Deck 4: Standards Battles and Design Dominance

Question 1

Which of the following statements is true of learning effects?

A) There are substantial differences in the rates at which organizations learn.
B) The learning rate is impervious to organizational factors such as firm strategy.
C) As a technology is adopted, further development and refining of the technology reduces.
D) The cost of producing a unit rises as the number of units produced increases.

Answer 1

A

Question 2

The more a technology is adopted:

A) the less valuable it becomes on account of market saturation.
B) the more susceptible it becomes to decreasing returns of adoption.
C) the greater are the opportunities for development of complementary assets.
D) the lesser are the possibilities for improvements in the technology and its applications.

Answer 2

C

Question 3

When an industry has network externalities,the value of a good to a user is more likely to go up linearly rather than increase in an s-shape.

Answer 3

False

Question 4

Increasing returns to adoption means that the more a technology is adopted,the more valuable it becomes.

Question 5

A legally induced adherence to a dominant design is not possible.

Question 6

Products that have a large installed base are likely to attract more developers of complementary goods.

Question 7

The learning curve indicates that the more units a company produces of an item,the more each unit will cost.

Question 8

In a market characterized by network externalities,the benefit from using a good decreases with an increase in the number of other users of the same good.

Question 9

Since perceived or expected installed base may drive subsequent adoptions,a large perceived or expected installed base can lead to a large actual installed base.

Question 10

As firms develop complementary technologies to improve the productivity or ease of utilization of the core technology,the technology becomes less attractive to other firms.

Question 11

Network externalities cannot arise in markets that do not have physical networks.

Question 12

Neon Electronics Inc.is an electronics manufacturing company.It has adopted a dominant design for its television audio speakers.Which of the following statements is most likely to be true in this scenario?

A) Neon Electronics will have to invest heavily in R&D to come up with new designs for the audio speakers.
B) Neon Electronics will face decreasing returns to its adoption of the dominant design.
C) Neon Electronics will have increased opportunities to develop complementary assets.
D) The design adopted by Neon Electronics will be unpopular among most of the other manufacturers.

Question 13

The influence of a dominant design can extend beyond its own technology cycle.

Question 14

Network externality returns refers to the value customers reap as a larger portion of the market adopts the same good.

Question 15

Firms that develop new technologies ahead of others often try a number of unsuccessful techniques before finding a solution that works well.This experimentation:

A) lowers the firm's ability to recognize the value of new information.
B) lowers the firm's ability to develop and enhance technologies.
C) makes it difficult for the firm to develop related technologies.
D) enables the firm to find related solutions and alternatives that work well.

Question 16

Though learning curves are found in a wide range of organizational processes,there are substantial differences in the rates at which organizations learn.

Question 17

In industries characterized by network externalities,the value of a technological innovation to users will be a function only of its stand-alone benefits and cost.

Question 18

The ability of an organization to recognize,assimilate,and utilize new knowledge is referred to as learning trajectory.

Question 19

Technologically superior products do not always win in the market.

Question 20

Clear Vision Inc.has been the market leader for vision care products such as eyeglasses and lenses.It has also recently developed the use of laser technology to correct eye defects.Due to its prior related experiences,it has been successful in recognizing the value of new information and using it to develop new technologies ahead of others.This phenomenon is called:

A) absorptive capacity.
B) disintermediation.
C) technology determinism.
D) technology retardation.

Question 21

Increasing returns to adoption imply that technology trajectories are characterized by _____,meaning that relatively small historical events may have a great impact on the final outcome.

A) the ratchet effect
B) the funnel effect
C) corrugated anomalies
D) path dependency

Question 22

When are winner-take-all markets good for consumers?

A) When monopoly costs exceed the value of network externality returns
B) When monopoly costs exceed the value of technological utility
C) When the monopoly cost curve is extremely steep
D) When the value of technology utility and network externality returns exceeds monopoly costs

Question 23

Oswen Technologies Inc.,a software development company,spent a lot of money in advertising software products that were not in the market.However,the firm hoped to bring these products to the market at a later date.The software products advertised before their availability are termed _____.

