Question 1

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

Accepted Answer

A)  only by companies in a 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 2

Which of the following is true offrrst movers?

Accepted Answer

A)  The first mover cannot be able to establish brand loyalty.
B)  The first mover has no opportunity to exploit network effects and positive feedback loops.
C)  The first mover cannot create switching costs for its customers to deter rivals.
D)  The frrst mover that creates a revolutionary product is in a monopoly position.
E)  Being a frrst mover guarantees instant success.

Question 3

In order to work towards winning a format war, a company should:

Accepted Answer

A)  refrain from aggressive marketing and advertising.
B)  ensure that there is a limited supply of complementary products.
C)  develop its own killer applications.
D)  keep the prices high even if the customer demand is extremely low.
E)  refrain from cooperating with competitiors under any circumstances. C

Question 4

Which of the following is NOT true of high-technology industries?

Accepted Answer

A)  First movers cannot create switching costs for their customers.
B)  First movers have higher pioneering costs than later entrants.
C)  Later entrants can avoid the mistakes made by first movers.
D)  First movers that create a revolutionary product are in a monopoly position.
E)  First movers run the risk of building the wrong resources and capabilities.

Question 5

Microsoft's near monopoly substantially reduces the risks facing the makers of complementary products and the costs of those products.

Accepted Answer

A) True 
 B)False

Question 6

It is important for a company to make sure that, in addition to the product itself, there is an adequate supply of complements to win a format war.

Accepted Answer

A) True 
 B)False

Question 7

Digital music downloads have high marginal costs.

Accepted Answer

A) True 
 B)False

Question 8

With reference to high-technology industries, which of the following statements is true about technical standards?

Accepted Answer

A)  They emerge because there are economic benefits associated with them.
B)  They cause compatibility problems between products and their complements.
C)  They can create a lot of confusion in the minds of consumers.
D)  They often result in higher production costs.
E)  They increase the risks associated with supplying complementary products.

Question 9

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. B

Question 10

Which of the following is an advantage offrrst 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.

Question 11

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

Accepted Answer

Many industries in retailing and manufac...

Question 12

Switching costs, in the context of technology industries, refer to the costs that:

Accepted Answer

A)  industries have to incur in order to adhere to technical standards.
B)  companies have to incur to switch from one business model to another.
C)  customers need to bear to abandon an established standard and adopt a new standard.
D)  industries need to bear in order to abandon old technology and get license for a new technology.
E)  companies need to bear to create product differentiation when they are locked inside an industry.

Question 13

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 finn.
E)  wait until competitors develop an alternative product.

Question 14

Which of the following statements is true about marginal costs in high-technology industries?

Accepted Answer

A)  They are invariably higher than fixed costs.
B)  They are the costs that customers need to bear in order to adopt a new technology.
C)  They include the costs of packaging and product distribution.
D)  They are extremely high in software-making companies.
E)  They do not exist if the product is sold by a sales force directly to end-users.

Question 15

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 in industries is revolutionizing aspects of the product even in those not typically considered high- tech.
C)  High-technology industries do not require 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 16

Technical standards do not play any role in product differentiation.

Accepted Answer

A) True 
 B)False

Question 17

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.

Accepted Answer

A) True 
 B)False

Question 18

A technological paradigm shift is most likely to occur in which stage of the industry life cycle?

Accepted Answer

A)  Embryonic
B)  Growth
C)  Shakeout
D)  Maturity
E)  Decline D

Question 19

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

Accepted Answer

A)  the first-mover strategy.
B)  competitive cooperation.
C)  the razor and blade strategy.
D)  competitive positioning.
E)  format licensing.

Question 20

What advice would you give to a firm that wants to exploit network effects?

Accepted Answer

A)  Charge heavy license fee for new technology.
B)  Refrain from using technical standards.
C)  Create incentives for other firms to develop complementary products.
D)  Do not use aggressive marketing strategies for killer applications.
E)  Increase switching costs.

Exam 7: Strategy and Technology

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

Correct AnswerverifiedShow Answer

Which of the following is true offrrst movers?

Correct AnswerverifiedShow Answer

In order to work towards winning a format war, a company should:

Correct AnswerverifiedC

Which of the following is NOT true of high-technology industries?

Correct AnswerverifiedShow Answer

Microsoft's near monopoly substantially reduces the risks facing the makers of complementary products and the costs of those products.

Correct AnswerverifiedShow Answer

It is important for a company to make sure that, in addition to the product itself, there is an adequate supply of complements to win a format war.

Correct AnswerverifiedShow Answer

Digital music downloads have high marginal costs.

Correct AnswerverifiedShow Answer

With reference to high-technology industries, which of the following statements is true about technical standards?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedB

Which of the following is an advantage offrrst movers?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedMany industries in retailing and manufac...View AnswerShow Answer

Switching costs, in the context of technology industries, refer to the costs that:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements is true about marginal costs in high-technology industries?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Technical standards do not play any role in product differentiation.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

A technological paradigm shift is most likely to occur in which stage of the industry life cycle?

Correct AnswerverifiedD

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

Correct AnswerverifiedShow Answer

What advice would you give to a firm that wants to exploit network effects?

Correct AnswerverifiedShow Answer

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C

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B

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Many industries in retailing and manufac...
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D

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