How a company is situated relative to its competitors is referred to as Mcq?

Latest Business Competition MCQ Objective Questions

Business Competition Question 1:

Which of the following is/are the purpose of competitive review?

1. Identify key competitors
2. Describe the market positions of key competitors
3. Briefly discuss the Strategies of the competitors
4. To improve our own Position in terms of product quality and marketing Position
5. All of the above

Answer (Detailed Solution Below)

Option 5 : All of the above

The correct answer is All of the Above

• A competitive review or competitive analysis is a strategy for identifying and assessing competitors.
• A competitor analysis is used to assess the strengths and weaknesses of a competitor's product in comparison to your own.

• Identifying key competitors:- Competitive analysis helps an organisation to identify with whom are they in direct and indirect competition. It helps to ascertain the key competitors of the firm. 
• Market positions of key competitors:- Competitive analysis will allow the firm to gather data regarding the market position of its competitors. It helps the organisation to find how severe is competition.
• Strategies of the competitors:- Through Competitive analysis the firms can discuss the marketing strategies used by the competitors. This helps to prepare counter strategies for the firm to survive competition.
• To improve our own Position:- Through Competitive analysis firms can improve their position in the market. Firms can improve their market position by improving product in terms of quality, performance etc.

Business Competition Question 2:

Competitors focus on a market segment where they can meet customer needs in a superior way than their direct competitors. Which of the following conditions is prevalent in that industry?

1. Pure monopoly
2. Oligopoly
3. Monopolistic competition
4. Pure competition
5. None of the above

Answer (Detailed Solution Below)

Option 3 : Monopolistic competition

The correct answer is- Monopolistic competition.

• In monopolistic competition, competitors focus on a market segment where they can meet customers' needs in a superior way and command a price premium.
• Monopolistic competition describes an industry in which a large number of enterprises compete for the same (but not identical) products or services.
• In a monopolistic competitive industry, entry and exit barriers are low, and one firm's decisions have little impact on its competitors.
• Monopolistic competition is intimately linked to the brand differentiation business strategy.

• A large number of firms:
  • The first distinguishing aspect of monopolistic competition is that it involves a large number of enterprises, each supplying a little portion of the product's market demand. Due to the enormous number of enterprises that are subject to monopolistic competition, there is fierce competition among them.
• Product differentiation:
  • The second unique aspect of monopolistic competition is that the products produced by different enterprises are not similar but differ slightly. Despite the fact that different companies create their products slightly differently, they are close equivalents for one another.
• Some influence over the price:
  • Under monopolistic competition, each firm creates a product variety that is a close alternative for others. As a result, if a company decreases the price of one of its product variants, some customers from other product types will switch.
• Freedom of entry and exit:

  • Another essential element of monopolistic competition is the absence of price competition. It is easy for new enterprises to enter and existing firms to depart a monopolistically competitive industry. When current enterprises in the industry make above-average profits, new firms enter the market, resulting in increased output.

Hence, the correct answer is- Competitors focus on a market segment where they can meet customer needs in a superior way. Monopolistic competition conditions are prevalent in that industry

Business Competition Question 3:

Which of the following is a guideline to deal with colleagues?

1. Try to give positive criticism to competitive co-workers.
2. Always correct the co-workers.
3. Make competition a self-respect question.
4. Take competition positively, not personally.

Answer (Detailed Solution Below)

Option 4 : Take competition positively, not personally.

The correct answer is to take competition positively, not personally.

Taking competition positive, not personally-

It is an accepted fact that competition exists in every organization, but it is important to treat this competition in a positive manner. There is both positive and negative competition in every organization, depending on the way it is treated. When employees compete in this positive way, they aren’t rooting for others to fail or become obsessed with winning at all costs. It is realized that the employees aren’t “good” or “bad” and that the result doesn’t determine the value as human beings. Of course, they may “win,” or they may “lose” the competition they are engaged in, and there are times when the outcome has a significant impact and is important. Positive competition is about growth, grit, and taking the employee and the team to the next level.

1. Try to give positive criticism to competitive co-workers- This is not a guideline to be considered in dealing the colleagues. The reason being criticism given by co-workers is often considered as an intrusion rather than a guideline.
2. Always correct the co-workers- Correcting the co-workers is incorrect because it is the job of the manager or the head and not the worker. This is not a guideline because it is often considered interference by co-workers.
3. Make competition a self-respect question- As discussed, competition is both positive and negative so competition should always be treated as a healthy activity and not a question of self-respect.

