CH 7 op management - review material PDF

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Chapter 7 - Strategy and Technology 28. Which of the following statements is true of technology in industries? b. Technology in industries is revolutionizing aspects of the product even in those not typically considered hightech. 29. _____ refers to a common set of features in a computer or other machines. e. Dominant design ANSWER: e 30. Consumers will bear the costs of switching technologies if: a. the benefits of adopting the new technology outweigh the costs of switching. 31. Technical standards in high-technology industries are: b. specifications that producers adhere to when making a product or a component. 32. With reference to high-technology industries, which of the following is an example of a technical standard? d. The layout of keys on a keyboard 33. When standards are part of the public domain, they can be used: d. freely by any company. 34. With reference to high-technology industries, which of the following statements is true about technical standards? a. They emerge because there are economic benefits associated with them. 35. With reference to technical standards, a dominant design refers to: c. A common set of features or design characteristics. 36. Which of the following statements is true about establishing technical standards? b. Technical standards are often set by cooperation among businesses, without government help. 37. Format wars, in the context of high-technology industries, refer to: a. battles to control the source of differentiation, and thus the value that the differentiation can create for the customer. 38. Network effects arise in an industry where: a. the size of the network of complementary products is a primary determinant of demand for an industry's product. 39. There is a set of fixed specifications for turbine blades for jet engines. The specifications include the material that needs to be used to manufacture the blades and also the specific dimensions that they need to have; the same specifications are used by all manufacturers. In this scenario, the specifications for jet blades can be referred to as: b. technical standards. Copyright Cengage Learning. Powered by Cognero.

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Chapter 7 - Strategy and Technology 40. Switching costs, in the context of technology industries, refer to the costs that: c. customers need to bear to abandon an established standard and adopt a new standard. 41. In order to work towards winning a format war, a company should: c. develop its own killer applications. 42. Libra Electronics has invented a new technology to make laptops that are extremely lightweight and unbreakable. The company is advertising aggressively and wishes to create demand for its new range of laptops. To attract customers, the company has priced the laptops attractively. However, in order to make profits, the company has priced the batteries required for the laptops extremely high. Which of the following is illustrated in this scenario? c. razor and blade strategy. 43. Venus Corp. a high-technology, gadget-making company has introduced a gaming console with attractive features. Even though the console is priced modestly and has better features than the existing ones, it has failed as many customers are apprehensive about buying it. In order to create demand, Venus Corp. should: c. ensure that there are adequate complementary products. 44. _____ are applications or uses of a new technology or product that are so compelling that customers adopt them in droves, curbing the demand for competing formats. a. Killer applications 45. What advice would you give to a firm that wants to exploit network effects? c. Create incentives for other firms to develop complementary products. 46. Which of the following strategies should a company NOT adopt if it wants to win a format war? e. Charging extremely high license fee for the technology 47. An adequate supply of complements to a product results in: a. more customers opting for the product. 48. Cooperating with competitors: a. reduces competition in the market. 49. The various strategies that companies should adopt to win format wars revolve around: b. making network effects work in their favor and against their competitors. 50. Mathematica 1.0 was one of the most distinctive applications for the short-lived NeXT Computer. It still sets the standard for symbolic math and visualization on Windows, Mac, Linux, and Unix. Mathematica 1.0 can be described as a(n) _____ application. e. killer 51. Aggressive marketing in the context of format wars: Copyright Cengage Learning. Powered by Cognero.

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Chapter 7 - Strategy and Technology b. helps a company jump-start demand. 52. Cellular phone service providers often sell the phone itself at very low prices and then charge a relatively high fee for usage. This illustrates: c. The razor and blade strategy. 53. Marginal cost refers to the costs of: c. producing one extra unit of product. 54. Which of the following statements is true about marginal costs in high-technology industries? c. They include the costs of packaging and product distribution. 55. 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? e. Straight and flat 56. Which of the following is NOT true of high-technology industries? a. First movers have an advantage because their customers avoid switching costs. 57. Which of the following is an advantage of first movers? e. They have an opportunity to exploit network effects and positive feedback loops. 58. Which of the following is a disadvantage of first movers? d. They run the risk of building the wrong resources and capabilities. 59. Which of the following is NOT a basic strategy for a first mover? d. Discourage development of complementary assets 60. When a first mover does not have complementary assets, barriers to imitation are high, and there are several capable competitors, the first mover should: b. enter into a joint venture to protect the product. 61. An advantage of being a first mover is that: e. there is an opportunity to increase sales volume ahead of rivals. 62. Which of the following is true of first movers? d. The first mover that creates a revolutionary product is in a monopoly position. Copyright Cengage Learning. Powered by Cognero.

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Chapter 7 - Strategy and Technology 63. A technological paradigm shift is most likely to occur in which stage of the industry life cycle? d. Maturit y 64. Cell phone technology is replacing traditional wired phone technology. This is an example of a(n): b. technological paradigm shift. 65. Which of the following will NOT help an established company in addressing the potential challenge of a disruptive technology? d. Asking customers if they are interested in the new technology 66. Technological disruption: d. compels firms to adopt new business models. 67. Which of the following statements is true about new entrants in the context of a technological paradigm shift? c. New entrants do not need to worry about their established customer base. 68. In case of emergence of a disruptive technology, established companies should: c. acquire newly emerging companies that are pioneering potentially disruptive technologies. 69. Which of the following statements is true about technological paradigm shifts? c. They have the potential to threaten the survival of established industries.

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