Professional Documents
Culture Documents
Technical standards create benefits primarily for those firms that do not adhere to them
False
In the past, format wars have been relatively common in the consumer electronics industry.
True
At the moment, Motorola appears to have the advantage in format for the next generation of TV and
DVD players.
False
It can be argued that Microsoft's near monopoly of PC operating systems helped raise the level of
industry profitability
True
Battles to set and control technical standards in a market are referred to as product positioning.
False
Technical standards always exist in the public domain so that any company can use them.
False
Ownership of an industry standard that is protected from imitation by patents and copyrights is a weak
organizational resource.
False
Consumers chose Microsoft Windows operating system as the technical standard through their many
purchases of that software.
True
Dolby Laboratories' exploited a positive feedback loop in becoming the standard for sound quality.
True
Digitalization has made it more difficult to protect some intellectual property rights.
True
When a company is trying to win a format war it should license its format for a low fee rather than a
high fee.
True
Marginal costs in high-technology industries tend to stay very low as production rises.
True
The law of diminishing returns states that marginal costs fall as a company tries to expand output.
False
One strategy for success in high-tech industries is to keep prices low and thus increase sales volume.
True
When standards are part of the public domain, the can be used
freely by any company
When an industry's products rely on a common set of features, these features are called a
dominant design
Which of the following economic benefits result from the use of standards?
All of these choices
Intellectual property refers to
the product of any intellectual and creative effort
Matsushita licensed its VHS technology to rivals, while Sony kept its Beta technology proprietary. This
action allowed Matsushita to
win the format war
What advice would you give to a firm that wants to exploit network effects?
Create incentives for other firms to develop complementary products.
Which of the following strategies should a company not adopt if it wants to win a format war?
Price the product high to recover steep upfront costs.
When it comes to developing a business model and strategies that will lead to competitive advantage
and superior profitability, high-technology companies
often face similar situations
Consider a cost curve, with production volume on the horizontal axis and marginal costs on the vertical
axis. What shape would the marginal cost curve most resemble in a high-tech industry?
Straight and flat
In 2001, Intel spent $7.5 billion to upgrade its facilities so it could produce the Pentium 4 semiconductor
chip. Each chip cost $130 to make and sold for $200 each. What is the marginal cost of a Pentium 4
chip?
$130
Digitalization refers to
turning intellectual property into digital form
Which of the following actions will not help protect intellectual property rights?
Digitalizing creative output
Which of the following is not one of the benefits that first movers enjoy?
Lower pioneering costs
The various strategies that companies should adopt to win format wars revolve around
making network effects work in their favor and against their competitors
Licensing a format to other enterprises is often used by a company so that the company can
produce products that can be based on the licensed format
If a first mover has complementary assets, barriers to imitation are high, and capable competitors are
few, the first mover should
develop and market the innovation itself
If a first mover does not have complementary assets, barriers to imitation are high, and there are
several capable competitors, the first mover should
enter into a joint venture to protect the product
If a first mover does not have complementary assets, barriers to imitation are low, and there are many
capable competitors, the first mover should
license the innovation to others
A technological paradigm shift is most likely to occur in which stage of the industry life cycle?
Maturity
Cell phone technology is replacing traditional wired phone technology. This is an example of
technological paradigm shift
Which of the following will not help an established company in addressing the potential challenge of a
disruptive technology?
Distinctive competencies in the current business model
Technological disruption
causes firms to adopt a new business model
One of the great growth industries of the past few decades has been the wireless phone industry.
True
The globalization of production has been increasing as companies take advantage of lower barriers to
international trade and location economies.
True
Relative to the United States, Mexico has more advanced factors of production.
False
A company can increase its growth rate by taking goods or services developed at home and selling them
internationally.
True
Location economies refer to the economic benefits that arise from performing a value creation activity
at central headquarters.
False
Walmart's basic approach to overseas expansion has been to open retail outlets in each of the countries
to which it exports.
False
Local responsiveness may be driven by economic and political demands placed on companies by host
country governments.
True
A transnational strategy makes the most sense when there are strong pressures for cost reductions and
when demand for local responsiveness is minimal.
False
One advantage of a joint venture is that a company may benefit form a local partner's knowledge of the
many dimensions of a host country
True
An early mover entering a foreign country will experience many advantages but few or no
disadvantages.
False
The majority of programming for MTV networks now takes place overseas.
False
Which of the following has occurred in international trade over the past half-century?
All of these choices
When a company increases its growth rate by taking goods or services developed at home and selling
them internationally, it is
leveraging its existing products
When a company expands its sales volume through international expansion, it can realize cost savings
from economies of scale through all of the following except
improved responsiveness
When a company performs a value creation activity in the optimal location for that activity, wherever in
the world that might be, it is trying to capitalize on
location economies
Which of the following is not a necessity for leveraging the skills of global subsidiaries?
The firm must be pursuing a strategy of differentiation
Global expansion
can enable companies to increase their profitability and grow their profits more rapidly
The ability to realize cost economies from global volume is greatest in the case of
commodity-type products that serve universal needs
Clear Vision's decision to own a manufacturing facility overseas was not influenced by which of the
following factors?
Geographical proximity to India
Strong pressures for local responsiveness emerge when customer tastes and preferences.
Differ significantly between countries.
When entering an overseas market, which of the following factors should be considered?
All of these choices
Foreign subsidiaries play a major role in shaping the future direction of a company pursuing a
transnational strategy
Firms should choose likely countries for an international expansion effort based on all of the following
except
age of the country
A localization strategy is most appropriate when
consumer tastes and preferences differ substantially across nations
A company that enters a foreign market by entering into a licensing agreement with a local company
risks losing control over its technology to the venture partner
Which entry mode gives a multinational the tightest control over foreign operations?
Setting up a wholly owned subsidiary
Which of the following companies exemplifies the trend toward national markets merging into one large
global marketplace?
All of these choices
Which of the following entry modes allow a company to engage in global strategic coordination?
Wholly owned subsidiaries
What are the risks associated with licensing as a means of entering overseas markets?
All of these choices