Business Competition Question 4:

_______ refers to the level of threats and challenges faced by an organization from other organizations.

1. Competition
2. Strategy
3. Plan
4. Objective

Answer (Detailed Solution Below)

Option 1 : Competition

Competition refers to the level of threats and challenges faced by an organization from other organizations.

• Competition is the rivalry between companies selling similar products and services with the goal of achieving revenue, profit, and market share growth.
• Market competition motivates companies to increase sales volume by utilizing the four components of the marketing mix, also referred to as the four P. These P's stand for product, place, promotion, and price.
• Competition for a company is a threat perceived by it because of the challenges thrown against it by the competitors.
• Knowing and understanding your competition is a critical step in designing a successful marketing strategy.
• If you are not aware of who the competition is and knowledgeable about their strengths and weaknesses, it's likely that another firm could enter the picture and provide a competitive advantage, such as product offerings at lower prices or value-added benefits.
• Identifying your competition and staying informed about their products and services is the key to remaining competitive in the market and is crucial to the survival of any business.
• Competition between businesses is defined as, “Rivalry in which every seller tries to get what other sellers are seeking at the same time: sales, profit, and market share by offering the best practicable combination of price, quality, and service.”

1. Strategy: 

• Business strategy can be understood as the course of action or set of decisions that assist the entrepreneurs in achieving specific business objectives.
• It is nothing but a master plan that the management of a company implements to secure a competitive position in the market, carry on its operations, please customers and achieve the desired ends of the business.

2. Plan:

• A business plan is a document that summarizes the operational and financial objectives of a business.
• It is a business's road map to success with detailed plans and budgets that show how the objectives will be realized.
• A business plan is a guide for how a company will achieve its goals.

3. Objectives:

• At their core, business objectives are clear-cut targets that guide business owners and employees to growing their business.
• Compared to goals, business objectives are more specific and measurable.
• One example of a broad business goal is to increase profit margins. A corresponding business objective could then be to improve sales by 10% in six months.

Business Competition Question 5:

The combination of a cartel firm is:

1. One who is working in a particular industry.
2. Whose combined assets account for more than 90 percent of the total assets of the industry.

3. Which controls a major part of the market.

4. The combined benefits of which are huge.

Answer (Detailed Solution Below)

Option 4 : The combined benefits of which are huge.

Cartel Formation:

• A cartel is defined as a group of firms that get together to make output and price decisions.
• The conditions that give rise to an oligopolistic market are also conducive to the formation of a cartel; in particular, cartels tend to arise in markets where there are few firms and each firm has a significant share of the market.
• Cartel is defined in section 2, subsection(c), of the Competition Act, 2002, which states: “Cartel” includes an association of producers, sellers, distributors, traders or service providers who by an agreement among themselves, limit, control, or attempt to control the production, distribution, sale or price of, or, trade in goods or provisions in services.
• Members of a cartel maintain their separate identities and financial independence while engaging in common policies.
• They have a common interest in exploiting the monopoly position that the combination helps to maintain.
• Cartels are competitors in the same industry and seek to reduce that competition by controlling the price in agreement with one another so that the combined benefits are huge than the individual profits.
• For example, OPEC (Organization of Petroleum Exporting Countries), is recognized to function as a cartel that controls the market of oil. OPEC, being multinational, operates legally under the United States foreign trade laws.   

Top Business Competition MCQ Objective Questions

The shut down refers to complete cessation or closing down of the business. It involves which of the following?

i) No buying or selling

ii) No manufacturing

iii) Shifting of business from one place to another place

iv) Assets to be sold or disposed off

v) Returning capital to owners

1. i, ii, iv, v
2. i, ii, iii, iv
3. i, ii, iii, v
4. i, iii, iv, v

Answer (Detailed Solution Below)

Option 1 : i, ii, iv, v

The closure is the term used when a business decides to discontinue or shut down its activities of the organization. A closure may be a result of bankruptcy, where the business has fewer funds to continue its operations, or when some other organization (or a competitor) decides to take over the firm and shut down as superfluous.

