Question 1

Netscape, which once controlled more than 80 percent of the market share in Web browsers, lost its dominant position when customers migrated to Internet Explorer, Microsoft's Web browser. Internet Explorer was to install and had no significant differences in terms of usability. This example serves to illustrate that:
A) fast-following smaller firms are always ready with newer and possibly superior products.
B) customers of technology companies are becoming increasingly savvy and more demanding.
C) the open source nature of technology ensures that no firm can expect to monopolize a market.
D) firms need to employ increasingly stringent intellectual property norms to guard against infringements from smaller, competitive rivals.
E) firms with low switching costs can sometimes be rapidly overtaken by strong rivals with additional competitive advantages.

Accepted Answer

The example of Netscape and Internet Explorer illustrates how firms with low switching costs (in this case, switching from one browser to another) can be quickly overtaken by competitors (Microsoft's Internet Explorer) that offer additional competitive advantages, such as ease of installation and being bundled with the dominant operating system.

Question 2

The acronym NPE stands for:
A) Non-Practicing Entities
B) Non-Practicing Exhibits
C) Normal Practicing Entities
D) Neo-Practicing Entities
E) Normal-Practicing Exhibits

Accepted Answer

Non-Practicing Entities (NPEs) are companies or individuals that own patents but do not manufacture products or supply services based on those patents. They typically earn revenue by licensing patents to others or through litigation.

Question 3

Diagram and label the value chain, listing all primary and secondary components.

Accepted Answer

The answer of Diagram and label the value chain, listing...

Question 4

The patent system is often considered to be unfairly stacked against start-ups because:
A) bigger multinational firms enjoy patent protection in all countries as opposed to start-ups, which are domestic firms that do not get such protection for the most part.
B) the intellectual property laws are not adequate to protect the interests of smaller firms from infringements.
C) the patent system grants patents for innovations on a differential basis, with bigger firms getting precedence over start-ups.
D) high litigation costs coupled with a few months of litigation can sink an early stage firm.
E) patents are granted by the patent system on an ad hoc basis wherein firms that have been in business longer get patent protection for longer periods of time.

Accepted Answer

High litigation costs and lengthy legal battles can be financially devastating for start-ups, which often have limited resources compared to larger firms.

Question 5

Apple's dominance of smartphone and tablet markets has allowed the firm to lock up 60 percent of the world's supply of advanced touch-screen displays, and to do so with better pricing than would be available to smaller rivals. This is an example of:
A) network externalities that make Apple valuable.
B) high switching costs for suppliers.
C) a complex tech product establishing itself as a killer brand.
D) a growing firm gaining bargaining power with its suppliers.
E) low search costs associated with a famous brand.

Accepted Answer

This scenario exemplifies a growing firm (Apple) leveraging its market dominance to negotiate better terms and secure a large portion of a critical component (advanced touch-screen displays), thus gaining significant bargaining power with its suppliers.

Question 6

The paths through which products or services get to customers are known as _____.
A) information pathways
B) vertical markets
C) distribution channels
D) proxy networks
E) horizontal markets

Accepted Answer

Distribution channels are the routes through which goods or services travel from the producer or provider to the end user or customer.

Question 7

_____ hold intellectual property not with the goal of bringing novel innovations to market but instead in hopes that they can sue or extort large settlements from others.

Accepted Answer

The answer of _____ hold intellectual property not with the...

Question 8

Which of the following is not highlighted as a source of switching costs?
A) Learning costs
B) Information and data
C) Search costs
D) Viral marketing
E) Loyalty programs

Accepted Answer

Viral marketing is not highlighted as a source of switching costs. Switching costs refer to the expenses or inconveniences that consumers or companies face when changing products or services, such as learning new systems (learning costs), transferring information and data, searching for alternatives (search costs), or losing benefits from loyalty programs. Viral marketing, however, is a strategy to promote a product or service, not a cost associated with changing between options.

Question 9

_____ exist when a product or service becomes more valuable as more people use it.

Accepted Answer

The answer of _____ exist when a product or service...

Question 10

List the various components of a value chain and give a brief description of each of them.

Accepted Answer

The answer of List the various components of a value...

Question 11

_____ exist when consumers incur an expense to move from one product or service to another.
A) Network effects
B) Switching costs
C) Economies of scale
D) Competitive advantages
E) Profit margins

Accepted Answer

Switching costs refer to the expenses or inconveniences that consumers face when changing from one product or service to another.

