Question 1

The various strategies that companies should adopt to win format wars revolve around:

Accepted Answer

A)  getting the federal government to intercede. 
B)  making network effects work in their favor and against their competitors. 
C)  avoiding aggressive marketing and advertising strategies. 
D)  curbing the supply of complementary products. 
E)  charging high license fees. 
A)  getting the federal government to intercede. 
B)  making network effects work in their favor and against their competitors. 
C)  avoiding aggressive marketing and advertising strategies. 
D)  curbing the supply of complementary products. 
E)  charging high license fees.

Question 2

Consumers will bear switching costs if:

Accepted Answer

A)  the benefits of adopting the new technology outweigh the costs of switching. 
B)  switching costs are substantial. 
C)  the new products are packaged attractively. 
D)  there is a lack of complementary products. 
E)  the new technology is advertised subtly. 
A)  the benefits of adopting the new technology outweigh the costs of switching. 
B)  switching costs are substantial. 
C)  the new products are packaged attractively. 
D)  there is a lack of complementary products. 
E)  the new technology is advertised subtly.

Question 3

When standards are part of the public domain, they can be used:

Accepted Answer

A)  only by companies in one particular industry. 
B)  only by federal contractors. 
C)  by paying a fee to the Federal Communications Commission. 
D)  freely by any company. 
E)  only once without payment of a fee. 
A)  only by companies in one particular industry. 
B)  only by federal contractors. 
C)  by paying a fee to the Federal Communications Commission. 
D)  freely by any company. 
E)  only once without payment of a fee.

Question 4

If you were an outside management consultant, how would you advise a firm attempting to win a format war with a powerful and capable competitor? Give several options.

Accepted Answer

One important consideration in winning a

Question 5

Cooperating with competitors:

Accepted Answer

A)  reduces competition in the market. 
B)  creates confusion among customers and often leads them to delay their purchases. 
C)  helps lower the entry barriers of the industry, thus allowing new entrants to bring in their own formats. 
D)  curbs network effects by discouraging complementary products. 
E)  results in the creation of several new formats, thus intensifying format wars. 
A)  reduces competition in the market. 
B)  creates confusion among customers and often leads them to delay their purchases. 
C)  helps lower the entry barriers of the industry, thus allowing new entrants to bring in their own formats. 
D)  curbs network effects by discouraging complementary products. 
E)  results in the creation of several new formats, thus intensifying format wars.

Question 6

Which of the following is a source of competitive advantage for a company and is the basis for the product differentiation that tends to dominate the industry?

Accepted Answer

A)  Paradigm shift 
B)  First mover 
C)  Public domain 
D)  Technical standard 
E)  Dominant design 
A)  Paradigm shift 
B)  First mover 
C)  Public domain 
D)  Technical standard 
E)  Dominant design

Question 7

Cell phone technology is replacing traditional wired phone technology. This is an example of a(n):

Accepted Answer

A)  first-mover advantage. 
B)  technological paradigm shift. 
C)  format war. 
D)  complementary product. 
E)  embryonic industry. 
A)  first-mover advantage. 
B)  technological paradigm shift. 
C)  format war. 
D)  complementary product. 
E)  embryonic industry.

Question 8

An adequate supply of complements to a product can result in:

Accepted Answer

A)  more customers opting for the product. 
B)  higher switching costs. 
C)  a significant decrease in sales of the product. 
D)  a significant decrease in customer demand for the product. 
E)  the company failing to win a format war. 
A)  more customers opting for the product. 
B)  higher switching costs. 
C)  a significant decrease in sales of the product. 
D)  a significant decrease in customer demand for the product. 
E)  the company failing to win a format war.

Question 9

Which of the following correctly describes the events that occur as an industry experiences a technological paradigm shift?

