Question 1

The rise of social media has made _____ promotion a tool that many firms can exploit.

Accepted Answer

The answer of The rise of social media has made...

Question 2

Firms that constantly innovate do so to develop open standards for competitors to become compatible.

Accepted Answer

A) True 
 B)False

Question 3

_____ involves competing by offering a new technology that is so superior to existing offerings that the value overcomes the total resistance that older technologies might enjoy via exchange, switching cost, and complementary benefits.

Accepted Answer

Technologi...

Question 4

Worldwide auction leader eBay started operations in Japan just five months after Yahoo! launched its Japanese auction service. But eBay was never able to mount a credible threat and ended up pulling out of the market. This example shows that:

Accepted Answer

A)   online auction markets are characterized by constant shifts in market dominance.
B)   market dominance in the global marketplace translates to an equivalent position in national markets.
C)   national markets tend to be influenced by factors that are not necessarily localized.
D)   it's imperative to move first in markets influenced by network effects.
E)   firms should always subsidize initial adoption of their products and make them cheaper than their competitor's products.

Question 5

A firm can spend no money and time, yet expect to enhance its offerings, by:

Accepted Answer

A)   allowing other firms to contribute to its platform.
B)   going public through an initial public stock offering.
C)   outsourcing critical processes to third parties.
D)   adopting an envelopment strategy.
E)   preannouncing a forthcoming product to lower sales of current offerings.

Question 6

Every product or service subject to network effects fosters some kind of exchange.

Accepted Answer

A) True 
 B)False

Question 7

While Sony and Microsoft focused on the graphics and raw processing power favored by hard-core male gamers, Nintendo chose to develop a machine to appeal to families, women, and age groups that normally shunned violent games. The strategy adopted by Nintendo in this example is the _____ strategy.

Accepted Answer

A)   straddling
B)   customer engagement
C)   Blue Ocean
D)   mass customization
E)   convergence

Question 8

Moving first plays a significant role in markets influenced by network effects.

Accepted Answer

A) True 
 B)False

Question 9

A market is said to be _____ if it derives most of its value from a single class of users.

Accepted Answer

A)   a pure play
B)   a long tail
C)   core competent
D)   one-sided
E)   convergent

Question 10

Metcalfe's Law is also known as:

Accepted Answer

A)   systemic events.
B)   cluster effects.
C)   group impressions.
D)   herd instincts.
E)   network externalities.

Question 11

A market where there are many buyers but only one dominant seller is known as a(n) _____.

Accepted Answer

The answer of A market where there are many buyers...

Question 12

Which statement best describes the relationship between network effects and innovation?

Accepted Answer

A)   Network effects decrease innovation within a standard but increase the number of innovative offerings that compete against a strongly established standard.
B)   Network effects increase innovation within a standard but decrease the number of innovative offerings that compete against a strongly established standard.
C)   More often than not, network effects foster innovation
D)   More often than not, network effects limit innovation

Question 13

The phenomenon of ________________________________________ exists when increasing numbers of users lower the value of a product or service

Accepted Answer

The answer of The phenomenon of ________________________________________ exists when increasing...

Question 14

The ability to take advantage of complementary products developed for a prior generation of technology is known as _____.

Accepted Answer

backward c...

Question 15

Cisco purchased Pure Digital, maker of the Flip video recorder, but ended up shutting the unit down a little over two years later. The reason for Cisco's failure was:

Accepted Answer

A)   Envelopment. Smartphone manufacturers and music players began to offer video recording features, enveloping the benefit provided by Pure's gear in their offerings.
B)   Network effects. Late-arriving Cisco could not compete against the dominance of existing, incompatible standards created by early-moving incumbents.
C)   The Osbour Effect. Cisco preannounced a product and no one wanted its current offerings.
D)   Staying power. Consumers weren't convinced a small firm like Cisco could win in the market.

Question 16

You are at a packed stadium for the big game and you want to upload a photo of your team's touchdown using Instagram. Your mobile phone shows five bars of service, but you still can't access the Internet. This is likely an example of ______.

