BCOR 2304 Midterm

Which 2 of the following variable can managers primarily manipulate in order to answer the question, "How should we compete?"

- Cost - Value

The goal of a _______________ strategy is to achieve expenses below those of competitors while maintaining similar value. A firm with this strategy could or could not achieve differentiation parity.

- Cost leadership

Successfully transitioning from one stage of the industry life cycle to another is referred to as:

- Crossing the chasm

Economies of scale are:

- Decreases in cost per unit as output increases

Which of the following are business strategies that JetBlue pursued in order to gain a competitive advantage?

- Differentiation - Cost leadership

A successful blue ocean strategy requires strategists to reconcile the trade-offs between:

- Differentiation and cost leadership

What is one of the benefits of pursuing a differentiation strategy when it comes to the power of suppliers?

- Differentiation provides protection against substitute products by lowering prices

Which two customers segments make up the largest percentage of the market potential?

- Early majority, late majority

Why are trade secrets useful?

- Entrepreneurs can keep an idea/ process confidential and sell/ license it as a trade secret - Lives as long as it is secret - Employers may have people sign noncompete documents to protect information such as clients, marketing ideas, and unique strategies

The concept of a _______________ attempts to combine both learning effects and process improvements

- Experience curve

As a rule of thumb, the stronger the five forces, the higher the industry's profit potential, which causes the industry to become less attractive for competitors

- False

When pursuing a blue ocean strategy, a firm in a crowded marketplace attempts to out-compete rivals on both cost and product features with the goal of gaining market share at the expense of other competitors in the same industry

- False

Copyrights can protect all of the following except

- Molded plastic parts

A producer of consumer headphones successfully differentiates its products with a patented noise-cancelling technology and celebrity endorsements will enjoy which of the following benefits?

- The ability to charge a premium price - Less intense competition from imitators

Enterprise Machinists is always improving on its core competencies by training its machinists conveniently so the they are equipped to deal with technological changes and advancements

- This is called dynamic capabilities

What is the role of the Office of International Patent Cooperation established by the U.S. Patent and Trademark Office (USPTO)?

- To advance towards a more harmonized patent system

A patent prevents anyone other than the owner from creating, using, or selling the defined invention

- True

Industries often tend to follow a predictable industry life cycle

- True

Intellectual property represents significant assets to an entrepreneur and should be understood before seeking the services of an attorney

- True

When selecting a lawyer, you should ensue that they understand all possible circumstances and results related to any legal action

- True

What describes the internal activities a firm engages in when transforming inputs into outputs?

- Value chain

A firm that manages to avoid competition entirely by offering a product or service that creates an uncontested market space is engaging in:

- Value innovation

The four step innovation process beings with:

- an idea

3 Steps of the trademark registration process

1. A simple form that can be downloaded and submitted by mail or electronically needs to be completed to file an application 2. The Patent & Trademark Office provides a serial number to a trademark application and sends a filing receipts to the applicant 3. An examining attorney at the PTO determines as to whether the trademark is suitable for registration

What are the three most important value drivers that managers can use to create a competitive advantage?

1. Complements 2. Customer service 3. Product features

Place the four steps of innovation process in order from first to lat

1. Idea 2. Invention 3. Innovation 4. Imitation

Stages of the industry life cycle:

1. Introduction 2. Growth 3. Maturity 4. Decline 5. Shakeout

Path dependence describes a situation in which:

A process where the options one faces in the current situation are limited by decisions made in the past

How does the resource-based model view resources?

As the main driver of performance

Which example best exemplifies a platform business

Myra operated an industrial test kitchen in which local growers bring their produce to local chefs who use the kitchen to try new recipes and determine which produce to buy

What are the firms current level of intangible resources?

Resource stocks

Core competencies of a business are generated by the interaction of:

Resources and capabilities

What describes a situation in which different social and business systems interact with one another?

Social complexity

Are isolating mechanisms barriers to imitation?

Yes

Strategic management

an integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage

Innovations that target NEW markets and represent a major break from existing technologies or ways of thinking, such as the camera, the touch-screen smart phone, or the decoding of the human genome, are example of what type of innovation?

- Radical

It is coming for firms to get their start with which type of innovations?

