MGMT 485 STudy Guide 2 Ch 7-8

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? a. $70 b. $130 c. $200 d. $7.5 billion divided by the number of chips produced e. $7.5 billion

$130

Which of the following economic benefits result from the use of standards? a. Compatibility b. Reduction in confusion c. Reduction in production costs d. Reduction of risk in supplying complementary products e. All of these choices

All of these choices

Which of the following factors is a disadvantage of being a first mover? a. First movers have to bear pioneering costs. b. First movers are prone to make mistakes. c. First movers run the risk of building the wrong resources and capabilities. d. First movers may invest in inferior or obsolete technology. e. All of these choices.

All of these choices

Which of the following has occurred in international trade over the past half-century? a. There has been a dramatic lowering of barriers to international trade. b. Tariff rates on manufactured goods traded by advanced nations have fallen. c. Regulations prohibiting foreign companies from entering domestic markets and establishing production facilities have been removed. d. The volume of world trade has increased dramatically. e. All of these choices.

All of these choices

A localization strategy is based on which of the following ideas? a. There is a convergence in the tastes of consumers in different nations of the world. b. There are substantial economies of scale to be realized from centralizing global production. c. Consumer tastes and preferences differ among national markets. d. There are cost advantages associated with manufacturing a standard product for global consumption. e. Competitive strategy should be centralized at the world head office.

Consumer tastes and preferences differ among national markets

A razor-and-blade strategy refers to lowering a company's cost structure. a. True b. False

False

A transnational strategy makes the most sense when there are strong pressures for cost reductions and when demand for local responsiveness is minimal. a. True b. False

False

An early mover entering a foreign country will experience many advantages but few or no disadvantages. a. True b. False

False

At the moment, Motorola appears to have the advantage in format for the next generation of TV and DVD players. a. True b. False

False

Battles to set and control technical standards in a market are referred to as product positioning. a. True b. False

False

By offering a standardized product to the global marketplace and manufacturing that product in each nation in which it does business, a multinational company can realize substantial scale economies. a. True b. False

False

Companies that pursue a global standardization strategy are trying to develop a business model that simultaneously achieves low costs and differentiates the product offering across geographic markets. a. True b. False

False

Digital music downloads have high marginal costs. a. True b. False

False

Even if they are constrained by a lack of capital, new entrants should avoid partnering with a larger company and go it alone. a. True b. False

False

If a company's competitive advantage derives from its control of proprietary technological know-how, it should either license its technology to others or pursue a joint venture. a. True b. False

False

Location economies refer to the economic benefits that arise from performing a value creation activity at central headquarters. a. True b. False

False

One important advantage of being a first mover is that it guarantees success. a. True b. False

False

Ownership of an industry standard that is protected from imitation by patents and copyrights is a weak organizational resource. a. True b. False

False

Technical standards always exist in the public domain so that any company can use them. a. True b. False

False

Technical standards create benefits primarily for those firms that do not adhere to them. a. True b. False

False

The law of diminishing returns states that marginal costs fall as a company tries to expand output. a. True b. False

False

Walmart's basic approach to overseas expansion has been to open retail outlets in each of the countries to which it exports. a. True b. False

False

The razor-and-blade strategy was pioneered by a. Procter & Gamble. b. Sony. c. Toyota. d. Ford. e. Gillette

Gillette

In which of the following circumstances does a global standardization strategy make the most sense? a. Global market standardization is not possible, and there are no significant economies of scale to be realized from centralizing global manufacturing. b. Global market standardization is possible, but there are no significant economies of scale to be realized from centralizing global manufacturing. c. Global market standardization is not possible, but there are significant economies of scale to be realized from centralizing global manufacturing. d. Consumer tastes and preferences differ among national markets, and economies of scale are insubstantial. e. Global market standardization is possible, and there are significant economies of scale to be realized from centralizing global manufacturing.

