to the firm to attack and
respond
Resource Dissimilarity - ANS-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 - ANS-the amount of money a firm pays to deliver products or services to the
customer
Price - ANS-what the customer pays to obtain the product or service
Competitive Dynamics differ in: - ANS-slow, fast, and standard cycle markets
Managerial motives to diversify can lead to: - ANS-over diversification and a subsequent
reduction in a firm's ability to create value.
Managerial tendencies to over diversify may be held in check by: - ANS--Governance
mechanisms (board of directors)
-Monitoring by owners
-Executive compensation practices
-The market for corporate control
How to create value by: - ANS--buying assets at a low cost
-restructuring the assets
-selling the assets at a price that exceeds their cost in the external market
Merger - ANS-a strategy through which two firms agree to integrate their operations on
a relatively coequal basis
