Submission to 344 Class Test_344 Klastoets
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Student: Putter, S (14956142)
Score: 16 out of 20 (80%)
Date: 09/15/2009 14:05
Duration: 01:49
Workstation: 146.232.66.2

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1.Whether supplier-seller relationships in an industry represent a strong or weak source of competitive pressure is a function of

whether the profits of suppliers are relatively high or low.
the number of suppliers that each seller/industry member purchases from on average.
how aggressively rival industry members are trying to differentiate their products.
correctwhether suppliers can exercise sufficient bargaining power to influence the terms and conditions of supply in their favor and the extent of seller-supplier collaboration in the industry.
whether the prices of the items being furnished by the suppliers are rising or falling.

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2.The biggest and most important differences among the competitive strategies of different companies boil down to

how they go about building a brand name image that buyers trust and whether they are a risk-taker or risk-avoider.
the different ways that companies try to cope with the five competitive forces.
correctwhether a company's market target is broad or narrow and whether the company is pursuing a competitive advantage linked to low cost or differentiation.
the kinds of actions companies take to improve their competitive assets and reduce their competitive liabilities.
the relative emphasis they place on offensive versus defensive strategies.

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3.A company's "macroenvironment" refers to

the industry and competitive arena in which the company operates.
general economic conditions plus the factors driving change in the markets where a company operates.
correctall the relevant forces and factors outside a company's boundaries—general economic conditions, population demographics, societal values and lifestyles, technological factors, governmental legislation and regulation, and closer to home, the industry and competitive arena in which it operates.
the competitive market environment that exists between a company and its competitors.
the dominant economic features of a company's industry.

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4.The rivalry among competing firms tends to be more intense

when demand for the product is growing slowly, buyers have low switching costs, and the actions of any one company to attract more customers and boost market share have strong direct impact on their rivals.
incorrectwhen the products/services of rival sellers are strongly differentiated and buyer demand is strong.
when rivals are relatively content with their market position.
when there are so many industry rivals that the impact of any one company's actions is spread thinly across all industry members.
the smaller the number of firms in the industry and the more unequal their market shares.

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5.A low-cost leader can translate its low-cost advantage over rivals into superior profit performance by

incorrectcutting its price to levels significantly below the prices of rivals.
either using its low-cost edge to underprice competitors and attract price sensitive buyers in large enough numbers to increase total profits or refraining from price-cutting and using the low-cost advantage to earn a bigger profit margin on each unit sold.
going all out to use its cost advantage to capture a dominant share of the market.
spending heavily on advertising to promote its cost advantage and the fact that it charges the lowest prices in the industry—it can then use this reputation for low prices to build very strong customer loyalty, gain repeat sales year after year, and earn sustained profits over the long-term.
outproducing rivals and thus having more units available to sell.

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6.For a company to translate its performance of value chain activities into competitive advantage, it must

correctdevelop core competencies and maybe a distinctive competence over rivals and that are instrumental in helping it deliver attractive value to customers or else be more cost efficient in how it performs value chain activities.
have more core competencies than rivals.
have at least three distinctive competencies.
have competencies that allow it to produce the highest quality product in the industry.
have more competitive assets than competitive liabilities.

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7.Which of the following is not a relevant consideration in identifying an industry's dominant economic features?

Market size and growth rate, the geographic scope of competitive rivalry, and demand-supply conditions
The extent to which economies of scale and learning/experience curve effects are present
correctHow many strategic groups the industry has and which ones are most profitable and least profitable
The number and sizes of buyers, the number of rivals, and the pace of product innovation
The prevalence of vertical integration and the pace of technological change

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8.The payoff of doing a thorough SWOT analysis is

identifying whether the company's value chain is cost effective vis-à-vis the value chains of rivals.
helping strategy-makers benchmark the company's resource strengths against industry key success factors.
enabling a company to assess its overall competitive position relative to its key rivals.
revealing whether a company's market share, measures of profitability, and sales compare favorably or unfavorably vis-à-vis key competitors.
correctassisting strategy-makers in crafting a strategy that is well-matched to the company's resources and capabilities, its market opportunities, and the external threats to its future well-being.