Global market standardization is possible and there are significant economies of scale to be realized from centralizing global manufacturing

A technological paradigm shift is most likely to occur in which stage of the industry life cycle? a. Embryonic b. Growth c. Shakeout d. Maturity e. Decline

Maturity

Aggressive marketing is a key factor in jump-starting demand to get potential early adopters to bear the switching costs associated with adopting a new innovation. a. True b. False

TRue

One strategy for success in high-tech industries is to keep prices low and thus increase sales volume. a. True b. False

TRue

A company can increase its growth rate by taking goods or services developed at home and selling them internationally. a. True b. False

True

A company may create value if it can leverage the skills created within subsidiaries and apply them to other operations within the firm's global network. a. True b. False

True

A localization strategy is most appropriate when there are substantial differences across nations with regard to consumer tastes and preferences and when cost pressures are not too intense. a. True b. False

True

A possible strategy for winning a format war is for a company to make sure that, in addition to the product itself, there is an adequate supply of complements. a. True b. False

True

A set of related technical standards that specify the common set of features or design characteristics of a product is called a dominant design. a. True b. False

True

An example of an important complementary asset is a state-of-the-art manufacturing facility. a. True b. False

True

An important ingredient of success in a strategic alliance appears to be cultural sensitivity. a. True b. False

True

An international strategy may not be viable in the long term and to survive, companies that can pursue it need to shift toward a global standardization strategy. a. True b. False

True

Companies that are locked out of a market are those in which consumers are unwilling to bear the switching costs required for them to abandon the established standard and adopt the new one. a. True b. False

True

Consumers chose Microsoft Windows operating system as the technical standard through their many purchases of that software. a. True b. False

True

Digitalization has made it more difficult to protect some intellectual property rights. a. True b. False

True

High-technology industries are those in which the underlying scientific knowledge that companies in the industry use is advancing rapidly. a. True b. False

True

In the past, format wars have been relatively common in the consumer electronics industry. a. True b. False

True

International licensing is an arrangement whereby a foreign licensee buys the rights to produce a company's product in the licensee's country for a negotiated fee. a. True b. False

True

Local responsiveness may be driven by economic and political demands placed on companies by host country governments. a. True b. False

True

Many experts believe that the world's economic system is moving toward a system in which national markets are merging into one huge global marketplace. a. True b. False

True

Microsoft Word 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 is a killer application. a. True b. False

True

Most manufacturing companies begin their global expansion by exporting. a. True b. False

True

One of the great growth industries of the past few decades has been the wireless phone industry. a. True b. False

True

Pressure for cost reductions encourages a firm to pursue a cost-leadership strategy, while pressure for local responsiveness encourages a firm to pursue differentiation. a. True b. False

True

Small-scale entry into foreign markets can be advantageous because it allows a company to learn about a foreign market while simultaneously limiting the company's exposure to that market. a. True b. False

True

Small-scale entry into foreign markets may make it more difficult for the small-scale entrant to build market share and capture first-mover advantages. a. True b. False

True

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. a. True b. False

True

Technological paradigm shifts occur when new technologies come along that revolutionize the structure of the industry, dramatically alter the nature of competition, and require companies to adopt new strategies to survive. a. True b. False

True

The globalization of production has been increasing as companies take advantage of lower barriers to international trade and location economies. a. True b. False

True

The layout of the keys on a computer keyboard is an example of a technical standard. a. True b. False

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. a. True b. False

True

When a company licenses its technology it can quickly lose control over it. a. True b. False

True

When two or more companies are competing with each other to get their technology adopted as a standard in an industry, and when network effects and positive feedback loops are important, the company that wins the format war will be the one whose strategy best exploits positive feedback loops. a. True b. False

True

arginal costs in high-technology industries tend to stay very low as production rises. a. True b. False

True

t can be argued that Microsoft's near monopoly of PC operating systems helped raise the level of industry profitability. a. True b. False

True

Which of the following is not intellectual property? a. A song written down as sheet music b. A Tom Clancy novel c. A computer software package d. A patented invention e. A new organizational structure

a new organizational structure

Which of the following is not a disadvantage to being a first mover? a. Significant pioneering costs b. Tendency to make mistakes c. Risk of building the wrong resources and capabilities d. Accumulation of market knowledge e. Possibility of investing in inferior or obsolete technology

accumulation of market knowledge

In high-technology industries, the underlying scientific knowledge companies use is a. increasing slowly. b. advancing rapidly. c. steadily decreasing. d. tripling every quarter. e. becoming stagnant.

advancing rapidly

Which of the following is not an attribute of a national or country-specific environment that has an impact on global competitiveness of companies located in that nation? a. Factory production endowments b. Local demand conditions c. Related and supporting industries d. Strategy, structure, and rivalry of firms within the nation e. Advertising expense

advertising expense

Firms should choose likely countries for an international expansion effort based on all of the following except the a. size of the market. b. existing wealth of consumers in that market. c. likely future wealth of consumers in that market. d. political stability of that market. e. age of the country.

age of the country

Aggressive marketing to jump-start demand for a product often involves a. substantial upfront marketing. b. point-of-sale promotion techniques. c. low introductory prices. d. use of free sampling. e. all of these choices.

all of these choices

Companies that pursue a transnational strategy are trying to develop a. a business model that achieves low costs. b. a differentiation strategy across geographical markets. c. a flow of skills between different subsidiaries in the global network. d. all of these choices. e. none of these choices.

all of these choices

Global economies of scale can be realized by a. expansion of overseas sales. b. better utilization of production facilities. c. boosting bargaining power with suppliers. d. increasing cost savings through learning effects. e. all of these choices.

all of these choices

What are the risks associated with licensing as a means of entering overseas markets? a. Licensing limits a company's ability to coordinate strategic moves across countries. b. A company may lose control of its technology. c. A company may lose control over its manufacturing, marketing, and strategic functions. d. All of these choices. e. None of these choices.

all of these choices

When entering an overseas market, which of the following factors should be considered? a. Size of the market b. Purchasing power c. Consumer demand for the company's product d. Economic risks e. All of these choices

all of these choices

Which of the following are major sources of first-mover advantages? a. An opportunity to exploit network effects b. The ability to establish significant brand loyalty c. The ability to ramp up sales volume before rivals can d. The ability to accumulate valuable knowledge of consumer needs e. All of these choices

all of these choices

Which of the following companies increased company growth rates by developing products at home and then expanding sales of these products in international markets? a. Procter & Gamble b. Ford c. Toyota d. All of these choices e. None of these choices

all of these choices

Which of the following has been thought of as a high-technology industry? a. Computers b. Telecommunications c. Consumer electronics d. Pharmaceuticals e. All of these choices

all of these choices

Which of the following is an example of a technical standard? a. Typewriter keyboard b. Dimensions of containers used to ship goods on trucks, railcars, and ships c. The Universal Serial Bus (USB) d. Communication between a PC and the Internet via a modem (TCP/ IP) e. All of these choices

all of these choices

Killer applications are applications or uses of a new technology or product that a. are so compelling they persuade customers to adopt or use the new technology in droves. b. drive consumers to the products or technology of another company. c. repulse new customers. d. kill demand for the product or technology. e. backfire on the company producing them.

are so compelling they persuade customers to adopt or use the new technology in droves.

Recently, the U.S. Food and Drug Administration began to require more descriptive labeling of food products. This is an example of standards that developed a. in the public domain. b. with a dominant design. c. through industry cooperation. d. by government mandate. e. through market demand

by government mandate

Global expansion a. is feasible only for large companies. b. can enable companies to increase their profitability and grow their profits more rapidly. c. allows domestic companies in the mature stage of the industry life cycle to maintain profits but not to increase them. d. requires locating facilities in foreign countries. e. makes sense for manufacturing firms but not for service firms.

can enable companies to increase their profitability and grow their profits more rapidly

Technological disruption a. typically happens slowly. b. is usually begun by the industry leaders. c. affects mostly small niche markets. d. causes firms to adopt a new business model. e. is a problem primarily in embryonic industries.

causes firms to adopt a new business model

Cost reduction pressures can be particularly intense in industries producing a. commodity-type products. b. highly differential products. c. goods that do not compete on the basis of price. d. goods servicing narrowly defined markets. e. highly advertised goods.