Closure can be of two types, voluntary or involuntary where voluntary closures of organizations are much rare as compared to involuntary closures of organization.

The shut down refers to complete cessation or closing down of the business and it involves:

i) No buying or selling of goods and services

ii) No manufacturing of products

iii) Assets to be sold or disposed off to pay the debts of the organization

iv) Returning capital to the owners after the organization decides to liquidate assets.

Therefore, option 1) is the correct answer.  

Select the correct code of the following statements being correct or incorrect.

Statement (I) : The ‘law of one price’ states that in competitive markets free of transportation costs and barriers to trade, identical products sold in different countries must sell for the same price when their price is expressed in terms of the same currency.

Statement (II) : An ‘Efficient market’ has no impediments to the free flow of goods and services, such as trade barriers.

1. Statement (I) is correct but (II) is incorrect.
2. Statement (II) is correct but (I) is incorrect
3. Both statements (I) and (II) are correct.
4. Both statements (I) and (II) are incorrect.

Answer (Detailed Solution Below)

Option 3 : Both statements (I) and (II) are correct.

The ‘law of one price’ states that in competitive markets free of transportation costs and barriers to trade, identical products sold in different countries must sell for the same price when their price is expressed in terms of the same currency.

An ‘Efficient market’ has no impediments to the free flow of goods and services, such as trade barriers.

Both statements are correct.

• The law of one price is an economic concept that states that the price of an identical asset or commodity will have the same price globally, regardless of location, when certain factors are considered.
• The law of one price takes into account a frictionless market, where there are no transaction costs, transportation costs, or legal restrictions, the currency exchange rates are the same, and that there is no price manipulation by buyers or sellers. 
• An efficient market has no impediments to the free flow of goods and services, such as trade barriers, and prices reflect all available public information. By comparing the prices of identical products in different currencies, it would be possible to determine the "real" or PPP exchange rate that would exist if markets were efficient.

Which one of the following is not true for introducing multiple brands in a category?

1. Increasing shelf presence and retailer dependence in the strore

2. Attracting consumer seeking variety who many otherwise have switched to another brand

3. Decreasing internal competition within the firm

4. Yielding economies of scale in advertising, sales, merchandising and physical distribution

Answer (Detailed Solution Below)

Option 3 :

Decreasing internal competition within the firm

Decreasing internal competition within the firm is not true for introducing multiple brands in a category because multiple brands in a category always increase competition within the firm.

Explanation:

Multi-brand strategy

A business strategy involving a company marketing several similar products as competitors, each with their own individual brand name. A Multi-brand strategy does have some advantages as a way of securing greater shelf space with little remaining for rival products. This strategy also allows for saturating a market by occupying all price and quality vacancies.

Some reasons to introduce multiple brands in a category include:

1. To increase shelf presence and retailer dependence in the store
2. To attract consumers seeking variety who may otherwise have switched to another brand.
3. To increase internal competition within the firm
4. To yield economies of scale in advertising, sales, merchandising, and physical distribution.

Therefore, decreasing internal competition within the firm is not true for introducing multiple brands in a category.

Which of the following is a guideline to deal with colleagues?

1. Try to give positive criticism to competitive co-workers.
2. Always correct the co-workers.
3. Make competition a self-respect question.
4. Take competition positively, not personally.

Answer (Detailed Solution Below)

Option 4 : Take competition positively, not personally.

The correct answer is to take competition positively, not personally.

Taking competition positive, not personally-

It is an accepted fact that competition exists in every organization, but it is important to treat this competition in a positive manner. There is both positive and negative competition in every organization, depending on the way it is treated. When employees compete in this positive way, they aren’t rooting for others to fail or become obsessed with winning at all costs. It is realized that the employees aren’t “good” or “bad” and that the result doesn’t determine the value as human beings. Of course, they may “win,” or they may “lose” the competition they are engaged in, and there are times when the outcome has a significant impact and is important. Positive competition is about growth, grit, and taking the employee and the team to the next level.

1. Try to give positive criticism to competitive co-workers- This is not a guideline to be considered in dealing the colleagues. The reason being criticism given by co-workers is often considered as an intrusion rather than a guideline.
2. Always correct the co-workers- Correcting the co-workers is incorrect because it is the job of the manager or the head and not the worker. This is not a guideline because it is often considered interference by co-workers.
3. Make competition a self-respect question- As discussed, competition is both positive and negative so competition should always be treated as a healthy activity and not a question of self-respect.

