Which of the following is a potential defensive move to ward off challenger firms?

1. Question : Which of the following is a potential defensive
move to ward off challenger firms?

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Student choices: Granting volume discounts or better financing
terms to dealers/distributors and providing discount coupons to
buyers to help discourage them from experimenting with other
suppliers/brands.

Signaling challengers that retaliation is likely in the event they
launch an attack.

Making an occasional strong counter-response to the moves of weak
competitors to enhance the firm’s image as a tough defender.

Maintaining a war chest of cash and marketable securities.

All of these.
2. Question : The difference between a merger and an acquisition
is

Student choices: that a merger involves one company purchasing the
assets of another company with cash, whereas an acquisition
involves one company becoming the owner of another company by
buying all of the shares of its common stock.

that a merger is the combining of two or more companies into a
single entity (with the newly created company often taking on a new
name) whereas an acquisition is a combination in which one company,
the acquirer, purchases and absorbs the operations of another, the
acquired.

basically a play on words—in both instances, two companies become
one.

that the brands of both companies are retained in a merger whereas
with an acquisition there is only one surviving brand name.

that a merger involves two or more companies deciding to adopt the
same strategy whereas an acquisition involves one company becoming
the owner of another company but with each company still pursuing
its own separate strategy.
3. Question : Broad differentiation strategies are well-suited
for market circumstances where

Student choices: there are many ways to differentiate the product
or service and many buyers perceive these differences as having
value.

most buyers have the same needs and use the product in the same
ways.

buyers are susceptible to clever advertising.

barriers to entry are high and suppliers have a low degree of
bargaining power.

price competition is especially vigorous.
4. Question : Which of the following is not among the principal
offensive strategy options that a company can employ?

Student choices: Leapfrogging competitors by being the first
adopter of next-generation technologies or being first to market
with next-generation products

Offering an equally good or better product at a lower price

Blocking the avenues open to challengers

Attacking the competitive weakness of rivals

A blue ocean strategy
5. Question : What sets focused (or market niche) strategies
apart from low-cost leadership and broad differentiation strategies
is

Student choices: the extra attention paid to top-notch product
performance and product quality.

their concentrated attention on a narrow piece of the overall
market.

greater opportunity for competitive advantage.

their suitability for market situations where most industry rivals
have weakly differentiated products.

their objective of delivering more value for the money.
6. Question : A good example of vertical integration is

Student choices: a producer of organic vegetables deciding to
expand into the production of organic fruits.

a supermarket chain acquiring a distributor of fresh fruits and
vegetables.

a crude oil refiner purchasing a railroad company.

a hospital opening up a nursing home for the aged.

a maker of prescription drugs acquiring a chain of hospitals.
7. Question : Mergers and acquisitions are often driven by such
strategic objectives as to

Student choices: expand a company’s geographic coverage, extend its
business into new product categories, or gain quick access to new
technologies or other resources and capabilities.

weaken the bargaining power of either key suppliers or key
customers.

reduce the company’s vulnerability to industry driving forces.

facilitate a company’s shift from one type of competitive strategy
to another.

secure a higher credit rating and better access to additional
financial capital.
8. Question : Which of the following is not one of the pitfalls
of a low-cost provider strategy?

Student choices: Overly aggressive price-cutting

Using a cost-based advantage to improve the company’s bargaining
position with high-volume buyers

Relying on an approach to reducing costs that can be easily copied
by rivals

Cutting prices more than the size of a company’s cost advantage

Becoming too fixated on cost reductions so that the company’s
products are too features-poor
9. Question : Perceived value and signaling value are often an
important part of a successful differentiation strategy when

Student choices: the nature of differentiation is hard to
quantify.

buyers are making a first-time purchase.

repurchase of the product or service is infrequent.

buyers are unsophisticated and unfamiliar with the capabilities of
competing brands.

All of these.
10. Question : Strategic alliances are more likely to be
long-lasting when

Student choices: they involve collaboration with suppliers or
distribution allies or when both parties conclude that continued
collaboration is in their mutual interests.

the alliance involves partners based in countries with distinctly
different cultures and consumer buying habits and preferences.

both partners are experienced with strategic alliances and
routinely enter into collaborative agreements with firms in
peripheral industries.

the alliance involves joining forces in R&D to develop new
technologies cheaper than a company could develop the technology on
its own.

each partner has considerable resource weaknesses in the
marketplace.

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