Accepted Answer

A)  R&D investments in a new technology tend to yield rapid improvements and increasing returns, inflection point, diminishing returns to cumulative R&D begin to set in and the rate of improvement in performance slows, technology starts to approach its natural limit, research attention turns to possible alternative technologies 
B)  Inflection point, R&D investments in a new technology tend to yield rapid improvements and increasing returns, diminishing returns to cumulative R&D begin to set in and the rate of improvement in performance slows, technology starts to approach its natural limit, research attention turns to possible alternative technologies 
C)  Technology starts to approach its natural limit, research attention turns to possible alternative technologies. inflection point, R&D investments in a new technology tend to yield rapid improvements and increasing returns, diminishing returns to cumulative R&D begin to set in and the rate of improvement in performance slows 
D)  R&D investments in a new technology tend to yield rapid improvements and increasing returns, diminishing returns to cumulative R&D begin to set in and the rate of improvement in performance slows, inflection point, research attention turns to possible alternative technologies, technology starts to approach its natural limit 
E)  Technology starts to approach its natural limit, inflection point, R&D investments in a new technology tend to yield rapid improvements and increasing returns, diminishing returns to cumulative R&D begin to set in and the rate of improvement in performance slows, research attention turns to possible alternative technologies 
A)  R&D investments in a new technology tend to yield rapid improvements and increasing returns, inflection point, diminishing returns to cumulative R&D begin to set in and the rate of improvement in performance slows, technology starts to approach its natural limit, research attention turns to possible alternative technologies 
B)  Inflection point, R&D investments in a new technology tend to yield rapid improvements and increasing returns, diminishing returns to cumulative R&D begin to set in and the rate of improvement in performance slows, technology starts to approach its natural limit, research attention turns to possible alternative technologies 
C)  Technology starts to approach its natural limit, research attention turns to possible alternative technologies. inflection point, R&D investments in a new technology tend to yield rapid improvements and increasing returns, diminishing returns to cumulative R&D begin to set in and the rate of improvement in performance slows 
D)  R&D investments in a new technology tend to yield rapid improvements and increasing returns, diminishing returns to cumulative R&D begin to set in and the rate of improvement in performance slows, inflection point, research attention turns to possible alternative technologies, technology starts to approach its natural limit 
E)  Technology starts to approach its natural limit, inflection point, R&D investments in a new technology tend to yield rapid improvements and increasing returns, diminishing returns to cumulative R&D begin to set in and the rate of improvement in performance slows, research attention turns to possible alternative technologies

Question 10

Polaroid sells their instant cameras at a lower cost, but their accessories such as filters, lenses and film are priced high to make profits. This is an example of a razor and blade strategy.

Accepted Answer

A) True 
 B)False

Question 11

Network effects arise in industries where:

Accepted Answer

A)  the size of the network of complementary products is a primary determinant of demand for an industry's product. 
B)  a large network of companies in an industry use the same business model and strategies. 
C)  a company adheres to the same technical standards across its network of outlets. 
D)  companies network together and lobby for establishing certain technical standards. 
E)  companies that are not in favor of a technical standard network together. 
A)  the size of the network of complementary products is a primary determinant of demand for an industry's product. 
B)  a large network of companies in an industry use the same business model and strategies. 
C)  a company adheres to the same technical standards across its network of outlets. 
D)  companies network together and lobby for establishing certain technical standards. 
E)  companies that are not in favor of a technical standard network together.

Question 12

When a first mover does not have complementary assets, barriers to imitation are high, and there are several capable competitors, the first mover should:

Accepted Answer

A)  license the innovation to others. 
B)  enter into a joint venture to protect the product. 
C)  lower the barriers for imitation. 
D)  sell the technology outright to another firm. 
E)  wait until competitors develop an alternative product. 
A)  license the innovation to others. 
B)  enter into a joint venture to protect the product. 
C)  lower the barriers for imitation. 
D)  sell the technology outright to another firm. 
E)  wait until competitors develop an alternative product.

Question 13

Which of the following statements is true about technological paradigm shifts?