Business Competition Question 10:

The combination of a cartel firm is:

1. One who is working in a particular industry.
2. Whose combined assets account for more than 90 percent of the total assets of the industry.

3. Which controls a major part of the market.

4. The combined benefits of which are huge.

Answer (Detailed Solution Below)

Option 4 : The combined benefits of which are huge.

Cartel Formation:

• A cartel is defined as a group of firms that get together to make output and price decisions.
• The conditions that give rise to an oligopolistic market are also conducive to the formation of a cartel; in particular, cartels tend to arise in markets where there are few firms and each firm has a significant share of the market.
• Cartel is defined in section 2, subsection(c), of the Competition Act, 2002, which states: “Cartel” includes an association of producers, sellers, distributors, traders or service providers who by an agreement among themselves, limit, control, or attempt to control the production, distribution, sale or price of, or, trade in goods or provisions in services.
• Members of a cartel maintain their separate identities and financial independence while engaging in common policies.
• They have a common interest in exploiting the monopoly position that the combination helps to maintain.
• Cartels are competitors in the same industry and seek to reduce that competition by controlling the price in agreement with one another so that the combined benefits are huge than the individual profits.
• For example, OPEC (Organization of Petroleum Exporting Countries), is recognized to function as a cartel that controls the market of oil. OPEC, being multinational, operates legally under the United States foreign trade laws.   

Business Competition Question 11:

The stages of a turnaround process are

1. Realignment, Retrenchment, Recovery
2. Realignment, Stabilize, Recovery
3. Reassess, Stabilize, Survival
4. Reassess, Retrenchment, Survival

Answer (Detailed Solution Below)

Option 1 : Realignment, Retrenchment, Recovery

Turnaround strategy is a strategy followed by a company when it feels that the decision made earlier was wrong and it needs to be undone before it damages the profitability of the organization. It refers to simply backing out from the original decision made and transforming from a loss-making company to a profit-making company.

3 Stages of Turnaround process:

1. The Turnaround Process begins with a depiction of external and internal factors as causes of a firm’s performance downturn.
2. If these factors continue to detrimentally impact the firm, its financial health is threatened.
3. Unchecked financial decline places the firm in a turnaround situation.
4. A turnaround situation represents the absolute and relative-to-industry declining performance of a sufficient magnitude to warrant explicit turnaround actions. A turnaround is typically accomplished through a two-stage process.
5. The initial stage is focused on the primary objectives of survival and achievement of a positive cash flow. The means to achieve this objective involves an emergency plan to halt the firm’s financial hemorrhage and a stabilization plan to streamline and improve core operations. This stage is known as the realignment phase.
6. In other words, it involves the classic retrenchment activities: liquidation, divestment, product elimination, and downsizing the workforce. Retrenchement strategies are also characterized by revenue-generating, product/market refocusing, or cost-cutting and asset reduction activities. 
7. The second phase involves a return-to-growth or recovery stage, and the turnaround process shifts away from retrenchment and moves towards growth and development and growth in market share. The means employed for achieving these objectives are acquisitions, new products, new markets, and increased market penetration.

Therefore, the stages of a turnaround process are Realignment, Retrenchment, Recovery.

Business Competition Question 12:

The shut down refers to complete cessation or closing down of the business. It involves which of the following?

i) No buying or selling

ii) No manufacturing

iii) Shifting of business from one place to another place

iv) Assets to be sold or disposed off

v) Returning capital to owners

1. i, ii, iv, v
2. i, ii, iii, iv
3. i, ii, iii, v
4. i, iii, iv, v

Answer (Detailed Solution Below)

Option 1 : i, ii, iv, v

The closure is the term used when a business decides to discontinue or shut down its activities of the organization. A closure may be a result of bankruptcy, where the business has fewer funds to continue its operations, or when some other organization (or a competitor) decides to take over the firm and shut down as superfluous.

Closure can be of two types, voluntary or involuntary where voluntary closures of organizations are much rare as compared to involuntary closures of organization.

The shut down refers to complete cessation or closing down of the business and it involves:

i) No buying or selling of goods and services

ii) No manufacturing of products

iii) Assets to be sold or disposed off to pay the debts of the organization

iv) Returning capital to the owners after the organization decides to liquidate assets.

