Bus J401 Chapter 7

Network effects arise in an industry where:
the size of the network of complementary products is a primary determinant of demand for an industry’s product
Which of the following strategies should a company NOT adopt if it wants to win a format war?
Charging extremely high license fee for the technology
With reference to high-technology industries, which of the following is an example of a technical standard?
the layout of keys on a keyboard
Vensus Corp. a high-technology, gadget-making company had introduced a gaming console with attractive features. Even though the console is priced modestly and has better features that the existing ones, it has failed as many customers are apprehensive about buying it. In order to create demand, Venus Corp. should:
ensure that there are adequte complementary products
Consumers will bear the costs of switching technologies if:
the benefits of adopting the new technology outweigh the costs of switching
switching costs, in the context of technology industries, refer to the costs that:
customers need to bear to abandon an established standard and adopt a new standard
Which of the following is a disadvantage of first movers?
They run the risk of building the wrong resources and capabilities
Which of the following is NOT true of high-technology industries?
First movers cannot create switching costs for their customers
When standards are part of the public domain, they can be used:
freely by any company
Cell phone technology is replacing traditional wired phone technology. This is an example of a(n):
technological paradigm shift
which of the following statements is true about technological paradigm shifts?
They have the potential to threaten the survival of established industries
When reference to high-technology industries, which of the following statements is true about technical standards?
They emerge because there are economic benefits associated with them
In order to work towards winning a format war, a company should:
develop its own killer applications
Which of the following is NOT a basic strategy for a first mover?
Discourage development of complementary assests
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 manufactures. In this sections, the specifications for jet blades can be referred to as:
technical standards
When a first mover does not have complementary assets, barriers to imitations are high, and there are several capable competitors, the first mover should:
enter into a joint venture toprotect the products
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
Which of the following statements is true of technology in industries?
technology in industries is revolutionizing aspects of the product even in those not typically considered high-tech
Which of the following is true of first movers?
The first mover that creates a revolutionary product is in a monopoly position
With reference to technical standards, a dominant design refers to:
a common set of features of design characteriscs
Aggressive marketing in the context of format wars:
helps a company jump-start demand
____ 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.
Killer applications
Which of the following statements is true about marginal costs in high-technology industries?
They include the costs of packaging and product distributino

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