commodity type products

The ability to realize cost economies from global volume is greatest in the case of a. products that need to be customized to local requirements. b. commodity-type products that serve universal needs. c. low-weight, high-value products that can be differentiated by global companies. d. products that can be economically manufactured in small batches. e. companies competing in industries where they face a large number of multinational competitors.

commodity- type products that serve universal needs

The Achilles heel of international strategy is that a. market demand inevitably dries up. b. costs cannot be sufficiently controlled over long periods of time. c. competitors inevitably emerge. d. prices eventually tumble drastically. e. all of these choices.

competitors inevitably emerge

A localization strategy is most appropriate when a. there are relatively few differences from one location to another. b. consumer tastes and preferences are universally similar. c. consumer tastes and preferences differ substantially across nations. d. there is no need to customize products. e. local demand and national demand are equal.

consumer tastes and preferences substantially across nations

What advice would you give to a firm that wants to exploit network effects? a. Price your products high in the early stages of the market's development. b. Be a first mover and thus establish the technical standard. c. Create incentives for other firms to develop complementary products. d. Develop more killer applications than do competitors. e. Ask customers to bear the switching costs.

create incentives for other firms to develop complementary products

If a first mover has complementary assets, barriers to imitation are high, and capable competitors are few, the first mover should a. license the innovation to others. b. develop and market the innovation jointly with other companies through a strategic alliance or joint venture. c. develop and market the innovation itself. d. sell the technology outright to another firm. e. wait until competitors develop an alternative product

develop and market the innovation itself

Strong pressures for local responsiveness emerge when customer tastes and preferences a. differ significantly between countries. b. differ slightly between countries. c. are universally alike. d. are cyclical in nature. e. none of these choices.

differ significantly between countries

Which of the following factors increases pressures for local responsiveness? a. Powerful buyers b. Persistent excess capacity c. Low-cost competitors d. Differences in customer tastes and preferences e. Trade barriers

differences in customer tastes and preferences

Which of the following actions will not help protect intellectual property rights? a. Suing copyright violators in court b. Threatening to sue potential violators c. Digitalizing creative output d. Encrypting creative output e. Enforcing patent and copyright laws

digitalizing creative output

Which of the following is not a basic strategy for a first mover? a. Develop and market the innovation itself b. Develop and market the innovation jointly with other companies through a strategic alliance or joint venture c. License the innovation to others d. Discourage development of complementary assets e. All of these choices

discourage development of complementary assets

Which of the following will not help an established company in addressing the potential challenge of a disruptive technology? a. Access to knowledge about how disruptive technologies can revolutionize markets b. Investing in newly emerging technologies that may ultimately become disruptive technologies c. Anticipating and planning for how disruptive technology will change business d. Distinctive competencies in the current business model e. Understanding that a disruptive technology will require a radically different value chain with a different cost structure

distinctive competencies in the current business model

When an industry's products rely on a common set of features, these features are called a a. dominant design. b. format war. c. first mover. d. public domain. e. high-tech industry.

dominant design

If a first mover does not have complementary assets, barriers to imitation are high, and there are several capable competitors, the first mover should a. license the innovation to others. b. enter into a joint venture to protect the product. c. produce the product itself. d. sell the technology outright to another firm. e. wait until competitors develop an alternative product

enter into a joint venture to protect the product

Factors of production include all but which of the following? a. Land b. Labor c. Raw materials d. Ethnic diversity e. Managerial sophistication

ethnic diversity

Which of the following is not a true statement? a. First movers are the first to recover the costs of a new technology. b. First movers have higher pioneering costs than do later entrants. c. Later entrants can avoid the mistakes of first movers. d. Later entrants have lower pioneering costs than do first movers. e. First movers are more likely to make mistakes than are late

first movers are the first to recover the costs of a new technology

For a hotel company whose competitive advantage is based on high brand-name recognition, which of the following ways of serving an overseas market makes the most sense? a. Franchising b. Licensing c. Exporting d. Entering into a joint venture with a foreign company e. Setting up a wholly owned subsidiary

franchising

When standards are part of the public domain, they can be used a. only by companies in a particular industry. b. only by federal contractors. c. by paying a fee to the Federal Communications Commission (FCC). d. freely by any company. e. once without payment of a fee.