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9.One important indicator of how well a company's present strategy is working is whether

it has more core competencies than close rivals.
its strategy is built around at least two of the industry's key success factors.
correctthe company is achieving its financial and strategic objectives and whether it is an above-average industry performer.
it is customarily a first-mover in introducing new or improved products (a good sign) or a late-mover (a bad sign).
it is subject to weaker competitive forces and pressures than close rivals (a good sign) or stronger competitive forces and pressures (a bad sign).

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10.Which of the following is not a major question to ask in thinking strategically about industry and competitive conditions in a given industry?

correctHow many companies in the industry have good track records for revenue growth and profitability?
What strategic moves are rivals likely to make next?
What are the key factors for future competitive success?
Does the outlook for the industry present the company with sufficiently attractive prospects for profitability?
What forces are driving changes in the industry, and what impact will these changes have on competitive intensity and industry profitability?

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11.Which of the following is not an option for remedying a supplier-related cost disadvantage?

Integrate backward into the business of high-cost suppliers in an effort to reduce the costs of the items being purchased.
Negotiate more favorable prices with suppliers.
Collaborate closely with suppliers to identify mutual cost-saving opportunities.
Switch to lower priced substitute inputs.
correctPersuade forward channel allies to implement best practices.

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12.Which of the following is not a good example of a substitute product that triggers stronger competitive pressures?

incorrectA salad as a substitute for French fries
Wireless phones as a substitute for wired telephones
Coca-Cola as a substitute for Pepsi
Snowboards as a substitute for snow skis
Video-on-demand services from a cable TV company as a substitute for going to the movies

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13.Which of the following is generally not considered as a barrier to entry?

correctRapid market growth
Sizable capital requirements and an array of regulatory requirements
Strong buyer loyalty to existing brands
Sizable economies of scale in production
Difficulties in gaining access to technological know-how

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14.In a weighted competitive strength analysis, each strength measure is assigned a weight based on

its percentage share of total industry revenues.
the importance of each competitive strength measure in building a sustainable competitive advantage.
correctits perceived importance in determining a company's competitive success in the marketplace.
its percentage share of total industry profits.
what it takes to provide better analytical balance between the companies with high ratings and the companies with low ratings and thus get the sum of the weights to add up to 1.0.

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15.A company achieves competitive advantage whenever

it is the acknowledged market share leader.
it is the industry's acknowledged technology leader.
it has greater financial resources than its rivals.
it has a well-known and well-regarded brand name, prefers offensive strategies to defensive strategies, and has a strong balance sheet.
correctit has some type of edge over rivals in attracting customers and coping with competitive forces.

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16.Which of the following is not pertinent in identifying a company's present strategy?

The key functional strategies (R&D, supply chain management, production, sales and marketing, HR, and finance) a company is employing
Management's planned, proactive moves to outcompete rivals (via better product design, improved quality or service, wider product lines, and so on)
The company's mission, strategic objectives, and financial objectives
incorrectMoves to respond and react to changing conditions in the macro-environment and in industry and competitive conditions
The strategic role of its collaborative partnerships and strategic alliances with others

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17.In a weighted competitive strength assessment, the sum of the weights should add up to

100%.
correct1.0.
10.
100.
None of the above.

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18.Which of the following is not one of the pitfalls of pursuing a differentiation strategy?

correctTrying to strongly differentiate the company's product from those of rivals rather than be content with weak product differentiation
Over-differentiating so that the features and attributes incorporated exceed buyer needs and requirements
Trying to charge too high a price premium for the differentiating features
Differentiating on features or attributes that rivals can easily copy
Overspending on efforts to differentiate the company's product offering

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19.While there are many routes to competitive advantage, they all involve

building a brand name image that buyers trust.
correctdelivering superior value to buyers and building competencies and resource strengths in performing value chain activities that rivals cannot readily match.
achieving lower costs than rivals and becoming the industry's sales and market share leader.
finding effective and efficient ways to strengthen the company's competitive assets and to reduce its competitive liabilities.
getting in the best strategic group and dominating it.

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20.The generic types of competitive strategies include

build market share, maintain market share, and slowly surrender market share.
offensive strategies and defensive strategies.
correctlow-cost provider, broad differentiation, best-cost provider, focused low-cost, and focused differentiation.
low-cost/low price strategies, high-quality/high price strategies, and medium quality/medium price strategies.
price leader strategies, price follower strategies, technology leader strategies, first-mover strategies, offensive strategies, and defensive strategies.

Prepared by: Coetzee, Lana