Accepted Answer

a) The Osborne Effec...

Question 17

In a market influenced by network effects, the winning product or service is often determined by its technical superiority, with technically strong newcommers able to unseat the dominant incumbents.

Accepted Answer

A) True 
 B)False

Question 18

Network effects do not influence all consumer products or services.

Accepted Answer

A) True 
 B)False

Question 19

___________ allows iOS to control home products including locks, lighting, and thermostats.

Accepted Answer

The answer of ___________ allows iOS to control home products...

Question 20

Uber and PayPal used similar strategies when trying to jumpstart network effects that were vital in creating their dominance. What did each do?

Accepted Answer

a) Leveraged viral customer promotions b...

Exam 8: Understanding Network Effects: Strategies for Competing in a Platform-Centric, Winner-Take-All World

Firms that constantly innovate do so to develop open standards for competitors to become compatible.

Correct AnswerverifiedShow Answer

___________ allows iOS to control home products including locks, lighting, and thermostats.

Correct AnswerverifiedShow Answer

Cisco purchased Pure Digital, maker of the Flip video recorder, but ended up shutting the unit down a little over two years later. The reason for Cisco's failure was:

Correct AnswerverifiedShow Answer

In a market influenced by network effects, the winning product or service is often determined by its technical superiority, with technically strong newcommers able to unseat the dominant incumbents.

Correct AnswerverifiedShow Answer

Which statement best describes the relationship between network effects and innovation?

Correct AnswerverifiedShow Answer

Network effects do not influence all consumer products or services.

Correct AnswerverifiedShow Answer

Uber and PayPal used similar strategies when trying to jumpstart network effects that were vital in creating their dominance. What did each do?

Correct Answerverifieda) Leveraged viral customer promotions b...View AnswerShow Answer

The ability to take advantage of complementary products developed for a prior generation of technology is known as _____.

Correct Answerverifiedbackward c...View AnswerShow Answer

Every product or service subject to network effects fosters some kind of exchange.

Correct AnswerverifiedShow Answer

_____ involves competing by offering a new technology that is so superior to existing offerings that the value overcomes the total resistance that older technologies might enjoy via exchange, switching cost, and complementary benefits.

Correct AnswerverifiedTechnologi...View AnswerShow Answer

Worldwide auction leader eBay started operations in Japan just five months after Yahoo! launched its Japanese auction service. But eBay was never able to mount a credible threat and ended up pulling out of the market. This example shows that:

Correct AnswerverifiedShow Answer

A market where there are many buyers but only one dominant seller is known as a(n) _____.

Correct AnswerverifiedShow Answer

While Sony and Microsoft focused on the graphics and raw processing power favored by hard-core male gamers, Nintendo chose to develop a machine to appeal to families, women, and age groups that normally shunned violent games. The strategy adopted by Nintendo in this example is the _____ strategy.

Correct AnswerverifiedShow Answer

The rise of social media has made _____ promotion a tool that many firms can exploit.

Correct AnswerverifiedShow Answer

The phenomenon of ________________________________________ exists when increasing numbers of users lower the value of a product or service

Correct AnswerverifiedShow Answer

A market is said to be _____ if it derives most of its value from a single class of users.

Correct AnswerverifiedShow Answer

You are at a packed stadium for the big game and you want to upload a photo of your team's touchdown using Instagram. Your mobile phone shows five bars of service, but you still can't access the Internet. This is likely an example of ______.

Correct Answerverifieda) The Osborne Effec...View AnswerShow Answer

A firm can spend no money and time, yet expect to enhance its offerings, by:

Correct AnswerverifiedShow Answer

Metcalfe's Law is also known as:

Correct AnswerverifiedShow Answer

Moving first plays a significant role in markets influenced by network effects.

Correct AnswerverifiedShow Answer

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a) Leveraged viral customer promotions b...
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backward c...
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Technologi...
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a) The Osborne Effec...
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