Question 12

The acronym API stands for:
A) Access Programming Interface
B) Application Processing Inquiry
C) Access Processing Interface
D) Application Programming Inquiry
E) Application Programming Interface

Accepted Answer

API stands for Application Programming Interface, which is a set of protocols, routines, and tools for building software and applications.

Question 13

Rivals such as ________________ and ________________ once made their own chips, but sold off manufacturing when their smaller market shares couldn't justify the Intel-sized multi-billion dollar table stakes needed to stay in the game.

Accepted Answer

The answer of Rivals such as ________________ and ________________ once...

Question 14

The category of enterprise software known as ________________ is implemented in modules, offering the potential of automating an organization's entire value chain.

Accepted Answer

The answer of The category of enterprise software known as...

Question 15

Consumers buying commodities are highly _____ since they have so many similar choices.
A) quality-conscious
B) price-focused
C) brand-driven
D) technologically discriminating
E) loyal

Accepted Answer

Consumers buying commodities are highly price-focused because commodities are often similar in nature, leading consumers to prioritize price over other factors.

Question 16

If a new entrant hopes to attract customers from an established incumbent, the new entrant must ensure that the value they offer exceeds the incumbents' value in addition to any perceived _____.
A) switching costs
B) market depreciation
C) brand benefits
D) advertising expenses
E) scale advantages

Accepted Answer

Switching costs are the costs that a customer incurs as a result of changing from one supplier to another. These can include financial costs, time, effort, and the risk of moving to a new product or service. For a new entrant to attract customers from an established incumbent, they must offer value that not only exceeds the incumbent's value but also covers any perceived switching costs the customer might face.

Question 17

How does FreshDirect leverage an imitation-resistant value chain to repel rivals?

Accepted Answer

The answer of How does FreshDirect leverage an imitation-resistant value...

Question 18

_____ Law is said to be at play when the value of a product or service increases as its number of users expands.
A) Amdahl's
B) Turing's
C) Zuckerberg's
D) Metcalfe's
E) Moore's

Accepted Answer

Metcalfe's Law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system. This principle is often applied to the internet, social networks, and other platforms where the number of users can significantly impact the network's value.

Question 19

_____ are products or services that are nearly identically offered from multiple vendors.

Accepted Answer

The answer of _____ are products or services that are...

Question 20

Businesses benefit from economies of scale when the cost of an investment can be:
A) spread across increasing units of production.
B) used in serving a niche and loyal customer base.
C) used to build a brand image for products through advertising.
D) leveraged to recruit consumers to promote a product or service.
E) diverted to implementing technology upgrades in the business model.

Accepted Answer

Economies of scale occur when the cost per unit of production decreases as the volume of production increases, allowing businesses to spread the fixed costs of an investment over a larger number of units, thereby reducing the cost per unit.

Quiz 2: Strategy and Technology: Concepts and Frameworks for Understanding What Separates Winners From Losers

The acronym NPE stands for:

Diagram and label the value chain, listing all primary and secondary components.

The patent system is often considered to be unfairly stacked against start-ups because:

Apple's dominance of smartphone and tablet markets has allowed the firm to lock up 60 percent of the world's supply of advanced touch-screen displays, and to do so with better pricing than would be available to smaller rivals. This is an example of:

The paths through which products or services get to customers are known as _____.

_____ hold intellectual property not with the goal of bringing novel innovations to market but instead in hopes that they can sue or extort large settlements from others.

Which of the following is not highlighted as a source of switching costs?

_____ exist when a product or service becomes more valuable as more people use it.

List the various components of a value chain and give a brief description of each of them.

_____ exist when consumers incur an expense to move from one product or service to another.

The acronym API stands for:

Rivals such as and once made their own chips, but sold off manufacturing when their smaller market shares couldn't justify the Intel-sized multi-billion dollar table stakes needed to stay in the game.

The category of enterprise software known as ________________ is implemented in modules, offering the potential of automating an organization's entire value chain.

Consumers buying commodities are highly _____ since they have so many similar choices.

If a new entrant hopes to attract customers from an established incumbent, the new entrant must ensure that the value they offer exceeds the incumbents' value in addition to any perceived _____.

How does FreshDirect leverage an imitation-resistant value chain to repel rivals?

_____ Law is said to be at play when the value of a product or service increases as its number of users expands.

_____ are products or services that are nearly identically offered from multiple vendors.

Businesses benefit from economies of scale when the cost of an investment can be: