BUSINESS ADMINISTRATION
STRATEGIC MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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acquire the competitor
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target the markets of the rival
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expand into new geographical areas
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offer price discounts and rebates
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Detailed explanation-1: -Research indicates that three factors determine the likelihood that a firm will respond to a competitive move: awareness, motivation, and capability. These three factors together determine the level of competition tension that exists between rivals (Table 6.7 “Competitive Tension: The A-M-C Framework”).
Detailed explanation-2: -A competitive response is a strategic or tactical action the firm takes to counter the effects of a competitor’s competitive action. A strategic action or a strategic response is a market-based move that involves a significant commitment of organizational resources and is difficult to implement and reverse.
Detailed explanation-3: -A strategic action or a strategic response requires a significant commitment of organizational resources, is difficult to successfully implement, and is difficult to reverse. In contrast, a tactical action or a tactical response requires fewer organizational resources and is easier to implement and reverse.
Detailed explanation-4: -Each of these actions is intended to improve the firm’s standing in the marketplace. Such actions can be classified as one of six different types of competitive action: (i) pricing, (ii) marketing, (iii) new products, (iv) capacity, (v) service, and (vi) signaling.