Therefore, option 1) is the correct answer.  

Business Competition Question 13:

Measures that are essentially involved in rationalising business are

1. Downsizing and delayering
2. Expanding and delayering
3. Reducing the volume of business
4. Reducing the number of products

Answer (Detailed Solution Below)

Option 1 : Downsizing and delayering

Rationalization of business:

• Rationalization is a concept that was developed by Max Weber.
• Rationalization means thinking reasonably in a particular way.
• In other words, instead of human behavior is motivated by customs and traditions, rationalization led to behaviors, that were guided by reason and practicality.
• In business, rationalization is a process or reorganization concept that is implemented to boost efficiency and productivity.
• In the corporate world, this term is also used for closing down or selling off some units of the business to adjust the operational structure so that it can be in sync with core competencies.
• Measures that are essentially involved in rationalizing business are downsizing and delayering of the firm or in making structural changes that result in improved productivity.
• Rationalization is a process that every business entity considers important as it helps in minimizing costs and increasing revenues to increase the bottom line of the financial statement.
• According to Bombay Textile Labour Inquiry Committee 1941, rationalization has three aims:
  • Increase in production per man and machine and its relation to wages;
  • Improvement in the efficiency of workers and in the working conditions; 
  • Financial and Industrial re-organization.

Therefore, measures that are essentially involved in rationalizing business are downsizing and delayering.

Business Competition Question 14:

Select the correct code of the following statements being correct or incorrect.

Statement (I) : The ‘law of one price’ states that in competitive markets free of transportation costs and barriers to trade, identical products sold in different countries must sell for the same price when their price is expressed in terms of the same currency.

Statement (II) : An ‘Efficient market’ has no impediments to the free flow of goods and services, such as trade barriers.

1. Statement (I) is correct but (II) is incorrect.
2. Statement (II) is correct but (I) is incorrect
3. Both statements (I) and (II) are correct.
4. Both statements (I) and (II) are incorrect.

Answer (Detailed Solution Below)

Option 3 : Both statements (I) and (II) are correct.

The ‘law of one price’ states that in competitive markets free of transportation costs and barriers to trade, identical products sold in different countries must sell for the same price when their price is expressed in terms of the same currency.

An ‘Efficient market’ has no impediments to the free flow of goods and services, such as trade barriers.

Both statements are correct.

• The law of one price is an economic concept that states that the price of an identical asset or commodity will have the same price globally, regardless of location, when certain factors are considered.
• The law of one price takes into account a frictionless market, where there are no transaction costs, transportation costs, or legal restrictions, the currency exchange rates are the same, and that there is no price manipulation by buyers or sellers. 
• An efficient market has no impediments to the free flow of goods and services, such as trade barriers, and prices reflect all available public information. By comparing the prices of identical products in different currencies, it would be possible to determine the "real" or PPP exchange rate that would exist if markets were efficient.

Business Competition Question 15:

Which of the following is/are the purpose of competitive review?

1. Identify key competitors
2. Describe the market positions of key competitors
3. Briefly discuss the Strategies of the competitors
4. To improve our own Position in terms of product quality and marketing Position
5. All of the above

Answer (Detailed Solution Below)

Option 5 : All of the above

The correct answer is All of the Above

• A competitive review or competitive analysis is a strategy for identifying and assessing competitors.
• A competitor analysis is used to assess the strengths and weaknesses of a competitor's product in comparison to your own.

• Identifying key competitors:- Competitive analysis helps an organisation to identify with whom are they in direct and indirect competition. It helps to ascertain the key competitors of the firm. 
• Market positions of key competitors:- Competitive analysis will allow the firm to gather data regarding the market position of its competitors. It helps the organisation to find how severe is competition.
• Strategies of the competitors:- Through Competitive analysis the firms can discuss the marketing strategies used by the competitors. This helps to prepare counter strategies for the firm to survive competition.
• To improve our own Position:- Through Competitive analysis firms can improve their position in the market. Firms can improve their market position by improving product in terms of quality, performance etc.

How a company is situated relative to its competitor is referred to as?

What face best describes the information gathered by a firm to learn about its competitor?

What is competitive intelligence How important is it in business?

Which industry type is characterized by a large number of firms of approximately equal size Mcq?