freely by any company

Dell is expanding its market share in European countries because its direct-sales model is more effective than the business model used by its European rivals. Which of the following benefits of global expansion is Dell experiencing, relative to its competitors? a. Lower costs for labor and raw materials b. Further exploitation of distinctive competencies c. Decreased political and economic risk d. Better realization of location economies e. More incentive for local subsidiaries to develop competencies

further exploitation of distinctive competencies

lear Vision's decision to own a manufacturing facility overseas was not influenced by which of the following factors? a. Low labor costs b. Availability of a skilled work force c. Geographical proximity to India d. Tax breaks given by the Hong Kong government e. Ability to find a Chinese partner

geographical proximity to India

A company with a business-level strategy of cost leadership should pursue which of the following global expansion strategies? a. Localization b. Simple c. International d. Transnational e. Global standardization

global standardization

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 a. spreading fixed costs over its global sales volume. b. utilizing its production facilities more intensely. c. increased bargaining power with its suppliers. d. learning effects associated with higher volume. e. improved responsiveness.

improved responsiveness

Differences in tastes and preferences a. increase pressures for cost reductions. b. reduce profit potential. c. increase pressures for local responsiveness. d. reduce pressures from the host government. e. prevent a company from pursuing a licensing strategy.

increase pressures for local responsiveness

Host government demands generally a. increase pressures for local responsiveness. b. increase pressures for cost reductions. c. discourage foreign companies from operating in the home country. d. impede a company's ability to minimize its transaction costs. e. impede a company's ability to differentiate its product offering across national borders.

increase pressures for local responsiveness

A telecommunications firm develops new wireless cellular phones, a technology in which foreign competition is low and the need for local responsiveness is high. What is the most appropriate short-term strategy for this firm? a. Global standardization b. International c. Localization d. Transnational e. Joint venture

international

ttaining a credible commitment from a potential partner a. is a step in partner selection. b. requires the ability to share skills with partners. c. requires the ability to learn from alliance partners. d. is a way to minimize opportunism. e. requires the ability to share skills with and learn from alliance partners.

is a way to minimize opportunism

Disadvantages of a global strategy include a. lack of local responsiveness. b. inability to engage in global strategic coordination. c. failure to exploit experience curve effects. d. lack of control over quality. e. inability to realize location economies.

lack of local responsiveness

When automobiles first became available to the public, it was difficult for buyers to find products such as tires, gasoline, and light bulbs for their cars. Early automobile owners a. faced a first-mover disadvantage. b. lacked complementary products. c. were locked out of the market. d. lost the format war. e. were too innovative.

lacked complementary products

When a company increases its growth rate by taking goods or services developed at home and selling them internationally, it is a. leveraging its existing products. b. taking the path of least resistance. c. engaging in product positioning. d. realizing cost economies from global expansion. e. realizing location economies.

leveraging its existing products

If a first mover does not have complementary assets, barriers to imitation are low, and there are many capable competitors, the first mover should a. license the innovation to others. b. enter into a joint venture to protect the product. c. produce the product itself. d. sell the technology outright to another firm. e. wait until competitors develop an alternative product.

license the innovation to others

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 a. economies of scale. b. economies of scope. c. the transnational strategy. d. location economies. e. its localization strategy.

location economies

Which of the following is not an objective of a transnational company? a. Local responsiveness b. Realization of experience-based economies c. Low cross-national integration d. Global learning e. Realization of location economies

low cross national integration

Which of the following is not one of the benefits that first movers enjoy? a. Earlier benefits from economies of scale b. Ability to create customer switching costs c. First to obtain brand loyalty d. Ability to accumulate knowledge about the market e. Lower pioneering costs

lower pioneering costs

The globalization of production has allowed firms to a. increase their market share. b. lower their cost structure. c. respond to individual market segments. d. avoid international competition. e. all of these choices.