- Radical

The most significant challenge that Jet Blue faced in implementing its business strategy was:

- Reconciling trade-offs between cutting costs and providing superior service

In an environment where products are becoming commodities with fewer differentiated product features, it is impossible for one retailer to gain market share without another losing it. This is an example of a:

- Red ocean

A manufacturer of electronic components can use its manufacturing machines to product many different components. In this case, the firm benefits from an economy of _____________, reducing overall production costs by finding multiple uses for its components and facilities

- Scope

During the shakeout stage of the industry life cycle, profits degrade for:

- All but the most efficient firms

If two firms produce very similar products at the same rate of output, and firm A is able to achieve lower per-unit costs than firm B by taking advantage of a new manufacturing technology, firm A is benefitting from:

- An experience curve effect based on progress innovation

A company's goal-directed plans regarding how to compete for advantage is known as the firms:

- Business level strategy

What is a copyright?

- Protects the original works of authorship. The protection in a copyright does not protect the idea itself, thus allows someone els to use the idea or concept in a different manner

A firm that successfully leverages network effects can

- Push its industry into the growth stage

When the laptop market overtook the desktop market, Blue Tech Inc., a leader in desktop technology, was left at a competitive disadvantage. Later, Blue Tech Inc.'s management channeled all of the company's efforts and revenue to develop an efficient laptop from scratch in less than a year. However, the company failed because Blue Tech Inc.'s models were inferior to the third- and fourth-generation models its competitors were selling. In this scenario, Blue Tech Inc.'s failure can be best attributed to:

- Time compression diseconomies

A _________________ requires protection against others revealing or disclosing information that could be damaging to a business

- Trade secret

Which capability is required to create superior product features?

Research & Development

What are the key assumptions behind the resource-based model of the firm?

Resource heterogeneity and resource immobility

How can a firm with valuable, rare, and inimitable resources be successful?

Staying organized to capture value

Which of the following is NOT considered an important macro-environmental influence on businesses (that is, a potential influence beyond that one of the industry alone)?

- Bargaining power of suppliers

Why do many firms fail to successfully implement a blue ocean strategy?

- Because they end up being "stuck in the middle," unable to increase value and lower costs at the same time

Which of the following is primarily a value driver?

- Complements

How to compete on a business level is defined by the variable value and cost. Together, they define the:

- Economic value created

A firm that increases its output of a given product and experiencers of a simultaneous decrease in per unit costs is taking advantage of _____________

- Economies of scale

What are the savings that come from producing two or more different outputs a lower cost than producing each output individually?

- Economies of scope

In the maturity stage of the industry life cycle, industry growth:

- Flattens or even declines

At which stage of the industry life cycle does the size of the market expand rapidly?

- Growth

Which type of innovation applies to existing markets and existing technologies?

- Incremental

What is true about a blue ocean strategy?

- They have an untapped market space & increased demand

The invention of small desk-top copiers to create a new consumer market using the same technology as large, stand-alone copiers is an example of a _______________ innovation.

- Architectual

DigitalHealth Electronics Inc. builds diagnostic devices and was the first to develop a compact MRI scanner by reconfiguring the components of the MRI technology. What type of innovation is this?

- Architectural innovation

Why does the learning curve go down when productivity is considered?

- As workers repeatedly engage in an activity that become more efficient, driving down costs

Time compressions diseconomies occur when a firm tries to reach an outcome in a reduced amount of time

- Attempting to get a good outcome in less time tends to be ineffective

Value drivers known as _____________ add value to a product or service when they are consumer in tandem with the focal product

- Complements

Which type of strategy is being used if company offers a product at a lower cost than its competitors?

- Cost leadership

Core competencies can help a company achieve:

- Creating higher value for customers - Differentiating its products and services - Offering comparable products at lower costs than rivals

Which of the following assets is most likely to be considered a rare resource that is contributing to its competitive advantage?

- Design patents

A ______________ strategy attempts to increase the perceived value of a precut while controlling costs

- Differentiation

A ________________ strategy attempts to increase the perceived value of a product while controlling costs

- Differentiation

A _____________________ strategy aims to create higher value for customers by offering products with unique features but with a similar level of costs to those with competing products

- Differentiation

What is one of the benefits of pursuing a differentiation strategy when it comes to the power of suppliers?

- Differentiation provides protection against an increase in input prices

What question is asked along the horizontal axis of the markets and technology framework?

- Does the innovation boil on existing technologies or create new ones

It is challenging for firms to "cross the chasm" because:

- Each stage of the industry life cycle features a different group of customers with different preferences and demands

Which of the following are components of a cost-leadership strategy?

- Lowest costs in the industry - Acceptable value

In the __________ stage of the industry life cycle, a few large firms compete for a hare of market that has reached its maximum size

- Maturity

In the __________ stage of the industry life cycle, a few number of large firms compete for a share of a market that has reached its maximum size

- Maturity

Increase in the value of a product or service that result from a corresponding increase in the number of users is known as the:

- Network effect

Increases in the value of product or service that results from a corresponding increase in the number of users are known as:

- Network effects

Which of the following are examples of ways that large retailing firm can increase the perceived value of its offerings by focusing on customer service?

- Offering a "no questions asked" return policy - Maintaining a domestic call center that is open 24 hours a day

Which government office is responsible for the federal registration of trademarks?

- Patent and Trademark Office

Which of the following can help a firm extend its competitive advantage?

- Path dependence - Better expectations of future resource value - Intellectual property protection

An enterprise that creates value by matching external producers and consumers in a way that creates value for all participants and that depends on the infrastructure that the platform manages is a:

- Platform business

Which competitive forces can result in an erosion of margins for both differentiation and cost-leadership business strategies?

- Power of buyers - Threat of entry - Power of suppliers

A firm that successfully leverages network effects can:

- Push its industry into the growth stage

The shakeout stage of the industry life cycle is dominated by:

- The early majority

One of the largest customer segments of the market that includes customers who search the products, wait until new-product kinks have been resolved, and purchase from well-establish companies is:

- The late majority

A significant difference between the early majority and late majority is that:

- The late majority is not as confident using new technologies

Which of the following best defines economies of scope?

- They are savings that come from producing two or more outputs at less costs than producing each output individually

In terms of productivity, what is true of learning curves?

- They go down

Which of the following are characteristics of the early majority?

- They weigh the benefits and costs carefully - They have a strong sense of practicality

It is mandatory that a parent application must include _____________-

- A thorough history and description of an invention and claims for its usefulness

What is a trademark?

- A word, symbol, design, slogan, or even sound that identifies the source or sponsorship of certain goods - Lasts indefinitely

DaShawn likes to do a lot of research before he buys a new product and relies on the endorsement by others. He also wants to be sure the product will be practical. DaShawn is likely a member of which type of customer?

- Early majority

Positive adjustments in product features, customer service, and complements may enable managers to:

- Improve the firm's strategic position

What are the types of innovation?

- Incremental - Architectual - Disruptive - Radical

Which of the following are input factors?

- Information technology services - Capital - Raw materials - Labor

When a company introduces a new product or process or business model with the intel to gaining a competitive advantage, that company is engaging in:

- Innovation

Two important features that managers can adjust in an effort to improve the firm's strategic positions are:

1. Product features 2. Customer service

As Jet Blue grew, what occurred during the years following 2007?

It suffered a competitive disadvantage

"If you get this job, will you focus more on industry effects or firm effects?"

- "Firm effects. I will be able to have the most impact on those"

Which statement describes the long tail?

- A large amount of revenue derived from. small number of units along almost unlimited choices

In addition to having the lowest cost, a low-cost leader is likely to have

- A large market share

An architectural innovation is

- A new product in which existing technologies are used in a novel way to create new markets

The initial application to the USPTO provides evidence of first to market is known as:

- A provisional patent application

What resources/capabilities helped Five Guys gain a competitive advantage and develop a successful restaurant?

- Carefully choosing potato suppliers - Focusing on such details as store layout/ design

Unique features and attributes that differentiate a product from competitors' offerings allow the firm to:

- Charge premium pricing

During the decline stage of the industry life cycle, product innovation efforts:

- Come to a halt

To prevent other form copying her ideas, the entrepreneur should not send drawings with the patent applications

FALSE

The value chain prospect is applicable primarily to high tech firms in rapidly changing environments

False

When is a resource considered valuable?

If it helps a firm deal with an external threat

Is a competitive advantage most often maintained indefinitely?

No

Is uncertainty about a resource an isolating mechanism?

No

Which of the following statements about the maturity stage of the industry life cycle is true?

