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Why Is Michael Port's Two Proposed Competitive Strategy

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ANSWER KEY:

1. Michael Port's two proposed competitive strategies for outperforming other corporations in a particular industry are lower cost and higher efficiency strategy.

A) True

*B) False

Rationale: On page 78 (Hunger & Wheelen, 2011), Michael Porter's two proposed generic competitive strategies for outperforming other corporations in a particular industry were lower cost and differentiation. These strategies can be pursued by any type or size of business firm.

2. Higher barriers to entry can be the result of hypercompetition in an industry.

*A) True

B) False

Rationale: On page 82 (Hunger & Wheelen, 2011), D'Aveni contends that when indurstries become hypercompetitive, they tend to go through escalating stages of competition. Firms then raise entry barriers to limit competitors. Economies of scale, distribution agreements, and strategic alliances now make it but impossible for a …show more content…

Joint ventures have a very high success rate because of the flexibility they provide for corporations.

A) True

*B) False

Rationale: One page 86 (Hunger & Wheelen, 2011), joint ventures, licensing agreements, and value-chain partnerships are discussed. While joint ventures the most popular form of strategic alliance, its failure rate is very high. Joint ventures are often meant to be temporary, especially by some companies who may view them as a way to rectify a competitive weakness until they can achieve long-term dominance in the partnership.

4. Guerrilla warfare can be used by small firms to make gains without having to worry about retaliation from larger firms.

*A) True

B) False

Rationale: On page 84 (Hunger & Wheelen, 2011), guerrilla warefare is described as a "hit and run" attack on competitors. The small attacks allow new entrants or small firms to make gains without seriously threatening a large, established competitor and evoking retaliation.

5. Porter argues that to be successful, a company must achieve one of the competitive

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