lower their cost structure

The various strategies that companies should adopt to win format wars revolve around a. getting the federal government to intercede. b. making network effects work in their favor and against their competitors. c. effective use of advertising. d. driving competitors out of business. e. joint ventures.

making network effects work in their factor and against their competitors

Often, the industry standard is selected competitively by a. market supply. b. market demand. c. government contracts. d. all of these choices. e. none of these choices.

market demand

Managers of a multinational enterprise must recognize that skills a. need to be transferred from headquarters to the firm's overseas operations. b. may arise from anywhere within the firm's global network. c. developed overseas usually do not rise to the level of domestic skills. d. should not deviate from their domestic level. e. must be tightly controlled to assume global similarity.

may arise from anywhere within the firms global network

When it comes to developing a business model and strategies that will lead to competitive advantage and superior profitability, high-technology companies a. often face similar situations. b. often face different situations. c. are extremely unique in the situations they face. d. cannot be compared in terms of the situations they face. e. commonly face overwhelming situations.

often face similar situations

In 1952, the Iranian oil industry was nationalized so that foreign ownership of oil-producing land and equipment was made illegal and the assets were confiscated. Which of the following disadvantages of global expansion is shown in this example? a. Political risk b. Increased tariffs c. Lower costs for labor and raw materials d. Commodity products that command low profits e. Products that need to be customized to local requirements

political risk

Which of the following factors increases pressures for cost reductions? a. Differences in distribution channels b. Increasing national wealth c. Great transportation needs d. High switching costs e. Price as the main competitive weapon in a market

price as the main competitive weapon in a market

Which of the following strategies should a company not adopt if it wants to win a format war? a. License their technology to competitors. b. Develop complementary products. c. Enter into a joint venture to ensure compatibility. d. Aggressively market to jump-start demand. e. Price the product high to recover steep upfront costs.

price the product high to recover steep upfront costs

Which of the following is not a risk of exporting? a. Tariff barriers b. Transportation costs c. Location diseconomies d. Prime interest rates e. Delegation of marketing activities to a local agent

prime interest rates

Licensing a format to other enterprises is often used by a company so that the company can a. earn substantial license fees without having to manufacture products. b. create a monopoly. c. produce products that can be based on the licensed format. d. all of these choices. e. none of these choices.

produce products that can be based on the licensed format

Marginal cost refers to the cost of a. switching to a new technology. b. buying stock with loaned funds. c. producing one extra unit of product. d. realizing a profit. e. motivating other firms to produce complements

producing one extra unit of product

When toymaker Mattel sells Barbie dolls in the Middle East, it changes the doll's shape to one that is a more accurate portrayal of a female body. Mattel does this to a. create a commodity-type product. b. transfer technological know-how. c. increase product standardization. d. realize experience curve effects. e. respond to differences in local tastes

respond to differences in local tastes

A company that enters a foreign market by entering into a licensing agreement with a local company a. can realize location economies. b. can engage in global strategic coordination. c. can realize experience-curve effects. d. risks losing control over its technology to the venture partner. e. can engage in global strategic coordination and realize experience-curve effects

risks losing control over its technology to venture partner

Which entry mode gives a multinational the tightest control over foreign operations? a. Exporting from the home country and letting a foreign agent organize local marketing b. Licensing c. Franchising d. Entering into a joint venture with a foreign company to set up overseas operations e. Setting up a wholly owned subsidiary

setting up a wholly owned subsidiary

A nation's companies gain competitive advantage if their domestic customers are a. nondemanding purchasers. b. able to obtain products or services in other countries. c. sophisticated and demanding. d. willing to spend money on novelties. e. not willing to accept low-priced products

sophisticated and demanding

Technical standards in high-technology industries are a. specifications developed by each producing company for its own products. b. specifications that all producers adhere to when making a product or product component. c. product specifications imposed by the federal government. d. expressions of product features desired by consumers. e. general guidelines proposed by industry leaders.

specifications that all producers adhere to when making a product or product component.

