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One key to predicting a competitor's strategies

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One key to predicting a competitor's strategies  [#permalink]

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New post Updated on: 13 Jun 2018, 20:03
Question 1
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Question Stats:

88% (02:00) correct 13% (01:53) wrong based on 152

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Question 2
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Question Stats:

41% (00:45) correct 59% (00:32) wrong based on 148

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Question 3
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Question Stats:

76% (00:49) correct 24% (01:17) wrong based on 139

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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

OA:D





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

OA:B




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

OA:C


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Originally posted by NandishSS on 11 Apr 2018, 19:51.
Last edited by NandishSS on 13 Jun 2018, 20:03, edited 1 time in total.
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Re: One key to predicting a competitor's strategies  [#permalink]

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New post 13 Jun 2018, 11:08
Which highlighted text does question 3 refer to? Can someone please help.
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New post 13 Jun 2018, 17:55
can someone tell me why option D is not correct for question number 2 ?
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New post 13 Jun 2018, 23:14
1
bubbly2010 wrote:
can someone tell me why option D is not correct for question number 2 ?


I'll b glad to help-

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. --meaning-- existing strategy has been introduced.

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.-- meaning-- This paragraph is just an example of the last sentence of the 1st paragraph(Companies that have different assets, resources, capabilities, and positions within a market will likely also have different responses to market conditions)

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 maker-- meaning-- author's POV, recommending a different strategy.


2)The primary purpose of the passage is to

A) take a stand on a debate regarding business competition - no stand

B) offer recommendations on business strategies to company managers -- Correct- This is the main idea of the passage. The author just introduces the current strategy exemplifies it and then provides his recommendations for a new one. So the recommendation is the main idea.

C) describe the reactions of two companies to a particular market trend - useless

D) analyze a type of business strategy used by companies--your probable reasoning--You summarised 1st para>>summarised 2nd para> summarised 3rd para. Your reasoning must have been that the author introduces a topic , exemplifies it and then suggests a new one. What you did not understand is that the significance of second paragraph as a whole is not worthy. The 2nd para is just an example of a phenomenon. Exclude the 2nd para and the passage still makes sense. You wouldnt have chosen this option if the second para was itself a part of the 1st para . Then you wouldve understood the insignificance of it. If you exclude the 2nd para and then read the entire passage you will understand the ACTUAL MAIN POINT of passage.Remember that examples are provided by the author only to strengthen his main idea .( a small tip--when u see the word ANALYSE in the ans choice make sure the passage is talking about the advantages and disadvantages of a topic and then providing his conclusion about that topic)

E) call into question prevailing beliefs within the marketing industry. - no limitations of the current one are mentioned.

hope this clears your doubt.
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Re: One key to predicting a competitor's strategies  [#permalink]

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New post 13 Jun 2018, 23:28
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Nived wrote:
Which highlighted text does question 3 refer to? Can someone please help.


highlighted text " the other " in second paragraph
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.

Basically "the other " company understood what strategy the initial company has implemented towards the market trend and hence the "the other company " implements a strategy to enter into opposite market that is the market where consumers are less health conscious. Summary- "the other" company understood the initial company's probable strategy and used this knowledge wisely. And this entire paragraph tries to show how companies react differently to the same market trend.

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 - it was actually concerned
B) was in a position to take over the leading market position from its dominant competitor-- it entered a different market so no point of comptition.
C) understood which strategy Its dominant competitor was likely to follow - Correct.
D) received little negative feedback based on concerns about high-fat diets - we do not know what feedback it received.
E) refrained from developing a comprehensive resource-based view of marketing strategy-- irrelevant.(the author suggests the resource strategy in later para)



hope this helps
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New post 15 Jun 2018, 00:47
bubbly2010 wrote:
can someone tell me why option D is not correct for question number 2 ?


reading the passage we see that the main topic is to predict competitors stratergy. there is also an example showing how two companies reacted differently. para 3 tells us the ways to predict. we can easily eliminate a,c and e. now option d states that the primary purpose is to analyse business stratergy used by companies , this is a generalised statement ie it doesn't points to the whole passage which is specifically about predicting a competitor's strategies and how to do it.
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New post 05 Jul 2018, 09:23
Thanks AdityaHongunti and goofytiwari69 for the explanations!

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Re: One key to predicting a competitor's strategies &nbs [#permalink] 05 Jul 2018, 09:23
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