Question 1

What term best describes firm-specific assets such as patents and trademarks,brand-name reputation,installed base,and organizational culture?

Accepted Answer

A) Competitive advantage 
B) Capabilities 
C) Resources 
D) Threats to sustainability 
E) Strategic firm assets 
A) Competitive advantage 
B) Capabilities 
C) Resources 
D) Threats to sustainability 
E) Strategic firm assets C

Question 2

What term describes a framework used in strategy based on resource heterogeneity which posits that for a competitive advantage to be sustainable,it must be underpinned by resource capabilities that are scarce and imperfectly mobile?

Accepted Answer

A) Persistence of profitability for the firm 
B) Capability-based theory of the firm 
C) Regression to the mean 
D) Resource-based theory of the firm 
E) Five-forces framework 
A) Persistence of profitability for the firm 
B) Capability-based theory of the firm 
C) Regression to the mean 
D) Resource-based theory of the firm 
E) Five-forces framework D

Question 3

Which of the following is not a Legal Restriction?

Accepted Answer

A) Patent 
B) Copyright 
C) Trademark 
D) Intellectual property 
E) Operating rights 
A) Patent 
B) Copyright 
C) Trademark 
D) Intellectual property 
E) Operating rights D

Question 4

Which of the following is least likely a characteristic of profit persistence in an industry?

Accepted Answer

A) Entry barriers exist 
B) Economic profits should quickly converge to zero 
C) Barriers to imitation exist 
D) Firms earning above-average profits today should continue to do so in the future 
E) Low profit firms today should remain low-profit firms in the future 
A) Entry barriers exist 
B) Economic profits should quickly converge to zero 
C) Barriers to imitation exist 
D) Firms earning above-average profits today should continue to do so in the future 
E) Low profit firms today should remain low-profit firms in the future

Question 5

Which of the following statements is least true with regards to Dennis Mueller's study of profit persistence?

Accepted Answer

A) Mueller's results suggest that firms with abnormally high levels of profitability tend, on average, to decrease in profitability over time. 
B) The profit rates of firms with abnormally high levels of profitability and firms with abnormally low levels of profitability will always converge to a common mean as the theory of perfect competition predicts 
C) Mueller's results suggest that firms with abnormally low levels of profitability tend, on average, to experiences increases in profitability over time 
D) Firms that start out with high profits converge, in the long run, to rates of profitability that are higher than the rates of profitability of firms that start out with low profits 
E) Mueller's work implies that market forces are a threat to profits, but only up to a point 
A) Mueller's results suggest that firms with abnormally high levels of profitability tend, on average, to decrease in profitability over time. 
B) The profit rates of firms with abnormally high levels of profitability and firms with abnormally low levels of profitability will always converge to a common mean as the theory of perfect competition predicts 
C) Mueller's results suggest that firms with abnormally low levels of profitability tend, on average, to experiences increases in profitability over time 
D) Firms that start out with high profits converge, in the long run, to rates of profitability that are higher than the rates of profitability of firms that start out with low profits 
E) Mueller's work implies that market forces are a threat to profits, but only up to a point

Question 6

What term refers to the costs incurred by buyers when they change to a different supplier?

Accepted Answer

A) Switching costs 
B) Buyer costs 
C) Reputation costs 
D) Learning costs 
E) Customer costs 
A) Switching costs 
B) Buyer costs 
C) Reputation costs 
D) Learning costs 
E) Customer costs

Question 7

What term describes the situation where a firm does exceedingly well due to good luck or exceedingly poorly due to bad luck,but returns to normal performance following?

Accepted Answer

A) Regression to the mean 
B) Competitive advantage 
C) Persistent performer 
D) Sustainable firm 
E) Predictable performance 
A) Regression to the mean 
B) Competitive advantage 
C) Persistent performer 
D) Sustainable firm 
E) Predictable performance

Question 8

What term coined by Richard Rumelt refers to economic forces that limit the extent to which a competitive advantage can be duplicated or neutralized through resource-creation activities of other firms?

Accepted Answer

A) Capability-based theory of the firm 
B) Resource-based theory of the firm 
C) Early-mover advantages 
D) Impediments to imitation 
E) Isolating mechanisms 
A) Capability-based theory of the firm 
B) Resource-based theory of the firm 
C) Early-mover advantages 
D) Impediments to imitation 
E) Isolating mechanisms

Question 9

Which of the following products and services depend on standards?

Accepted Answer

A) Cellular communications 
B) Internet 
C) Video gaming 
D) High-definition television 
E) All of the above 
A) Cellular communications 
B) Internet 
C) Video gaming 
D) High-definition television 
E) All of the above

Question 10

Which of the following is not an isolating mechanism that falls under the heading of early-mover advantage?