Accepted Answer

A)  They often do not change the nature of competition in an industry. 
B)  They occur when government regulations restrict the use of certain technologies. 
C)  They have the potential to threaten the survival of established industries. 
D)  They can often be handled by established companies without adopting new strategies. 
E)  They strongly deter new entrants. 
A)  They often do not change the nature of competition in an industry. 
B)  They occur when government regulations restrict the use of certain technologies. 
C)  They have the potential to threaten the survival of established industries. 
D)  They can often be handled by established companies without adopting new strategies. 
E)  They strongly deter new entrants.

Question 14

Which of the following statements is true of technology in industries?

Accepted Answer

A)  Technology in industries is accounting for only a minimal share of economic activity. 
B)  Technology is revolutionizing aspects of the product or production system even in industries not typically considered high-tech. 
C)  High-technology industries are not required to adhere to technical standards to achieve product differentiation. 
D)  The lack of complementary products does not affect the success of a high-technology industry. 
E)  High-technology industries are usually not faced with the challenge of developing business models to achieve a competitive advantage like low-technology industries. 
A)  Technology in industries is accounting for only a minimal share of economic activity. 
B)  Technology is revolutionizing aspects of the product or production system even in industries not typically considered high-tech. 
C)  High-technology industries are not required to adhere to technical standards to achieve product differentiation. 
D)  The lack of complementary products does not affect the success of a high-technology industry. 
E)  High-technology industries are usually not faced with the challenge of developing business models to achieve a competitive advantage like low-technology industries.

Question 15

Consider a cost curve with production volume on the horizontal axis and marginal costs on the vertical axis. What shape would the marginal cost curve most resemble in a high-tech industry?

Accepted Answer

A)  Upward at a 45-degree angle 
B)  U-shape 
C)  Straight and vertical 
D)  J-shape 
E)  Straight and flat 
A)  Upward at a 45-degree angle 
B)  U-shape 
C)  Straight and vertical 
D)  J-shape 
E)  Straight and flat

Question 16

Technical standards do NOT play any role in product differentiation.

Accepted Answer

A) True 
 B)False

Question 17

The goal of finding ways to make network effects work in a company's favor and against competitors can be achieved by:

Accepted Answer

A)  taking the time to build a quality installed base for its standard after several tests and redesigns. 
B)  making sure consumers remain hesitant to bear switching costs. 
C)  focusing on a slow role out and moderating consumer demand. 
D)  leveraging the positive feedback loop. 
E)  relying on other industry members to establish a technological standard or format such that it becomes as quickly as possible as the industry standard. 
A)  taking the time to build a quality installed base for its standard after several tests and redesigns. 
B)  making sure consumers remain hesitant to bear switching costs. 
C)  focusing on a slow role out and moderating consumer demand. 
D)  leveraging the positive feedback loop. 
E)  relying on other industry members to establish a technological standard or format such that it becomes as quickly as possible as the industry standard.

Question 18

Microsoft Word, the word-processing software, was so easy to use and had so many useful features, that no other software could compete with it. Therefore, at the time of its introduction, Microsoft Word could be described as a killer application.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is an advantage of first movers?

Accepted Answer

A)  They are not prone to mistakes. 
B)  They bear lower pioneering costs than later entrants do. 
C)  They only invest in the latest technology. 
D)  They do not run the risk of building the wrong resources as they are highly customer-focused. 
E)  They have an opportunity to exploit network effects and positive feedback loops. 
A)  They are not prone to mistakes. 
B)  They bear lower pioneering costs than later entrants do. 
C)  They only invest in the latest technology. 
D)  They do not run the risk of building the wrong resources as they are highly customer-focused. 
E)  They have an opportunity to exploit network effects and positive feedback loops.

Question 20

With reference to high-technology industries, which of the following is an example of a technical standard?