A) puffery
B) vaporware
C) first refusal units
D) advertising rollouts

Question 24

When users are comparing the value of a new technology to an existing technology,they are said to be using objective information when the comparison is based on:

A) anticipated technological benefits.
B) future prediction regarding the availability of complementary goods.
C) perceived installed base.
D) actual technological benefits.

Question 25

Explain the concepts of network externalities and installed base.

Question 26

TechSense,an electronics manufacturing firm,allows its customers to resell old TechSense products at its retail outlets.The firm reuses the metal,wires,and plastic-extracted from these old products-in its new products.This way the company has been able to take waste management to a whole new level.According to the Buyer Utility Map,the firm is applying environmental friendliness utility lever in the _____ stage of buyer experience cycle.

A) supplements
B) purchase
C) use
D) disposal

Question 27

A new technology is most likely to be successful in displacing an existing technology when:

A) its installed base is significantly less than that of the existing technology.
B) the new technology competes only on the value of its stand-alone utility.
C) it eclipses the combined value of the existing technology's stand-alone utility, its installed base, and its complementary goods.
D) the new technology's perceived and anticipated components of value are lower than its actual components of value.

Question 28

Money Club and Money Ball are online platforms that allow their members to get in touch with people from various businesses.They also facilitate business contracts between their members.Money Club has 6,000 members,whereas Money Ball has 3,500 members.This indicates that:

A) Money Club has a larger installed base than Money Ball.
B) Money Club has a lower positive consumption externality than Money Ball.
C) Money Ball provides more complementary goods than Money Club.
D) Money Ball does not use a dominant design.

Question 29

Future Electronics Inc.'s body scanning machine has been adopted by majority of the healthcare market.As a result,the company demands a high price from its customers,which mainly include hospitals.It is not investing much on innovation and its product variety is also very low.This cost borne by the users in this case is referred to as:

A) marginal cost.
B) social cost.
C) monopoly cost.
D) deferred cost.

Question 30

How is a dominant design likely to influence the nature of the technological discontinuity that will eventually replace it?

Question 31

The U.S.Postal Service now offers a "Click-N-Ship" online service where users can buy and print postage and labels online.According to the Buyer Utility Map,the U.S.Postal Service is offering the _____ utility lever,during the _____ stage of buyer experience cycle.

A) risk; use
B) fun and image; maintenance
C) convenience; purchase
D) environmental friendliness; disposal

Question 32

As firms develop complementary technologies to improve the productivity or ease of utilization of a core technology,the technology:

A) becomes more attractive to other firms.
B) loses its credibility in the market.
C) loses its dominant design position in the industry.
D) experiences a decrease in its installed base.

Question 33

What is absorptive capacity? Why do firms that fall behind the technology frontier find it difficult to catch up?

Question 34

Earth Love Electronics Inc.has developed a lawn mower that runs on solar power.The lawn mowers are available in all local supermarkets and several electronic stores.According to the Buyer Utility Map,the company is trying to offer convenience utility in the _____ stage.

A) supplements
B) purchase
C) disposal
D) maintenance

Question 35

Explain how the more a technology is adopted,the better it becomes.

Question 36

The value of an electronic reader is related to the availability of books,journals,magazines,etc.,in a format that can be read by the electronic reader.For an electronic reader,these are _____ goods.

A) complementary
B) substitute
C) Giffen
D) intermediate

Question 37

Arica Software Inc.is trying to estimate the installed base for its software.It is trying to assess the number of:

A) substitutes available for its software.
B) developers working on its software.
C) areas in which its software can be applied.
D) users of its software.

Question 38

Which of the following statements is true of dominant design?

A) It is not possible to have legally induced adherence to a dominant design.
B) When a firm's technology is locked in as the dominant design of a market, it earns low rewards.
C) A firm that supports a technology that is chosen as the dominant design is in a poor position to shape the evolution of the industry.
D) A firm may find itself locked out of the market if it is unable to adopt the dominant technology.

Question 39

Which of the following statements is true of a monopoly cost curve?

A) Monopoly costs to market share curve is more s-shaped than network externality returns to market share curve.
B) The steepness of the monopoly cost curve is largely a function of a firm's discretionary behavior.
C) It is not possible for a network externality returns curve to cross a monopoly cost curve.
D) A firm choosing to exploit its monopoly power is flattening its monopoly costs curve.

Question 40

What is vaporware? What are its advantages?