MGT 247 EXAM 2
Consider the matrix of generic business strategies. What are the two dimensions of the matrix?
Competitive scope and type of advantage
Firm A has a WTP advantage over Firm B. Both firms have the same cost. When analyzing their financial and operating performance, you find that Firm A and Firm B have the same profit per unit. Which of the following is likely to be true regarding their market shares? Assume there are no other competitors.
Firm A's market share is greater than 50%
The first and the last steps of the innovation process are
Ideas and imitation
Laboratory tests show that the Gillette Fusion razor actually does give a smoother shave, with less skin irritation. Consumers pay a substantial price premium for the Fusion. This competitive outcome illustrates the successful use of:
a differentiation strategy
which of the following is a feature of the growth stage of the industry life cycle?
consumer demand increases
In a focused cost-leadership strategy, a firm:
delivers low-cost products and services to a specific, narrow part of the market
A company that adopts a differentiation strategy is less likely to invest in advertising and research than a company that follows a cost leadership strategy.
false
A firm with a focused differentiation strategy focuses on increasing the willingness to pay for all customers in the market.
false
Company A has a lower cost than Company B. Hence, it necessarily follows that company A has a competitive advantage over company B.
false
Economic value (created when a firm sells a product) is the sum of what the customer is willing to pay, and the cost of producing the product.
false
Economies of scale are the decrease in total costs as the output of the firm increases.
false
The learning curve is the decrease in unit costs as the size of the firm increases.
false
The shakeout phase of the industry lifecycle is characterized by decreasing demand.
false
There is no firm exit in the growth stage of the industry life cycle.
false
which of the following is most likely to be true for an industry in the maturity stage
it has few large firms
key difference between platform and pipeline buisness model?
network effects are much more important in platform models than in pipeline models
if the market size is increasing but the number of firms in an industry is decreasing, which of the following stages is the industry likely in?
shakeout
which of the following is usually true for an industry in the introduction stage
the industry has not gained widespread acceptance
Keeping the willingness to pay (V) and cost (C) constant, increasing price (P) decreases consumer surplus.
true
