GMAT Question of the Day - Daily to your Mailbox; hard ones only

 It is currently 17 Aug 2019, 07:55

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# One key to predicting a competitor's strategies

 new topic post reply Question banks Downloads My Bookmarks Reviews Important topics
Author Message
TAGS:

### Hide Tags

Director
Joined: 06 Jan 2015
Posts: 700
Location: India
Concentration: Operations, Finance
GPA: 3.35
WE: Information Technology (Computer Software)
One key to predicting a competitor's strategies  [#permalink]

### Show Tags

Updated on: 06 Aug 2019, 03:48
2
Question 1
00:00

based on 327 sessions

88% (02:41) correct 12% (03:07) wrong

### HideShow timer Statistics

Question 2
00:00

based on 327 sessions

51% (00:58) correct 49% (00:55) wrong

### HideShow timer Statistics

Question 3
00:00

based on 323 sessions

77% (01:09) correct 23% (01:18) wrong

### HideShow timer Statistics

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

_________________
आत्मनॊ मोक्षार्थम् जगद्धिताय च

Resource: GMATPrep RCs With Solution

Originally posted by NandishSS on 11 Apr 2018, 19:51.
Last edited by SajjadAhmad on 06 Aug 2019, 03:48, edited 2 times in total.
Director
Joined: 20 Sep 2016
Posts: 639
Location: India
Concentration: Strategy, Operations
GPA: 3.95
WE: Operations (Real Estate)
Re: One key to predicting a competitor's strategies  [#permalink]

### Show Tags

13 Jun 2018, 23:14
4
2
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.
##### General Discussion
Intern
Joined: 30 Nov 2017
Posts: 35
Re: One key to predicting a competitor's strategies  [#permalink]

### Show Tags

13 Jun 2018, 11:08
Which highlighted text does question 3 refer to? Can someone please help.
Intern
Joined: 24 Apr 2016
Posts: 10
Re: One key to predicting a competitor's strategies  [#permalink]

### Show Tags

13 Jun 2018, 17:55
can someone tell me why option D is not correct for question number 2 ?
Director
Joined: 20 Sep 2016
Posts: 639
Location: India
Concentration: Strategy, Operations
GPA: 3.95
WE: Operations (Real Estate)
Re: One key to predicting a competitor's strategies  [#permalink]

### Show Tags

13 Jun 2018, 23:28
3
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
Intern
Joined: 13 Jun 2018
Posts: 23
Re: One key to predicting a competitor's strategies  [#permalink]

### Show Tags

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.
GMAT Club Verbal Expert
Joined: 20 Nov 2016
Posts: 264
Re: One key to predicting a competitor's strategies  [#permalink]

### Show Tags

05 Jul 2018, 09:23
Thanks AdityaHongunti and goofytiwari69 for the explanations!

To post additional questions not already addressed in this thread, feel free to use the request verbal experts' reply button.
_________________
Director
Joined: 24 Oct 2016
Posts: 500
GMAT 1: 670 Q46 V36
GMAT 2: 690 Q47 V38
Re: One key to predicting a competitor's strategies  [#permalink]

### Show Tags

25 Sep 2018, 15:40
Easy Passage! Took 8 min in total but got 3/3 correct.
_________________

If you found my post useful, KUDOS are much appreciated. Giving Kudos is a great way to thank and motivate contributors, without costing you anything.
Intern
Joined: 06 Apr 2018
Posts: 38
Re: One key to predicting a competitor's strategies  [#permalink]

### Show Tags

30 May 2019, 04:13
Hi,

I got the third question incorrect. I choose option A as the answer to this question. And the reason I did that was because company A responded by introducing a number of high fat products as opposed to the market trends.
So it looked it its response was more dependent on the strategy followed by the dominant company. Which means it was less concerned with prevailing market trends than was its dominant competitor. ( I interpreted this as it was less concerned with the prevailing market trends as compared to how concerned it was about its compitetors strategy)

And for a moment I thought that Answer C was the correct answer choice. But since C used the word likely I rejected the same. The company already knew which strategy its compitetor is following so why use the word likely.

Please let me know where am I going wrong in my reasoning. I am ready to accept that Answer A is a incorrect choice however I need a reason to select choice C. Please guide.
GMAT Club Verbal Expert
Status: GMAT and GRE tutor
Joined: 13 Aug 2009
Posts: 2762
Location: United States
GMAT 1: 780 Q51 V46
GMAT 2: 800 Q51 V51
GRE 1: Q170 V170
Re: One key to predicting a competitor's strategies  [#permalink]

### Show Tags

04 Jun 2019, 08:27
givinggmat wrote:
Hi,

I got the third question incorrect. I choose option A as the answer to this question. And the reason I did that was because company A responded by introducing a number of high fat products as opposed to the market trends.
So it looked it its response was more dependent on the strategy followed by the dominant company. Which means it was less concerned with prevailing market trends than was its dominant competitor. ( I interpreted this as it was less concerned with the prevailing market trends as compared to how concerned it was about its compitetors strategy)

And for a moment I thought that Answer C was the correct answer choice. But since C used the word likely I rejected the same. The company already knew which strategy its compitetor is following so why use the word likely.

Please let me know where am I going wrong in my reasoning. I am ready to accept that Answer A is a incorrect choice however I need a reason to select choice C. Please guide.

