1. When a firm chooses not to react against a competitor's threat is called forbearance. A concept, closely aligned with forbearance is co-opetition; which refers to the combination of both competition and cooperation.
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2. When a firm shifts its value creating activity from a domestics location to a foreign location it is said that it is applying an offshoring strategy. In contrast, when a firm is using other firms to perform a value creation activity, then, this is called outsourcing.
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3. Strategies do not last forever, and industries go through life cycles. In so far life cycles is concerned, these apply: decline, maturity, growth, and introduction. Knowing the differences between these stages is important, because managers must strive to emphasize the key functional areas during each of these stages and to attain a level of parity in all functional areas and value-creating activities. By applying these premises we can then conclude that the emphasis on product design would be low in the decline stage, low to moderate in maturity stage, but highest in introduction stage.
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False