Accepted Answer

A) Learning curve 
B) Reputation and buyer uncertainty 
C) Buyer switching costs 
D) Network effects 
E) Superior access to inputs or customers 
A) Learning curve 
B) Reputation and buyer uncertainty 
C) Buyer switching costs 
D) Network effects 
E) Superior access to inputs or customers

Question 11

What best describes the reason superstar athletes (resources)capture most of the extra-value they create for a firm in the form of higher salaries rather than the firm capturing the extra value itself?

Accepted Answer

A) The athletes are not value-creating 
B) The athletes are isolating mechanisms 
C) The athletes are not cospecialized 
D) The athletes are not scarce 
E) The athletes are imperfectly mobile 
A) The athletes are not value-creating 
B) The athletes are isolating mechanisms 
C) The athletes are not cospecialized 
D) The athletes are not scarce 
E) The athletes are imperfectly mobile

Question 12

Which of the following is the weakest an example of a "shock"?

Accepted Answer

A) Contracting to use another firm's proprietary process 
B) Product Innovations 
C) Discoveries of new sources of consumer value or market segments 
D) Shifts in demand 
E) Changes in public policy that enables firms to significantly shift their strategic position in a business 
A) Contracting to use another firm's proprietary process 
B) Product Innovations 
C) Discoveries of new sources of consumer value or market segments 
D) Shifts in demand 
E) Changes in public policy that enables firms to significantly shift their strategic position in a business

Question 13

Consider an industry in which firms produce undifferentiated product with differentiated production costs.AVC and MC are constant up to a capacity of one million units per year.Assume the industry can accommodate many firms producing at capacity and that the industry's most efficient firms can achieve an AVC of $1/unit.There are many potential entrants into this market,but due to imperfect imitation,not all can emulate the low-cost position.Before entering,a competitor believes there is a 25% probability its AVC will take on each of four values: $2,$4,$6,$8.Additionally,suppose the firm will incur the cost of building a factory when entering the industry.Factories cost $30 million to build and (for simplicity)never depreciate in value.If investors expect a return of 10% on their capital and the factory has zero scrap value,what will the equilibrium price be?

Accepted Answer

The answer of Consider an industry in which firms produce...

Question 14

What did Vonage do to deflect the impact of the intense price competition in the U.S.?

Accepted Answer

A) Attempted to position itself as the high-quality, high-reliability player in the market 
B) Raised its prices 
C) Was acquired by Ebay 
D) Began jointly providing service with cable companies 
E) Replicate other firms on hardware and service features 
A) Attempted to position itself as the high-quality, high-reliability player in the market 
B) Raised its prices 
C) Was acquired by Ebay 
D) Began jointly providing service with cable companies 
E) Replicate other firms on hardware and service features

Question 15

What term best describes assets that are more valuable when used together than when separated?

Accepted Answer

A) Isolating 
B) Value-creating 
C) Imperfectly mobile 
D) Scarce 
E) Cospecialized 
A) Isolating 
B) Value-creating 
C) Imperfectly mobile 
D) Scarce 
E) Cospecialized

Question 16

What product characteristic refers to the situation where consumers place higher value on a product if other consumers also use it?

Accepted Answer

A) Value creation effect 
B) Product linkage 
C) Product externality 
D) Complementary effect 
E) Network effect 
A) Value creation effect 
B) Product linkage 
C) Product externality 
D) Complementary effect 
E) Network effect

Question 17

What term best refers to fundamental changes that lead to major shifts of competitive positions in a market?

Accepted Answer

A) Jump 
B) Shock 
C) Alteration 
D) Bolt 
E) Shift 
A) Jump 
B) Shock 
C) Alteration 
D) Bolt 
E) Shift

Question 18

Which of the following is not an impediment to imitation?

Accepted Answer

A) Legal restrictions 
B) Superior access to inputs or customers 
C) Scale diseconomies 
D) Market size economies 
E) Intangible barriers: casual ambiguity, dependence on historical circumstances, and social complexity 
A) Legal restrictions 
B) Superior access to inputs or customers 
C) Scale diseconomies 
D) Market size economies 
E) Intangible barriers: casual ambiguity, dependence on historical circumstances, and social complexity

Question 19

Which of the following is not an example of a way a seller can increase switching costs?

Accepted Answer

A) Creating a product line compatible with parts that are made by other manufacturers 
B) Offering coupons that tie discounts to the completion of a series of transactions 
C) Offering warranties if product is not serviced at authorized dealer 
D) Bundling complementary products that fit together in a product line 
E) Offering "frequent customer" points that tie promotions to the completion of a series of transactions 
A) Creating a product line compatible with parts that are made by other manufacturers 
B) Offering coupons that tie discounts to the completion of a series of transactions 
C) Offering warranties if product is not serviced at authorized dealer 
D) Bundling complementary products that fit together in a product line 
E) Offering "frequent customer" points that tie promotions to the completion of a series of transactions

Question 20

What term coined by Richard Rumelt refers to situations in which the causes of a firm's ability to create more value than its competitors are obscure and only imperfectly understood?

