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Q:
A music downloading software and an MP3 player are substitutes for one another.
Q:
The Weekly News bought the paper mill that supplied paper for printing its magazine. This is an example of horizontal integration.
Q:
According to Porters five-force model, the degree to which a firm relies on one or a few suppliers will influence its ability to negotiate good terms.
Q:
According to Porters five-force model, the threat of potential entrants is influenced by the height of entry barriers.
Q:
Low exit barriers intensify rivalry by making firms reluctant to abandon the industry.
Q:
When demand is increasing, there is less revenue to go around and firms will experience more competitive pressure.
Q:
In general, the more firms competing that are of comparable size, the more competitive the industry will be.
Q:
Formulating a technological innovation strategy first requires an accurate appraisal of where the firm currently is.
Q:
What is the danger of not having a strategic intent? In your answer, assume your company operates a hospital in a city with a population of 30,000 people, located about 50 miles away from a large city.
Q:
Explain the advantages and disadvantages of rewarding and promoting development of the core competency.
Q:
What are core competencies?
Q:
Recently, three cell phone companies announced the addition of a nationwide walkie-talkie service to supplement their regular cell phone service. Will this be a sustainable competitive advantage? Justify your answer.
Q:
Even though many aerospace manufacturing firms are very profitable, there are very few upcoming firms. Explain the reason using Porters five-force model.
Q:
When Faslow Medical Center changed its name to Faslow Hospital, it also unveiled a plan to build a medical tower doubling its physical facilities by 100% within the next 10 years. It also announced that its goal was to not only serve ExeterCounty, but the entire region including the 5 contiguous counties. This is an expression of:
a. vertically integration.
b. strategic intent.
c. core competencies.
d. supplier bargaining power.
Q:
When Western Franchise Services announced that its plans to go international in the next 15 years, it stated its:
a. core competence.
b. inventory of capabilities.
c. strategic intent.
d. supplier bargaining power.
Q:
Piezo Tech Solutions supplies hospitals with software to track insurance claims. Since insurance regulations and policies are always changing, its software needs to have the ability to be agile and responsive to change. In other words the software needs:
a. dynamic capabilities.
b. tacit resources.
c. rigid competencies.
d. to be path dependent.
Q:
How can core competencies be leveraged more effectively?
a. By encouraging exchange of resources across strategic business unit boundaries
b. By binding managers too closely to their respective business units
c. By utilizing the same resources for all types of projects
d. By viewing individuals as being employed by a particular strategic business unit
Q:
Which of the following statements is true of core competencies?
a. A firms core competency refers to a single ability.
b. A firms core competency is more than just a core technology.
c. An individual business unit has only one core competency.
d. A firms core competency is usually easy to imitate.
Q:
Prahalad and Hamel use the term _____ to refer to a harmonized combination of multiple resources and skills that distinguish a firm in the marketplace.
a. primary activities
b. tacit resources
c. socially complex resources
d. core competencies
Q:
Andrew is a gifted musician, with an instinctive knack for composing tunes that catch the publics imagination. The means by which he has does this is unclear and cannot be defined. This makes him a _____ resource.
a. socially complex
b. causally ambiguous
c. logistically outbound
d. logistically inbound
Q:
Which of the following is an example of a socially complex resource?
a. A team of graphic designers who combine their skills to create products
b. A food preservation technology that is available to most firms in the industry
c. A pharmaceutical firm which acquires land at a subsidized price from the government
d. A restaurant that procures its raw materials from a local market
Q:
Socially complex resources refer to:
a. resources or activities that emerge through the interaction of multiple individuals.
b. resources that cannot be defined in terms of a numerical value.
c. resources that require public sanction in order to be utilized for profit-making purposes.
d. resources that are shared by different parties thereby necessitating the need for legal intervention.
Q:
A resource can be extremely difficult to imitate if:
a. it can be readily codified in written form.
b. it is not path dependent.
c. it arises through the complex interaction of multiple people.
d. it is clear how the resource gives rise to value.
Q:
Which of the following would be an example of a tacit resource?
a. An oddsmaker who works for a large casino in Las Vegas and is correct 95 percent of the time
b. A boutique purchases hand-woven fabrics from local shops
c. A retail shoe chain that has prime locations in 200 malls across the country
d. A flashy ad campaign for a malt liquor
Q:
According to Michael Porters model of a value chain, which of the following is a support activity?
a. Accounting activities
b. Outbound logistics
c. Marketing
d. Inbound logistics
Q:
The Corner Shop is a leading supermarket in Chicago. According to Michael Porters model of a value chain, which of the following activities of the firm is a primary activity?
a. A training session for the floor attendants at The Corner Shop outlets
b. An advertising campaign for a new The Corner Shop outlet
c. The accounting function at The Corner Shop outlets
d. The hiring of lawyers to ensure the firm adheres to labor laws
Q:
Sams Sugar Co. is a leading cane sugar manufacturer. The company faced a threat of going out of business when a rival company introduced a zero-calorie sweetener to replace the high-calorie cane sugar. According to Porters five-force model, the two products are:
a. complements.
b. supplements.
c. intermediates.
d. substitutes.
Q:
Perfecto Espresso is a coffeehouse located opposite Chings Kitchen, a restaurant. According to Porters five-force model, the services and products provided by both are most likely to be classified as:
a. complements.
b. competitors.
c. substitutes.
d. intermediates.
Q:
Scripts & Scrolls Co. supplies printing paper to select publishing houses. When its customers asked for a discount in the cost of supplies, the company had to oblige fearing that the customers might withdraw pending contracts. This shows the increased:
a. bargaining power of buyers.
b. bargaining power of sellers.
c. threat of substitutes.
d. vertically integration of buyers.
Q:
Allure Fabrics supplied cotton, linen, and silk fabrics to various designer wear boutiques in and around Florida. The firm recently launched a boutique in Florida, under its brand name, which sells womens fashion apparel. Allure Fabrics is practicing:
a. forward vertical integration.
b. backward vertical integration.
c. horizontal integration.
d. substitution.
Q:
Perfecto Espresso is chain of coffee shops in the United States. Earlier it used to source its coffee from several coffee manufacturers. However, recently it started a coffee manufacturing firm under its own brand name. This is an example of:
a. forward vertical integration.
b. backward vertical integration.
c. horizontal integration.
d. substitution.
Q:
Factors that make it difficult or expensive to change suppliers or buyers are referred to as _____ costs.
a. transactional
b. opportunity
c. marginal
d. switching
Q:
According to Porters five-force model, if a buyer can threaten to backward vertically integrate, it will:
a. decrease the buyers bargaining power.
b. increase the buyers bargaining power.
c. increase the suppliers bargaining power.
d. lower the threat of entry into the industry.
Q:
Ceramic Customs Co. requires a specific type of ceramic to make custom-made tiles. Since only one supplier makes that particular ceramic, the firm is forced to source all of its supplies from it. The firm tried negotiating the price at which it purchases the material, but failed to get any reduction on the cost. This is because:
a. the supplier has more bargaining power than the firm.
b. the supply is unlimited.
c. the supply exceeds the demand.
d. the industry has barriers to entry.
Q:
According to Porters five-force model, the more suppliers there are, providing similar supplies to a particular industry:
a. the less powerful those suppliers will be.
b. the more powerful those suppliers will be.
c. the higher is the level of vertically integration in the industry.
d. the less powerful buyers will be.
Q:
Many people dream of opening their own restaurant someday and restaurant supply houses provide easy finance options for equipment purchases. Also, a high growth is projected for the restaurant industry sector. According to Porters five-force model, this is one of the reasons why the _____ in this industry is so high.
a. failure rate
b. exit barrier
c. threat of potential entrants
d. technological breakthrough
Q:
Mr. Crunchy Inc. is a firm that manufactures potato chips. With more and more people becoming health conscious, it made no profit in the last quarter. But with large initial investment, factories, and the high-technology chips-making machines, the firm found it difficult to abandon the industry. According to Porters five-force model, the company was facing a(n):
a. vertical integration.
b. exit barrier.
c. horizontal integration.
d. substitute threat.
Q:
Which of the following statements is true of Porters five-force model?
a. It states that the attractiveness of an industry is unaffected by the industrys degree of rivalry.
b. It fails to acknowledge the role of substitutes.
c. It is often used, in practice, to assess a specific firms external environment.
d. It emphasizes the stakeholder management issues that are likely to impact the firms financial performance.
Q:
A firms strategic intent helps in the development of new businesses and markets.
Q:
Dynamic capabilities enable firms to quickly adapt to emerging markets or major technological discontinuities.
Q:
In Prahalad and Hamels model, it is possible for a firm to develop core competencies to a set of abilities that enable it to quickly reconfigure its organizational structure and routines in response to new opportunities.
Q:
A firms emphasis on a scientific discipline that is central to its core competency can make the firm less attractive to individuals from other disciplines.
Q:
Path dependency refers to those abilities that make a firm more agile and responsive to change.
Q:
According to Prahalad and Hamel, a company that has identified 30 capabilities knows its core competencies.
Q:
The combination and harmonization of multiple abilities make core competencies difficult to imitate.
Q:
Resources of a tangible nature that can be readily codified are called tacit resources.
Q:
According to Porters value chain, firm infrastructure is a primary activity.
Q:
A strategic stakeholder analysis emphasizes the stakeholder management issues the firm ought to attend to due to their ethical or moral implications.
Q:
If a firms product is undifferentiated, buyers will typically experience lesser bargaining power.
Q:
Ammunition can be considered a complement for firearms.
Q:
What assumptions underlie the use of timing of entry strategies into the market for new products?
Q:
Since SmartShoe Inc. is the market leader in the gliding shoe market, it enjoys an excellent reputation. It was the pioneer of this new market and currently holds 40 percent market share. Now SmartShoe wants to introduce a new range of orthopedic shoes. Discuss how its reputation might affect its acceptance among distributors and consumers.
Q:
Loren has invented a new product that detects water leakages due to broken pipes and sends out an alarm similar to a smoke alarm. However, Loren has very little personal money to invest in this new product. He finally raised enough money to enter the market and began to experience some success. The product was not patentable because it was too similar to other existing technologies. Major corporations saw his success and have now entered the market with competing products. What will be the probable destiny of Lorens company?
Q:
Explain why sometimes the follower and not the first mover of a new technology is more successful in the marketplace.
Q:
Explain the reasons why other keyboards claimed to be more efficient were not able to replace the QWERTY keyboard. Which principle is illustrated in this scenario?
Q:
If a firm has a longer new product development process, it means that the firm will:
a. have a better chance to introduce a refined version of a competitors technology.
b. face a high possibility of losing to an early entrant.
c. have an increased ability to respond to changes in customer requirements.
d. overburden its development team by following a parallel development process.
Q:
New innovations typically tend to:
a. be adopted very slowly at first.
b. have a rapid initial takeoff.
c. provide high sales revenue when they are first introduced.
d. be adopted as soon as they are introduced.
Q:
If _____ is high, firms will have to enter a market early.
a. threat of competitive entry
b. entry barrier
c. inability to improve previous technology
d. customer ambiguity
Q:
Which of the following calls for an early entry into a market?
a. Immature enabling technologies
b. Unavailability of complementary goods
c. High customer uncertainty
d. Low entry barriers
Q:
A delayed entry into a market with a new technology is preferred when:
a. support by complementary goods providers is initially high.
b. enabling technologies are initially less mature.
c. customer uncertainty is low in the beginning.
d. the scope for improving over previous technologies is high.
Q:
There are more chances for a technology to be underdeveloped and its fit with customer needs unknown in the _____ market stage.
a. very early
b. late
c. maturity
d. mass
Q:
Which of the following statements is true of customer preferences?
a. The importance of technological features to customers stays constant over time.
b. Customers can differ from producers in their understanding of a new technology.
c. All pioneers of new-to-the-world technologies face customer uncertainty.
d. Other things being equal, more customer uncertainty favors earlier timing of entry.
Q:
Which of the following is true of a firm entering a market too early?
a. The distribution channel will be well established prior to its entry.
b. The technology and complements will be underdeveloped.
c. Competitors would have already captured controlling shares of the market.
d. The firm will not be able to reap the advantages of monopoly rent.
Q:
When Pioneer Athletics wanted to provide better landing mats for gymnasts, it asked its supplier Delta Foam Industries (DFI) used a new processes to manufacture higher quality, durable foam for use in its mats. This foam represents a(n) _____ for Pioneer Athletics.
a. network externality
b. monopoly cost
c. enabling technology
d. incumbent inertia
Q:
Which of the following is an example of an enabling technology for the computer hardware industry?
a. Laptops gradually replacing desktops at workplace
b. Computer hardware has zero utility without a microprocessor
c. Employees using anti-glare eyeglasses to increase readability from computer screens
d. Availability of special chairs with back support for people who work for long hours on computers
Q:
Component technologies that are necessary for the performance or desirability of a given innovation are referred to as _____ technologies.
a. architectural
b. diffused
c. primary
d. enabling
Q:
Which of the following is an advantage of being a later entrant into a market?
a. Firms can capture scarce resources.
b. Firms do not have to invest in exploratory research.
c. Firms have to develop their own supply and distribution channels.
d. Firms are unaffected by switching costs.
Q:
After much experimentation and trial and error, TechSmart launched a GPS-enabled shoe into the market. It was the first company to introduce such footwear. Later, several other firms also began to offer similar shoes. Which of the following is most likely to be true for TechSmart?
a. TechSmart had incurred significant research and development expenses.
b. TechSmarts ability to exploit monopoly rents will be low.
c. TechSmart will be able to exploit incumbent inertia of the late entrants.
d. TechSmart had to invest less on establishing distribution channels and generating consumer awareness, compared to firms that entered the market after it.
Q:
When Fun Bun, an international fast food chain, first moved into China, it had to teach farmers how to grow a particular variety of potatoes and bakers had to be taught to make hamburger buns. This is an example of:
a. corporate social responsibility.
b. an undeveloped supply channel.
c. incumbent inertia.
d. monopoly rents.
Q:
Fashion Fair, the first mover in the all year discount stores market, lost its market share to a late entrantBrand Fair. Brand Fair operated its discount stores solely over the Internet, which, in turn, saved a lot of expenses. However, Fashion Fair was unable to adopt the online store business model due to its existing contracts with suppliers and investment in a physical infrastructure. This is an example of:
a. incumbent inertia.
b. monopoly rents.
c. path dependency.
d. technology spillover.
Q:
The tendency of existing firms to be slow to respond to changes in the industry environment due to their large size, established routines, or prior strategic commitments to existing suppliers and customers is known as:
a. monopoly costs.
b. path dependency.
c. incumbent inertia.
d. technology trajectory.
Q:
Which of the following statements is true of first movers relative to early followers and late entrants?
a. Cost of developing necessary production processes and complementary goods is lower for first movers.
b. First movers are in a better position to exploit buyer switching costs and also to reap increasing returns advantages.
c. First movers, being incumbents, have greater ability than later entrants to respond to changes in the industry environment and adopt newer production processes.
d. First movers fail to capture scarce resources such as key locations, government permits, access to distribution channels, and relationships with suppliers.
Q:
Jupiter Inc., a software firm, is starting to face competition from the new entrant Coral Inc. Jupiter Inc. wants to prevent its existing customers from switching to Corals newly developed software. Which of the following measures should Jupiter Inc. adopt?
a. Ensure that customers find its software more convenient and simpler to use, as compared to that of Coral Inc.
b. Keep the initial cost of the software higher than that of Coral Inc.
c. Keep the prices of the complements required for the software higher than that of Coral Inc.
d. Ensure that fewer complementary products are availability for its products, as compared to that of Coral Inc.
Q:
Jacob had been using WordPerfect 5.1 for DOS for several years and was quite an expert at it. When his boss wanted him to change to a Windows-based system, Jacob told his boss that it would slow him down. Jacob also pointed out that it would cost a lot of money to train him to use the new system. This is an example of:
a. cognitive dissonance.
b. high switching costs.
c. high monopoly rents.
d. early entry continuation.
Q:
Alpen Inc. is a manufacturing firm that holds a patent for a new food processing machine, which is considerably more efficient and safe. Being the only firm that manufactures that product, Alpen Inc. charges a very high price for its products. This is referred to as _____.
a. monopoly rent
b. technology lag
c. incumbent inertia
d. absorptive capacity
Q:
If the aspects that customers have come to expect in a technology are difficult for competitors to imitate, a technology leader:
a. will have to bear monopoly costs.
b. can yield sustained monopoly rents.
c. will have lower bargaining power.
d. will have higher switching costs.
Q:
Marine Systems was the first company to develop inventory management software specifically for hotels and restaurants. Soon after Marine Sytems had launched its product, Unicorn Systems developed similar software. The software developed by Unicorn Systems outperformed the one developed Marine Systems, and it eventually became the market leader. Unicorn Systems is an example of a(n) _____.
a. pioneer
b. late mover
c. early follower
d. laggard
Q:
In the video game console industry, Magnitude was the first firm to introduce a console in the market. However, consumers were uncertain about the product, and its high costs discouraged consumers from purchasing it. Eventually, Magnitude withdrew the product from the market. A few years later, Mantel and Adventura came up with their respective gaming consoles and successfully established their products. Mantel and Adventura will be considered as:
a. pioneers.
b. early followers.
c. laggards.
d. late movers.
Q:
Doven Inc. pioneered software development in the 1970s and introduced its range of office tools well ahead of competitors. According to the classification scheme of entrants, Doven would be classified as a(n) _____.
a. first mover
b. early follower
c. early leader
d. laggard
Q:
The first entrants to sell in a new product or service category are referred to as _____.
a. pioneers
b. early leaders
c. early followers
d. laggards