GMATPrep EP2 New RC
One key to predicting a competitor's strategies is understanding how much that competitor resembles your company. Within a market, companies that resemble each other tend to pursue similar business strategies-called symmetric competition. Companies that have different assets, resources, capabilities, and positions within a market will likely also have different responses to market conditions-called asymmetric competition.
In the fast-food industry, for example, two players faced the same market trends, resulting from the public's concerns about high-fat diets, but responded in markedly different ways. The dominant player, as the target of consumer backlash, introduced a variety of foods It promoted as healthy. The other, foreseeing this move, saw an opportunity to find market share in the less health-conscious fast-food segment and so introduced high-fat, high-calorie sandwiches supported by aggressive, defiant ads.
Your company can anticipate competitors' actions by using a resource-based view of strategy: the idea that companies protect, extend, build, or acquire resources and capabilities that are valuable, rare, and successfully exploitable. Applying this view in a systematic way helps identify the options competitors will likely consider for any strategic Issue. However, determining which options competitors are likeliest to choose also requires moving beyond resource analysis to understanding the personal perceptions and Incentives of competitors' decision makers.
1)The passage refers to the public's concerns about high-fat diets primarily to
A) provide an example of a type of market trend that affects some companies more than others
B) suggest that these concerns have increased competition in the fast-food industry
C) provide evidence that symmetric competition does not typically exist in the fast-food market
D)help provide an example of how companies within an industry reacted to the same market trend
E)suggest that market trends are sometimes altered by the marketing strategies of the companies reacting to them
[spoiler]OA:D[/spoiler]
2)The primary purpose of the passage is to
A) take a stand on a debate regarding business competition
B) offer recommendations on business strategies to company managers
C) describe the reactions of two companies to a particular market trend
D) analyze a type of business strategy used by companies
E) call into question prevailing beliefs within the marketing industry
[spoiler]OA:B[/spoiler]
3)The passage suggests most strongly that the company mentioned In the highlighted text
A) was less concerned with prevailing market trends than was its dominant competitor
B) was in a position to take over the leading market position from its dominant competitor C) understood which strategy Its dominant competitor was likely to follow
D) received little negative feedback based on concerns about high-fat diets
E) refrained from developing a comprehensive resource-based view of marketing strategy
[spoiler]OA:C[/spoiler]
One key to predicting a competitor's strategies is understanding how much that competitor resembles your company. Within a market, companies that resemble each other tend to pursue similar business strategies-called symmetric competition. Companies that have different assets, resources, capabilities, and positions within a market will likely also have different responses to market conditions-called asymmetric competition.
In the fast-food industry, for example, two players faced the same market trends, resulting from the public's concerns about high-fat diets, but responded in markedly different ways. The dominant player, as the target of consumer backlash, introduced a variety of foods It promoted as healthy. The other, foreseeing this move, saw an opportunity to find market share in the less health-conscious fast-food segment and so introduced high-fat, high-calorie sandwiches supported by aggressive, defiant ads.
Your company can anticipate competitors' actions by using a resource-based view of strategy: the idea that companies protect, extend, build, or acquire resources and capabilities that are valuable, rare, and successfully exploitable. Applying this view in a systematic way helps identify the options competitors will likely consider for any strategic Issue. However, determining which options competitors are likeliest to choose also requires moving beyond resource analysis to understanding the personal perceptions and Incentives of competitors' decision makers.
1)The passage refers to the public's concerns about high-fat diets primarily to
A) provide an example of a type of market trend that affects some companies more than others
B) suggest that these concerns have increased competition in the fast-food industry
C) provide evidence that symmetric competition does not typically exist in the fast-food market
D)help provide an example of how companies within an industry reacted to the same market trend
E)suggest that market trends are sometimes altered by the marketing strategies of the companies reacting to them
[spoiler]OA:D[/spoiler]
2)The primary purpose of the passage is to
A) take a stand on a debate regarding business competition
B) offer recommendations on business strategies to company managers
C) describe the reactions of two companies to a particular market trend
D) analyze a type of business strategy used by companies
E) call into question prevailing beliefs within the marketing industry
[spoiler]OA:B[/spoiler]
3)The passage suggests most strongly that the company mentioned In the highlighted text
A) was less concerned with prevailing market trends than was its dominant competitor
B) was in a position to take over the leading market position from its dominant competitor C) understood which strategy Its dominant competitor was likely to follow
D) received little negative feedback based on concerns about high-fat diets
E) refrained from developing a comprehensive resource-based view of marketing strategy
[spoiler]OA:C[/spoiler]
