Strategy and Technology – Part 2 – Flashcards
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Which of the following statements is true about establishing technical standards?
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Technical standards are often set by cooperation among businesses, without government help.
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Microsoft's near monopoly substantially reduces the risks facing the makers of complementary products and the costs of those products.
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True
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Libra Electronics has invented a new technology to make laptops that are extremely lightweight and unbreakable. The company is advertising aggressively and wishes to create demand for its new range of laptops. To attract customers, the company has priced the laptops attractively. However, in order to make profits, the company has priced the batteries required for the laptops extremely high. Which of the following is illustrated in this scenario?
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razor and blade strategy.
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Marginal cost refers to the costs of:
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producing one extra unit of product.
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Marginal costs in high-technology industries tend to stay very low as production rises.
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True
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Mathematica 1.0 was one of the most distinctive applications for the short-lived NeXT Computer. It still sets the standard for symbolic math and visualization on Windows, Mac, Linux, and Unix. Mathematica 1.0 can be described as a(n) _____ application.
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killer
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_____ are applications or uses of a new technology or product that are so compelling that customers adopt them in droves, curbing the demand for competing formats.
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killer apps
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Microsoft Word, the word-processing software, is so easy to use and has so many useful features that no other software can compete with it. Therefore, Microsoft Word can be described as a killer application.
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true
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Network effects arise in an industry where:
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the size of the network of complementary products is a primary determinant of demand for an industry's product
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One important advantage of being a first mover is that it guarantees success.
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false
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One strategy for success in high-tech industries is to keep prices low in order to increase sales volume.
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true
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Ownership of an industry standard that is protected from imitation by patents and copyrights is a weak organizational resource.
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false
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In order to work towards winning a format war, a company should:
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develop its own killer applications
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Switching costs are the costs that consumers must bear to switch from a product based on one technological standard to a product based on another technological standard.
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true
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Switching costs, in the context of technology industries, refer to the costs that:
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customers need to bear to abandon an established standard and adopt a new standard.
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Technical standards do not play any role in product differentiation.
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false
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Technical standards in high-technology industries are:
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specifications that producers adhere to when making a product or a component.
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technological disruption:
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compels firms to adopt new business models.
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Technological paradigm shifts occur when new technologies revolutionize the structure of the industry, dramatically alter the nature of competition, and require companies to adopt new strategies to survive.
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true
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The law of diminishing returns states that marginal costs fall as a company tries to expand output.
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false
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The layout of the keys on a computer keyboard is an example of a technical standard.
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true
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Aggressive marketing in the context of format wars:
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helps a company jump-start demand.
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The various strategies that companies should adopt to win format wars revolve around:
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making network effects work in their favor and against their competitors.
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Technical standards are often set by cooperation among businesses, without government help.
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true
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There is a set of fixed specifications for turbine blades for jet engines. The specifications include the material that needs to be used to manufacture the blades and also the specific dimensions that they need to have; the same specifications are used by all manufacturers. In this scenario, the specifications for jet blades can be referred to as:
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tec. standards