Question #3 asks what the passage suggests about the non-dominant company facing a market trend of public concern about high fat diets.

Let's first take a look at (A):
Quote:
A) was less concerned with prevailing market trends than was its dominant competitor

On a surface level, this option is tempting -- after all, the company responded to a health-conscious market trend by offering high fat sandwiches. It seems like they don't care too much about the trend, right?

Except look at how the company made this strategic decision: it foresaw that its competitor would offer a variety of healthy (or seemingly healthy) new options, and then "saw an opportunity to find market share in the less health-conscious fast-food segment." So, even though the non-dominant company reacts to the trend in a surprising way, its decision was still a reaction to the trend. Far from being less concerned about the trend, the non-dominant company is highly concerned about the trend, its competitor's reaction to the trend, and how it can use these conditions to increase its market share.

Note: Interpreting (A) to say that the non dominant company was "less concerned with the prevailing market trends as compared to how concerned it was about its competitor's strategy" significantly changes the meaning of the answer choice. The comparison is not between two potential concerns of the non-dominant company, but rather between the two companies' levels of concern about the market trend. Because the decisions of both companies can be tied back to the market trend, we cannot say that the non dominant company was less concerned than the dominant company.

(A) is out.

Now look at (C):
Quote:
C) understood which strategy Its dominant competitor was likely to follow

As explained above, the non-dominant company formulated its reaction to the market trend by anticipating what the dominant company would do.

The word "likely" is necessary (or at least not problematic) because of the timeline laid out by the author. While the passage was written after these events took place, the companies made their decisions in the middle of the events themselves. The non-dominant company had to foresee the actions of the dominant company, which inherently adds doubt to their analysis. (C) is the correct answer.

I hope that helps!
_________________
GMAT/GRE tutor @ www.gmatninja.com (we're hiring!) | GMAT Club Verbal Expert | Instagram | Blog | Bad at PMs

Beginners' guides to GMAT verbal: RC | CR | SC

YouTube LIVE verbal webinars: Series 1: Fundamentals of SC & CR | Series 2: Developing a Winning GMAT Mindset

SC & CR Questions of the Day (QOTDs), featuring expert explanations: All QOTDs | Subscribe via email | RSS

Need an expert reply? Hit the request verbal experts' reply button; be specific about your question, and tag @GMATNinja. Priority is always given to official GMAT questions.

SC articles & resources: How to go from great (760) to incredible (780) on GMAT SC | That "-ing" Word Probably Isn't a Verb | That "-ed" Word Might Not Be a Verb, Either | No-BS Guide to GMAT Idioms | "Being" is not the enemy | WTF is "that" doing in my sentence?

RC, CR, and other articles & resources: All GMAT Ninja articles on GMAT Club | Using LSAT for GMAT CR & RC |7 reasons why your actual GMAT scores don't match your practice test scores | How to get 4 additional "fake" GMAT Prep tests for \$29.99 | Time management on verbal
Director
Joined: 14 Feb 2017
Posts: 896
Location: Australia
Concentration: Technology, Strategy
Schools: LBS '22
GMAT 1: 560 Q41 V26
GMAT 2: 550 Q43 V23
GMAT 3: 650 Q47 V33
GMAT 4: 650 Q44 V36
WE: Management Consulting (Consulting)
Re: One key to predicting a competitor's strategies  [#permalink]

### Show Tags

06 Aug 2019, 02:48
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.

This is wrong.

It looks as if you're merely justifying the answer here.

The author doesn't recommend "a new one". He discusses the strategy in P1, gives an example of it in P2, and informs the reader on how to actually implement the strategy - "You can <IMPLEMENT THE STRATEGY I DISCUSSED IN P1> by < DOING THIS> (using a resource based view)."

There's also a typo in the last paragraph - its missing "The".

Q2 - primary purpose
A - is incorrect. Clearly there is no debate nor stand taken.
B - is correct because the last paragraph clearly highlights the purpose. "Your company can <DO THIS TOO!>". I think its fairly presumptuous of this answer choice to label "managers" since "managers" aren't really mentioned anywhere, but the fact the author is mentioning "your company" should be sufficient to indicate some seniority - I actually thought CEO/ Business owner at first.

The general passage goes like this:
P1: discuss a strategy -compare your company to competitors
P2: discuss its application with use of an example
p3: make recommendation to use said strategy and propose a method for incorporating it (Resource based view)

C - false. Two companies are discussed in relation to a market trend as an example of the strategy recommended.
D - the passage doesn't really analyse as much as propose the strategy. To analyse is to really put something under a magnifying glass and review it in some great depth. P1 discusses the strategy briefly, P2 provides an example of this, and P3 recommends a method of implementing this strategy. For this reason, the passage does not analyse the strategy and is thus incorrect.

FYI here's the google definition for analyse:
examine (something) methodically and in detail, typically in order to explain and interpret it.

E - no prevailing beliefs are mentioned and nothing is called into question. Incorrect.
_________________
Goal: Q49, V41

+1 Kudos if you like my post pls!
Re: One key to predicting a competitor's strategies   [#permalink] 06 Aug 2019, 02:48
Display posts from previous: Sort by

# One key to predicting a competitor's strategies

 new topic post reply Question banks Downloads My Bookmarks Reviews Important topics

 Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne