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