Question 1

11,Between July 2012 and August 2014,Uber launched in 42 countries outside the US.The speed of this global rollout may be viewed as an attempt to pre-empt the market for ride-sharing services.

Accepted Answer

The statement accurately describes Uber's global rollout strategy during the specified time period.

Question 2

Competitive advantage without purposeful activity by a firm-it may arise through it being favored by an external change.

Accepted Answer

Competitive advantage can indeed arise without purposeful activity by a firm if it is favored by an external change, such as a change in the market or industry landscape. However, sustained competitive advantage typically requires purposeful and strategic actions by a firm.

Question 3

The main strategy implication of the Boston Consulting Group's analysis of experience curves was that firms should avoid cutting prices in order to expand market share.

Accepted Answer

The main strategy implication of the Boston Consulting Group's analysis of experience curves was that firms should cut prices in order to expand market share. As firms produce more, they gain experience and become more efficient, allowing them to lower their costs and prices. This lower pricing can then attract new customers and expand market share.

Question 4

Causal ambiguity-difficulties over diagnosing the sources of a rival's competitive advantage-creates uncertain imitability-uncertainty over the ability to replicate that competitive advantage.

Accepted Answer

Causal ambiguity refers to the difficulty in determining the specific sources of a rival's competitive advantage. This uncertainty creates difficulties in replicating the advantage, as it is unclear which factors are important for success. Therefore, causal ambiguity leads to uncertain imitability.

Question 5

The fact that a firm's "activity system" comprises closely linked,complementary activities simplifies the task of imitating a competitor's strategy.

Accepted Answer

The statement is false. The interdependency and complexity of a firm's activity system make it challenging to imitate a competitor's strategy.

Question 6

Kim and Mauborgne's "strategy canvas" is a tool for identifying novel recombinations of product attributes.

Accepted Answer

The strategy canvas is indeed a tool used by Kim and Mauborgne to identify unique combinations of product attributes that can differentiate a company's offering in the market.

Question 7

Of the two sources of superior profitability,industry attractiveness and competitive advantage within an industry,the latter is more important.

Accepted Answer

Competitive advantage within an industry allows a company to outperform its competitors, even if the industry itself may not be particularly attractive. Therefore, having a competitive advantage is more important for achieving superior profitability than relying solely on industry attractiveness.

Question 8

If a firm is more profitable than its rivals,this invariably means that it possesses a competitive advantage.

Accepted Answer

Profitability can be influenced by various factors such as market conditions, operational efficiency, or temporary advantages that may not necessarily equate to a sustainable competitive advantage.

Question 9

If the prices of securities fully reflect all the information available,then passive investors are best advised to invest in index-based mutual funds (unit trusts)with the lowest administration costs.

Accepted Answer

If prices fully reflect all available information, then it is unlikely for active investors to consistently outperform the market. In this case, investing in index-based mutual funds with low administration costs is a suitable option for passive investors to achieve market returns at a lower cost.

Question 10

Most of the business models deployed in electronic commerce have no historical precedence

Accepted Answer

Many business models used in electronic commerce, such as online retailing, subscription services, and digital marketplaces, have historical precedents in traditional commerce, adapted for the digital environment.

Question 11

A firm's competitive advantages can only be sustained if it is protected by some form of "isolating mechanisms."

Accepted Answer

Competitive advantages such as proprietary technology, brand recognition, and economies of scale can only be sustained if they are protected by isolating mechanisms such as patents, copyrights, trade secrets, and high barriers to entry. Without these protections, competitors can quickly imitate or replicate the advantage, eroding its value for the firm.

Question 12

Causal ambiguity is a type of isolating mechanism.

Accepted Answer

Causal ambiguity refers to situations where it is difficult to discern what caused a certain outcome or result. Isolating mechanisms are mechanisms that prevent gene flow and promote speciation. The two concepts are unrelated.

Question 13

The main challenge of business model innovations is conceiving of novel business models,not implementing them.

Accepted Answer

The main challenge often lies in the implementation of novel business models rather than just conceiving them, as it involves overcoming organizational inertia, aligning with customer needs, and adapting to market dynamics.

Question 14

Most business model innovation involves novel approaches to creating and/or capturing value within an industry.

Accepted Answer

Business model innovation typically involves finding new ways to generate revenue or reduce costs, or identifying untapped market segments to create value. These innovations can often disrupt existing industries and change the competitive landscape.

Question 15

There are two primary sources of competitive advantage: cost advantage and differentiation advantage.

Accepted Answer

This statement is true. Cost advantage involves having lower costs than competitors, while differentiation advantage involves offering unique or superior products/services compared to competitors. These two sources of competitive advantage can help a company stand out and succeed in a crowded market.

Question 16

The cost reductions that firms derive from moving down their experience curves are mainly the result of learning which increases the productivity of labor.

Accepted Answer

Moving down the experience curve results in cost reductions due to learning which increases the productivity of labor. This is a widely accepted concept in the field of economics and operations management.

Question 17

In order to discover a "blue ocean" of uncontested market space,a firm must use technological innovation to create a new product market

Accepted Answer

Creating a new market does not always require technological innovation. It could be achieved through a different business model, target audience, or unique value proposition. The key is to find a space where competition is low, or non-existent, and to create value for customers that they cannot easily find elsewhere.

Question 18

Strategic innovation comprises the introduction of novel products or processes that embody new technology

Accepted Answer

The answer of Strategic innovation comprises the introduction of novel...

Question 19

Sustainable competitive advantage can be established in all types of market-including those financial markets deemed to be "efficient."

Accepted Answer

In efficient financial markets, prices reflect all available information, making it difficult for investors to achieve a sustainable competitive advantage through information asymmetry or market timing.

Question 20

A contrarian strategy-doing the opposite to what the majority of other market participants are doing-is likely to generate superior returns in markets subject to systematic behavioral trends.

Accepted Answer

This statement is generally true, as contrarian strategies aim to take advantage of behavioral biases and herd mentality that can cause mispricing in the market. However, it may not hold true in all situations and markets.

Quiz 7: B :The Sources and Dimensions of Competitive Advantage