Deck 15: The Origins of Competitive Advantage, innovation, evolution, and Environment part Five internal Organization

Question 1

Which of the following factors is least important for a firm to consider when engaged in a patent race and determining whether to increase its investment?

A)The cost of other R&D projects the firm is conducting
B)How much the investment will increase R&D productivity and thereby increase chances of winning the patent race
C)Whether other firms will increase their R&D expenditures in response, thereby decreasing the chance of winning the patent race
D)The number of competitors
E)The fact that antitrust laws may be more forgiving toward independent firms that agree to join forces in R&D before bringing the product to market than if the firms combine after each has made its own invention

Answer 1

A

Question 2

Which of the following terms best describes an idea,developed by Gary Hamel and C.K.Prahalad,which combines commitment to the firm's ambitions with the flexibility to change with circumstances?

A)Leveraging resources
B)Strategic intent
C)Strategic stretch
D)Hypercompetition
E)Global dominance

Answer 2

C

Question 3

Which of the following is not an example of disruptive technologies?

A)Computer workstations
B)Ink-jet printers
C)Electronic mail
D)Downloadable MP3 recordings
E)Segway human transporters

Answer 3

E

Question 4

Which of the following terms best describes the situation when sources of competitive advantage in an industry are being created and eroded at an increasingly rapid rate?

A)Leveraging resources
B)Strategic intent
C)Strategic stretch
D)Hypercompetition
E)Global dominance

Question 5

What of the following factors did not help Geneva watchmakers ultimately gain dominant status from the British in the industry in the 19ᵗʰ century?

A)Wars drained the British economy drying up local demand for the watches
B)The Swiss gained access to crucible steel outside of Britain
C)The Swiss outsourced labor to the United States at labor costs well below those in England
D)Desperate British watchmakers uncased movements and parts, helping the Swiss match British quality
E)The Swiss tailored their watches to consumer tastes

Question 6

What term describes the class of technologies that has higher B-C than their predecessors,but does so through a combination of lower B and much lower C?

A)Innovative technologies
B)Entrepreneurial technologies
C)Dynamic technologies
D)Disruptive technologies
E)Creative technologies

Question 7

Which of the following terms best refers to the fact that the benefit to a firm from being a monopolist as compared with being one of two competitors in a duopoly is greater than the benefit to a firm from being a duopolist as compared with not being in the industry at all?

A)The replacement effect
B)Competitive effect
C)Efficiency effect
D)Hypercompetition
E)The sunk cost effect

Question 8

What term describes the achievement of long-term growth and technological improvement?

A)Creative destruction
B)Static efficiency
C)Dynamic efficiency
D)Efficient allocation
E)Resource efficiency

Question 9

What term best characterizes the battle between firms to innovate first?

A)Market for new ideas
B)New product competition
C)R&D race
D)Innovation competition
E)Patent race

Question 10

Which of the following is the least likely factor contributing to early British dominance in the watchmaking industry?

A)Watchmakers employed laborers in the British countryside at a considerably lower wage than laborers in London would demand
B)British watches were priced lower than other makers
C)Watchmakers benefitted from a division of labor
D)Large local demand made specialization of labor possible
E)Crucible steel was manufactured by a British monopoly

Question 11

Which of the following is a possible explanation for the reason that American steelmakers continued to invest in less efficient OH technology instead of newer more efficient BOF technology throughout the 1950s?

A)The replacement effect
B)Strategic intent
C)Strategic stretch
D)Efficiency effect
E)The sunk cost effect

Question 12

Which of the following terms best describes the ability of a firm to maintain and adapt the capabilities that are the basis of its competitive advantage?

A)Riskiness of R&D
B)Correlated research strategies
C)Evolutionary economics
D)Dynamic efficiency
E)Dynamic capabilities

Question 13

What term best describes the characteristic of a process if past circumstances could exclude certain evolutions in the future?

A)Path dependence
B)Correlated research strategies
C)Evolutionary economics
D)Dynamic efficiency
E)Dynamic capabilities

Question 14

Which of the following terms best describes a phenomenon whereby,despite equal innovative capabilities,an entrant is willing to spend more to develop an innovation?

A)The replacement effect
B)Strategic intent
C)Strategic stretch
D)Hypercompetition
E)The sunk cost effect

Question 15

Which of the following statements is least true with regards to firms' choice of research methodology in the patent race process?

A)When choosing research methodology, firms must consider the methods their rivals are pursuing
B)One dimension of interest when choosing a methodology is the riskiness of the methodology
C)One dimension of interest when choosing a methodology is the degree to which the success of one methodology is correlated with the success of another
D)When two research methods have the same expected completion date, but the date for one is less certain than the other, the choice of methodology is clear
E)In general society benefits more when firms pursue uncorrelated research approaches than when they pursue correlated approaches

Question 16

What term best describes when quiet periods in markets are punctuated by fundamental "shocks" or "discontinuities" that destroy old sources of advantage and replace them with new ones?

A)Creative destruction
B)Entrepreneurship
C)Innovation
D)Market for ideas
E)Disruptive technologies

Question 17

What term describes the optimal allocation of society's resources at a given point in time?

A)Creative destruction
B)Static efficiency
C)Dynamic efficiency
D)Efficient allocation
E)Resource efficiency

Question 18

Which of the following terms best describes an idea,developed by Gary Hamel and C.K.Prahalad,which means a fundamental focus of a firm's strategy that commits it well beyond its current resource profile?

A)Leveraging resources
B)Strategic intent
C)Strategic stretch
D)Hypercompetition
E)Global dominance

Question 19

Which of the following terms best describes a place in which a firm can sell its ideas for full value?

A)Industry for ideas
B)Community of ideas
C)Innovation market
D)Market for ideas
E)Idea environment

Question 20

Which of the following terms best describes a phenomenon whereby a profit-maximizing firm sticks with its current technology or product concept even though the profit-maximizing decision for a firm starting from scratch would be to choose a different technology or product concept?

A)The replacement effect
B)Strategic intent
C)Strategic stretch
D)Hypercompetition
E)The sunk cost effect

Question 21

Which of the following terms describes a nation's position with regard to the elements (e.g.human resources,infrastructure)of production that are necessary to compete in a particular industry?

A)Factor conditions
B)Demand conditions
C)Supply conditions
D)Related supplier or support industries
E)Strategy, structure, and rivalry

Question 22

Which of the following statements is most true with regard to Strategy,Structure,and Rivalry in Michael Porter's "diamond" determinants of competitive advantage?

A)The context of a firm's home market includes foreign capital markets
B)Although local rivalry may hold down profitability in local markets, firms that survive vigorous local competition are often less efficient and innovative than are international rivals that emerge from softer local conditions
C)Local rivalry tends to affect the rate of innovation in a market far more than foreign rivalry does
D)Foreign rivalry tends to affect the rate of innovation in a market far more than local rivalry does
E)The context of a firm's home market includes foreign management practices

Question 23

Which of the following is not part of Porter's "diamond",four attributes in a firm's home market that promote or impede a firm's ability to achieve competitive advantage in global markets?

A)Factor conditions
B)Demand conditions
C)Supply conditions
D)Related supplier or support industries
E)Strategy, structure, and rivalry

Question 24

Size,growth,and character of home demand for a firm's product are examples of what?

A)Factor conditions
B)Demand conditions
C)Supply conditions
D)Related supplier or support industries
E)Strategy, structure, and rivalry

Question 25

Which of the following describe ways firms have sought to innovate and mange innovation in recent years?

A)Creation of corporate venture departments
B)Spinoffs
C)Joint Ventures
D)Strategic Alliances
E)All of the above