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? a. Upward at a 45-degree angle b. U-shape c. Straight and vertical d. J-shape e. Straight and flat

straight and flat

Microsoft released its latest operating system, Windows Vista, and intended it to replace earlier versions of Windows. Buyers of Vista had to learn how to use the features of the new software; thus, buyers were facing a. a first-mover disadvantage. b. outmoded technology. c. a positive feedback loop. d. a format war. e. switching costs.

switching costs

In the 1870s, Christopher Sholes invented the layout of keys on a typewriter keyboard, sometimes called the QWERTY layout. This invention is a(n) a. technical standard. b. first-mover advantage. c. complementary product. d. outmoded technology. e. high-tech industry.

technical standard

Cell phone technology is replacing traditional wired phone technology. This is an example of a(n) a. first-mover advantage. b. technological paradigm shift. c. format war. d. complementary product. e. embryonic industry.

technological paradigm shift

Consumers will bear the costs of switching technologies when a. the benefits of adopting the new technology outweigh the costs of switching. b. switching costs are substantial. c. switching costs are reimbursed by makers of a product. d. all of these choices. e. none of these choices

the benefits of adopting the new technology out weigh the costs of switching

Which of the following is not a necessity for leveraging the skills of global subsidiaries? a. The firm must have incentives for local managers to share knowledge and ideas. b. The firm's managers must be aware that competencies can develop anywhere. c. The firm must be pursuing a strategy of differentiation. d. The firm's managers must help to transfer competencies around the company. e. The firm must offer incentives that encourage employees to take necessary risks.

the firm must be pursuing a strategy of differentiation

Intellectual property refers to a. the product of a manufacturing activity. b. a narrow range of intellectual pursuits. c. the product of any intellectual and creative effort. d. any idea produced for profit. e. nonfinancial ideas and concepts.

the product of any intellectual and creative effort

Cellular phone service providers often sell the phone itself at very low prices and then charge a relatively high fee for usage. This illustrates a. first-mover strategy. b. competitive cooperation. c. the razor-and-blade strategy. d. competitive positioning. e. format licensing.

the razor and blade strategy

When a standard exists in the public domain, a. the standard was created from outside the mainstream of the industry. b. consumers selectively chose that standard. c. the government chose the standard that would best serve the public's interests. d. the standard may be used by any company. e. the standard was developed in an open and cooperative fashion.

the standard may be used by any company

Makers of complementary products will begin large-scale production when a. the first mover introduces a new product. b. the dominant design is changing. c. consumer demand reaches the plateau of maturity. d. the technical standard is firmly established. e. industry participants begin to purchase from suppliers.

the technical standard is firmly established

An industry is considered to be high technology, or high tech, when a. its products are electronic or electrical. b. the firms in the industry own intellectual property. c. its products are computers or are related to computers. d. firms are innovative. e. the underlying scientific knowledge that companies in the industry use is advancing rapidly.

the underlying scientific knowledge that companies in the industry use is advancing rapidly

Foreign subsidiaries play a major role in shaping the future direction of a company pursuing a(n) a. transnational strategy. b. international strategy. c. localization strategy. d. joint venture. e. global standardization strategy

transactional strategy

Factor endowments-the cost and quality of factors of production-are a prime determinant of the competitive advantage that certain countries have in certain industries. a. True b. False

true

Digitalization refers to a. the increasing use of the Internet in corporations. b. a firm's database of client information. c. manufacturing with the aid of robotics. d. turning intellectual property into digital form. e. the use of encryption software to protect intellectual property.

turning intellectual property into digital form

Which of the following entry modes allow(s) a company to engage in global strategic coordination? a. Exporting b. Licensing c. Joint ventures d. Wholly owned subsidiaries e. Joint ventures and wholly owned subsidiaries

wholly owned subsidiaries

An adequate supply of complements to a product helps ensure that consumers a. will buy the company's product. b. will experiment with the products of other companies. c. will buy the complements to use with the products of other companies. d. all of these choices. e. none of these choice

will buy the company's product

Matsushita licensed its VHS technology to rivals, while Sony kept its Beta technology proprietary. This action allowed Matsushita to a. win the format war. b. enter into an alliance with Sony. c. earn higher profits than Sony. d. enjoy a first-mover advantage. e. bear switching costs better than Sony.

win the format war