MSM 6650

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

As workers repeatedly engage in an activity, they become more efficient, driving down costs.

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.

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 benefiting from

an experience-curve effect based on process innovation.

Diseconomies of scale often appear when a firm ______.

becomes too large and complex to manage efficiently

A firm uses the ______ business model when it sells a set of products that have different levels of demand for a price less than their total combined prices.

bundling

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

differentiation and cost-leadership

The two factors upon which the success of strategy of either cost leadership or differentiation is built are

external opportunities in the market the firm's internal strengths

True or false: Formulating a business strategy is a relatively easy task because only a few strategic options are available.

false

When a user values two products equally, they are negatively correlated.

false

The cube-square rule makes it _______ for smaller stores to compete with larger retailers.

harder

What drives the learning curve effect?

increases in cumulative output within the existing technology

In the relationship between per-unit cost and output, the minimum efficient scale ______.

is where the per-unit cost is lowest

Tesla has an 80% learning curve, which means that ______.

per-unit cost drops 20% whenever output doubles

As a consequence of the rapid development of business models, ______ may breach existing rules of commerce.

producers

In the learning curve, the ______ the learning curve, the more learning has taken place.

steeper

One way that a company can try to avoid problems resulting from diseconomies of scale is to ______.

structure the company into smaller units

The business model used by telecommunication companies when they provide a basic cell phone at no charge when the customer signs a two-year contract is a combination of which of the following types of business models?

subscription freemium

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

the ability to charge a premium price less intense competition from imitators

In terms of productivity, which of the following is true of learning curves?

they go down

A graphical depiction of a firm's relative performance across its industry's factors of competition is known as a

value curve

Which of the following makes it more likely that producers will breach existing rules of commerce when responding to rapid developments in business models?

when the business models are disruptive

Which of the following are questions that managers must answer when pursuing value innovation?

which product factors to eliminate which product factors to reduce below the industry standard which new product factors to create which product factors to raise above the industry standard