Accepted Answer

A)  Prices of complementary products 
B)  Medium of advertising used for technology products 
C)  Color of gadgets produced 
D)  Layout of keys on a keyboard 
E)  Number of manufacturing units per industry 
A)  Prices of complementary products 
B)  Medium of advertising used for technology products 
C)  Color of gadgets produced 
D)  Layout of keys on a keyboard 
E)  Number of manufacturing units per industry

The various strategies that companies should adopt to win format wars revolve around:

Consumers will bear switching costs if:

When standards are part of the public domain, they can be used:

If you were an outside management consultant, how would you advise a firm attempting to win a format war with a powerful and capable competitor? Give several options.

Cooperating with competitors:

Which of the following is a source of competitive advantage for a company and is the basis for the product differentiation that tends to dominate the industry?

Cell phone technology is replacing traditional wired phone technology. This is an example of a(n):

An adequate supply of complements to a product can result in:

Which of the following correctly describes the events that occur as an industry experiences a technological paradigm shift?

Polaroid sells their instant cameras at a lower cost, but their accessories such as filters, lenses and film are priced high to make profits. This is an example of a razor and blade strategy.

Network effects arise in industries where:

When a first mover does not have complementary assets, barriers to imitation are high, and there are several capable competitors, the first mover should:

Which of the following statements is true about technological paradigm shifts?

Which of the following statements is true of technology in industries?

Consider a cost curve with production volume on the horizontal axis and marginal costs on the vertical axis. What shape would the marginal cost curve most resemble in a high-tech industry?

Technical standards do NOT play any role in product differentiation.

The goal of finding ways to make network effects work in a company's favor and against competitors can be achieved by:

Microsoft Word, the word-processing software, was so easy to use and had so many useful features, that no other software could compete with it. Therefore, at the time of its introduction, Microsoft Word could be described as a killer application.

Which of the following is an advantage of first movers?

With reference to high-technology industries, which of the following is an example of a technical standard?

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: the Identification of Opportunities and Threats

Internal Analysis: Resources and Competitive Advantage

Competitive Advantage Through Functional-Level Strategies

Business-Level Strategy

Business-Level Strategy and the Industry Environment

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate-Level Strategy: Related and Unrelated Diversification

Corporate Governance, Social Responsibility, and Ethics

Implementing Strategy Through Organization

Filters

Exam 7: Strategy and Technology

The various strategies that companies should adopt to win format wars revolve around:

Consumers will bear switching costs if:

When standards are part of the public domain, they can be used:

If you were an outside management consultant, how would you advise a firm attempting to win a format war with a powerful and capable competitor? Give several options.

Cooperating with competitors:

Which of the following is a source of competitive advantage for a company and is the basis for the product differentiation that tends to dominate the industry?

Cell phone technology is replacing traditional wired phone technology. This is an example of a(n):

An adequate supply of complements to a product can result in:

Which of the following correctly describes the events that occur as an industry experiences a technological paradigm shift?

Polaroid sells their instant cameras at a lower cost, but their accessories such as filters, lenses and film are priced high to make profits. This is an example of a razor and blade strategy.

Network effects arise in industries where:

When a first mover does not have complementary assets, barriers to imitation are high, and there are several capable competitors, the first mover should:

Which of the following statements is true about technological paradigm shifts?

Which of the following statements is true of technology in industries?

Consider a cost curve with production volume on the horizontal axis and marginal costs on the vertical axis. What shape would the marginal cost curve most resemble in a high-tech industry?

Technical standards do NOT play any role in product differentiation.

The goal of finding ways to make network effects work in a company's favor and against competitors can be achieved by:

Microsoft Word, the word-processing software, was so easy to use and had so many useful features, that no other software could compete with it. Therefore, at the time of its introduction, Microsoft Word could be described as a killer application.

Which of the following is an advantage of first movers?

With reference to high-technology industries, which of the following is an example of a technical standard?

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: the Identification of Opportunities and Threats

Internal Analysis: Resources and Competitive Advantage

Competitive Advantage Through Functional-Level Strategies

Business-Level Strategy

Business-Level Strategy and the Industry Environment

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate-Level Strategy: Related and Unrelated Diversification

Corporate Governance, Social Responsibility, and Ethics

Implementing Strategy Through Organization

Filters