Exam 7: Strategy and Technology

Which of the following economic benefits result from the use of standards?

When two or more companies are competing with each other to get their technology adopted as a standard in an industry,and when network effects and positive feedback loops are important,the company that wins the format war will be the one whose strategy best exploits positive feedback loops.

One important advantage of being a first mover is that it guarantees success.

A razor-and-blade strategy refers to lowering a company's cost structure.

Aggressive marketing is a key factor in jump-starting demand to get potential early adopters to bear the switching costs associated with adopting a new innovation.

The law of diminishing returns states that marginal costs fall as a company tries to expand output.

Cellular phone service providers often sell the phone itself at very low prices and then charge a relatively high fee for usage.This illustrates

Give an example of an industry that has recently undergone a technological paradigm shift.What impact did the shift have on established companies? On new entrants to the industry?

Companies that are locked out of a market are those in which consumers are unwilling to bear the switching costs required for them to abandon the established standard and adopt the new one.

When an industry's products rely on a common set of features,these features are called a

Battles to set and control technical standards in a market are referred to as product positioning.

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

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

Microsoft Word,the word-processing software,is so easy to use and has so many useful features that no other software can compete with it.Therefore,Microsoft Word can be described as a killer application.

Which of the following is not one of the benefits that first movers enjoy?

Recently,the U.S.Food and Drug Administration began to require more descriptive labeling of food products.This is an example of standards developed

Mathematica 1.0 was one of the most distinctive applications for the short-lived NeXT Computer.It still sets the standard for symbolic math and visualization on Windows,Mac,Linux,and Unix.Mathematica 1.0 can be described as a(n)_____ application.

What are technical standards,why are they important,and how are they established?

Technological paradigm shifts occur when new technologies come along that revolutionize the structure of the industry,dramatically alter the nature of competition,and require companies to adopt new strategies to survive.

Write as if you were an outside management consultant and advise a firm attempting to win a format war with a powerful and capable competitor.Give several options.