Only a few large firms remain

___________________________ suggests that sometimes even random events may have large impacts on an outcome

Path dependence

What should a firm do in order to be organized to capture value?

The must have: - organizational structure - coordinating systems

What does a business level strategy outline?

The steps a manager will take to achieve competitive advantage in a single product market

How are intangible resource stocks acquired?

Through investments over time in intangible resources

A firm's network of interconnected activities is referred to as a strategic activity system because activities that are interconnected are very difficult for competitors to copy effectively

True

VRIO framework

Valuable, Rare, Inimitable, Organized - explains/ predicts what resource attributes underpin competitive advantage

direct imitation and substitution

When a competitor has developed a product that works to take away your competitive advantage

Economies of Scope

When most products can be produced using the same resources and technology, lowering the cost structure while widening the portfolio

How can a firm sustain a competitive advantage over time?

By having a dynamic fit between its internal strengths and external environment

What describes a situation where the cause and effect of a phenomenon are not readily apparent?

Casual ambiguity

A tablet manufactures that includes a free stylus with every purchase is using what to enhance users' experiences and increase the perceived value of its tablets?

Complements

How is a cost leader protected from threats from powerful suppliers?

It is more able to absorb price increases through accepting lower margins

The section of the patent application which provides the criteria by which any infringement will be determined is the:

- Claims section

The negative effect of innovative ride-sharing services on tradition taxi cab companies is an example of:

- Creative destruction

A significant difference between technology enthusiasts and early adopters is that:

- Early adopters are interested in how a new technology will improve their lives, rather than in the details of the technology itself

Simone was the first among her peers to try the new unicorn hair dye. For months she was the only person with unicorn hair. After some time, though, the product became available everywhere, and nearly every other person began sporting unicorn har, even Simone's mom. This situation describes which of the following?

- Crossing the chasm

The Ritz-Carlton provides a personalized customer experience based on sophisticated analysis of data gathered about each guest. This focus on _____________ allows the total to increase its perceived value.

- Customer service

A struggling retailer seeking to implement a blue ocean strategy is likely to experience difficulty with ____________________________ & ____________________________

- Cutting costs and increasing value at the same time

Demand declines most rapidly in the _______________ stage of the industry life cycle

- Decline

In the __________ stage of the industry life cycle, falling demands leads to a reduction in market size.

- Decline

During the growth stage of the industry life cycle, ___________ increases rapidly

- Demand

________________ tends to capture population characteristics related to age, gender, family size, ethnicity, sexual orientation, religion, and socioeconomic class

- Demographic

Which of the following is a contract that grants the owner protection, based on the appearance of an object?

- Design patent

Customers who desire a product because it stokes their imagination and creativity are known as:

- Early adopters

The customer segment known as ____________ enjoys testing product prototypes and providing voluntary feedback that companies use to perfect their products:

- Technology enthusiasts

The customer segment known as _____________ enjoy testing product prototypes and providing voluntary feedback that companies use to perfect their products

- Technology enthusiasts

Which is the most common customer segment in the introductory stage of the industry life cycle?

- Technology enthusiasts

A company that achieves differentiation parity at a lower cost has implemented a successful cost-leadership strategy

- True

Implementing a blue ocean strategy requires making competition irrelevant and creating a new market space, otherwise known as:

- Value innovation

If the problem with a business strategy results in ambiguity, managers will:

- have a difficult time developing a theory to deal with the problem

What is the relationship between innovation and competitive advantage?

- Innovation is a powerful weapon for gaining and maintaining competitive advantage

An auto manufacturer that has access to cheaper labor and raw materials than its rivals will have a competitive advantage regarding lower cost of ___________ factors

- Input

Which statement best describes the speed of innovation over the past hundred years?

- It has accelerated dramatically

Which of the following statements about a business pipeline is true?

- It is the traditional system of horizontal business organization

Because it targeted a new market and used new technologies, the first mass-produced automobile is considered a ______________ innovation

- Radical

Benny's Baos had an edge in the market, but other companies began to enter the market. Benny is now losing customers even though he has launched an aggressive marketing campaign in an attempt to attract customers. Benny's Baos is likely in the _____________ stage of the industry life cycle

- Shakeout

The interaction of many individual systems in the operation of company often lead to casual ambiguity because of:

- Social complexity

One of the risks of pursuing a blue ocean strategy is that a firm can find itself:

- Stuck in the middle