WPC 480 - WEEK 4 WITH 100% CORRECT ANSWERS ALREADY GRADED A+.

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 an advantageous market position Competitive Behavior The set of competitive actions and responses a firm takes to build or defend its competitive advantages and to improve its market position Competitive Dynamics All competitive behaviors - that is - the total set of actions and responses taken by all firms competing within a market 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 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 Fast-Cycle Markets Markets in which the firm's capabilities that contribute to competitive advantages aren't shielded from imitation and where imitation is often rapid and inexpensive Late Mover A firm that responds to a competitive action a significant amount of time after the first mover's action and the second mover's response Multimarket Competition Occurs when firms compete against each other in several product or geographic markets Market Commonality Concerned with the number of markets with which the firm and a competitor are jointly involved and the degree of importance of the individual markets to each Quality Exists when the firm's good or services meet or exceed customers' expectations Resource Similarity The extent to which the firm's tangible and intangible resources are comparable to a competitor's in terms of both type and amount Strategic Action / Strategic Response A market-based move that involves a significant commitment of organizational resources and is difficult to implement and reverse Second Mover A firm that responds to the first mover's competitive action - typically through imitation Slow-Cycle Markets Markets in which the firm's competitive advantages are shielded from imitation - commonly for long periods of time - and where imitation is costly Standard-Cycle Markets Markets in which the firm's competitive advantages are partially shielded from imitation and imitation is moderately costly Tactical Action / Tactical Response A market-based move that is taken to fine-tune a strategy - it involves fewer resources and is relatively easy to implement and reverse Components of Competitor Analysis Market Commonality Resource Similarity Drivers of Competitive Behavior Awareness Motivation Ability Components of Competitive Rivalry Likelihood of Attack Likelihood of Response Likelihood of Attack First-Mover Benefits Organizational Size Quality Likelihood of Response Type of Competitive Action Actor's Reputation Market Dependence Outcomes Market Position Financial Performance Model of Competitive Rivalry Competitor Analysis Drivers of Competitive Behavior Competitive Rivalry Outcomes Feedback Awareness The extent to which competitors recognize the degree of their mutual interdependence that results from market commonality and resource similarity Motivation Concerns the firm's incentive to take action or to response to a competitor's attack 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 Product Quality Dimensions Performance Features Flexibility Durability Conformance Serviceability Aesthetics Perceived Quality Service Quality Dimensions Timeliness Courtesy Consistency Convenience Completeness Accuracy Performance Operating characteristics Features Important special characteristics Flexibility Meeting operating specifications over some period of time Durability Amount of use before performance deteriorates Conformance Match with pre-established standards Serviceability Ease and speed of repair Aesthetics How a product looks and feels Perceived Quality Subjective assessment of characteristics (product image) Timeliness, Performed in the promised period of time Courtesy Performed cheerfully Consistency Giving all customers similar experiences each time Convenience Accessibility to customers Completeness Fully serviced - as required Accuracy Performed correctly each time Ability The quality of the resources available to the firm to attack and respond Drivers of Competitive Behavior Awareness Motivation Capability Corporate-Level Strategy Actions a firm takes to gain a competitive advantage by selecting and managing a group of different businesses competing in different product markets Economies of Scope Cost savings a firm creates by successfully sharing resources and capabilities or transferring one or more corporate-level core competencies that were developed in one of its businesses to another of its businesses Corporate-Level Core Competencies Complex sets of resources and capabilities that link different businesses - primarily through managerial and technological knowledge - experience - and expertise Market Power This exists when a firm is able to sell its products above the existing competitive level or to reduce the costs of its primary and support activities below the competitive level - or both Multipoint Competition This exists when two or more diversified firms simultaneously compete in the same product areas or geographical markets Vertical Integration When a company produces its own inputs (backwards integration) or owns its own source of output distribution (forward integration) Financial Economies Cost savings realized through improved allocations of financial resources based on investments inside or outside the firm Synergy This exists when the value created by business units working together exceeds the value that those same units create working independently Single-Business Diversification Strategy A corporate-level strategy wherein the firm generates 95 percent or more of its sales revenue from its core business area Dominant-Business Diversification Strategy A corporate-level strategy wherein the firm generates between 70 and 95 percent of its total revenue within a single business area Related Constrained Strategy A corporate-level strategy wherein the firm generates 30 percent of its revenue outside a dominant business and whose businesses are related to each other in some manner Related Link Diversification Strategy A corporate-level strategy where a firm has a diversified portfolio of businesses that have only a few links between them Unrelated Diversification Strategy A corporate-level strategy where a highly diversified firm has no relationships between its businesses Reasons for Diversification Value-Creating Diversification Value-Neutral Diversification Value-reducing Diversification Types of Value-Creating Diversification Economies of Scope (Related Diversification) Market Power (Related Diversification) Financial Economies (Unrelated Diversification) Types of Value-Neutral Diversification Antitrust Regulation Tax Laws Low Performance Uncertain Future Cash Flows Risk Reduction for Firm Tangible Resources Intangible Resources Value-Reducing Diversification Diversifying managerial employment risk Increasing managerial comp