Management 495 Midterm

When wireless service providers offer free or discounted mobile phones for subscriptions to their wireless voice and data service, the perceived value of the service offering increases. In this case, the value driver would be A. Availability of complements B. experience-curve effects C. learning-curve effects D. economies of scale

A. Availability of complements

Pure Carat is a company that sells 24-caratgold biscuits to companies that manufacture jewelry. Since the company operates in an industry where many other suppliers sell standardized products, it can most likely A. only achieve competitive parity B. Maintain its absolute advantage for long time C. Easily achieve a sustainable competitive advantage D. easily achieve a temporary competitive advantage

A. Only achieve competitive parity

Which of the following is a firm effect that has an impact on the competitive advantage of a firm? A. The value and the cost position of the firm relative to its competitors B. The # of companies operating in the industry in which the firm operates C. The intensity of rivalry among existing companies in the firms chosen industry D. the exit barriers within the industry in which the firm operates

A. The value and the cost position of the firm relative to its competitors

Which of the following MOST accurately describes a difference between incremental innovation and radical innovation? A. Incremental innovation draws on novel methods; radical innovation draws on proven methods B. Incremental innovation builds on an established knowledge base; radical innovation uses an entirely different knowledge base C. Incremental researched new materials; radical researches new processes D. Incremental targets new markets and technologies; radical innovation reinvents markets nd technologies

B. Incremental builds on established knowledge base; radical uses an entirely different knowledge base

Peerless Inc., a large conglomerate, wants to liquidate its business in certain industries to improve its overall profitability. Which of the following industries would Peerless Inc. find it most difficult to exit? A. the management consultancy industry in which the company's fixed costs are low B. the steel industry in which the company has obligations like severance pay toward employees C. the corporate training industry in which the company's commitments are mostly short-term D. the e-commerce industry where the company has no long-term contractual agreements with suppliers

B. The steel industry

When a differentiator charges a similar price as its competitors in its industry but offers more perceived value, it A. Lowers the economic value created B. Results in diseconomies of scale C. Gains market share from other firms D. Loses its competitive advantage

C. Gains market share from other firms

Three larger firms dominate the telecommunication industry of United Canava: AD Telecom Inc., Mystic Telecom Inc., and Total Talk Inc. Instead of cutting prices competitively, these firms have resorted to non-price sompetition through branding and product differentiation. Which of the following industry competitive structures are these companies most likely in? A. perfect competition B. Monopoly C. Oligopoly D. Monopolistic Competition

C. Oligopoly

Incumbent firms favor incremental innovation over radical innovation because.. A. Their business decisions are independent of the other parties in their innovation ecosystems B. Incremental innovations help firms sustain a permanent competitive advantage, whereas radical innovations only help gain a temporary advantage C. radical innovation will disturb the existing power distribution within the firms D. Incumbent firms do not have formal organizational structures and processes like the way new entrants do.

C. radical innovation will disturb the existing power distribution within the firms

Which of the following provides an example of how a firm's valuable resource can be imitated? A. To compete with Build Your Own's model of the Eiffel Tower, Best Replica came out with a model of a castle from a fantasy world B. To compete, Best Replica came out with a replica of the USS Enterprise aircraft carrier C. To compete, Best Replica came out with a model of a generic medieval cathedral D. To compete, Best Replica came out with a model of the Leaning Tower of Pisa.

D. Leaning Tower of Pisa

In the "What is Strategy?" article, how can your company gain and sustain a competitive advantage? A. None of the above B. When your company chooses to pursue different markets due to past successes C. When your competitors are able to find a unique competitive position D. When your competitors have to make trade offs to imitate your competitive position

D. When your competitors have to make trade offs