Accepted Answer

A) Isolating mechanisms 
B) Casual ambiguity 
C) Dependence on historical circumstances 
D) Social complexity 
E) Impediments to imitation 
A) Isolating mechanisms 
B) Casual ambiguity 
C) Dependence on historical circumstances 
D) Social complexity 
E) Impediments to imitation

What term best describes firm-specific assets such as patents and trademarks,brand-name reputation,installed base,and organizational culture?

What term describes a framework used in strategy based on resource heterogeneity which posits that for a competitive advantage to be sustainable,it must be underpinned by resource capabilities that are scarce and imperfectly mobile?

Which of the following is not a Legal Restriction?

Which of the following is least likely a characteristic of profit persistence in an industry?

Which of the following statements is least true with regards to Dennis Mueller's study of profit persistence?

What term refers to the costs incurred by buyers when they change to a different supplier?

What term describes the situation where a firm does exceedingly well due to good luck or exceedingly poorly due to bad luck,but returns to normal performance following?

What term coined by Richard Rumelt refers to economic forces that limit the extent to which a competitive advantage can be duplicated or neutralized through resource-creation activities of other firms?

Which of the following products and services depend on standards?

Which of the following is not an isolating mechanism that falls under the heading of early-mover advantage?

What best describes the reason superstar athletes (resources)capture most of the extra-value they create for a firm in the form of higher salaries rather than the firm capturing the extra value itself?

Which of the following is the weakest an example of a "shock"?

What did Vonage do to deflect the impact of the intense price competition in the U.S.?

What term best describes assets that are more valuable when used together than when separated?

What product characteristic refers to the situation where consumers place higher value on a product if other consumers also use it?

What term best refers to fundamental changes that lead to major shifts of competitive positions in a market?

Which of the following is not an impediment to imitation?

Which of the following is not an example of a way a seller can increase switching costs?

What term coined by Richard Rumelt refers to situations in which the causes of a firm's ability to create more value than its competitors are obscure and only imperfectly understood?

Basic Microeconomic Principles

Economies of Scale and Scope

Agency and Coordination

The Power of Principles - an Historical Perspective

The Vertical Boundaries of the Firm

Organizing Vertical Boundariesvertical Integration and Its Alternatives

Diversificationpart Threemarket and Competitive Analysis

Competitors and Competition

Strategic Commitment

The Dynamics of Pricing Rivalry

Entry and Exit

Industry Analysispart Fourstrategic Position and Dynamics

Strategic Positioning for Competitive Advantage

The Origins of Competitive Advantage, innovation, evolution, and Environment part Five internal Organization

Performance Measurement and Incentives in Firms

Strategy and Structure

Environment, power, and Culture

Filters

Exam 14: Sustaining Competitive Advantage

What term best describes firm-specific assets such as patents and trademarks,brand-name reputation,installed base,and organizational culture?

What term describes a framework used in strategy based on resource heterogeneity which posits that for a competitive advantage to be sustainable,it must be underpinned by resource capabilities that are scarce and imperfectly mobile?

Which of the following is not a Legal Restriction?

Which of the following is least likely a characteristic of profit persistence in an industry?

Which of the following statements is least true with regards to Dennis Mueller's study of profit persistence?

What term refers to the costs incurred by buyers when they change to a different supplier?

What term describes the situation where a firm does exceedingly well due to good luck or exceedingly poorly due to bad luck,but returns to normal performance following?

What term coined by Richard Rumelt refers to economic forces that limit the extent to which a competitive advantage can be duplicated or neutralized through resource-creation activities of other firms?

Which of the following products and services depend on standards?

Which of the following is not an isolating mechanism that falls under the heading of early-mover advantage?

What best describes the reason superstar athletes (resources)capture most of the extra-value they create for a firm in the form of higher salaries rather than the firm capturing the extra value itself?

Which of the following is the weakest an example of a "shock"?

What did Vonage do to deflect the impact of the intense price competition in the U.S.?

What term best describes assets that are more valuable when used together than when separated?

What product characteristic refers to the situation where consumers place higher value on a product if other consumers also use it?

What term best refers to fundamental changes that lead to major shifts of competitive positions in a market?

Which of the following is not an impediment to imitation?

Which of the following is not an example of a way a seller can increase switching costs?

What term coined by Richard Rumelt refers to situations in which the causes of a firm's ability to create more value than its competitors are obscure and only imperfectly understood?

Basic Microeconomic Principles

Economies of Scale and Scope

Agency and Coordination

The Power of Principles - an Historical Perspective

The Vertical Boundaries of the Firm

Organizing Vertical Boundariesvertical Integration and Its Alternatives

Diversificationpart Threemarket and Competitive Analysis

Competitors and Competition

Strategic Commitment

The Dynamics of Pricing Rivalry

Entry and Exit

Industry Analysispart Fourstrategic Position and Dynamics

Strategic Positioning for Competitive Advantage

The Origins of Competitive Advantage, innovation, evolution, and Environment part Five internal Organization

Performance Measurement and Incentives in Firms

Strategy and Structure

Environment, power, and Culture

Filters