Theory of Strategic Management International Edition 10th Edition – Test Bank

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Theory of Strategic Management International Edition 10th Edition by Gareth Jones – Test Bank

Chapter 7—Strategy and Technology

TRUE/FALSE

1.Interestingly, technical standards create benefits primarily for those firms that do not adhere to them.

ANS:FPTS:1DIF:Easy

OBJ: 1 – Understand the tendency toward standardization in many high-technology markets

NAT: AACSB Technology | Information Technologies KEY: Knowledge

2.It can be argued that Microsoft’s near monopoly of PC operating systems helped raise the level of industry profitability.

ANS:TPTS:1DIF:Moderate

OBJ: 1 – Understand the tendency toward standardization in many high-technology markets

NAT: AACSB Technology | Information Technologies KEY: Knowledge

3.Battles to set and control technical standards in a market are referred to as product positioning.

ANS:FPTS:1DIF:Moderate

OBJ: 1 – Understand the tendency toward standardization in many high-technology markets

NAT: AACSB Analytic | Creation of Value KEY: Knowledge

4.The layout of the keys on a computer keyboard is an example of a technical standard.

ANS:TPTS:1DIF:Easy

OBJ: 1 –  Understand the tendency toward standardization in many high-technology markets

NAT: AACSB Reflective Thinking | Information Technologies KEY: Knowledge

5.A set of related technical standards that specify the common set of features or design characteristics of a product is called a dominant design.

ANS:TPTS:1DIF:Easy

OBJ: 1 – Understand the tendency toward standardization in many high-technology markets

NAT: AACSB Analytic | Creation of Value KEY: Knowledge

6.Fortunately, technical standards always exist in the public domain so that any company can use them.

ANS:FPTS:1DIF:Moderate

OBJ: 1 – Understand the tendency toward standardization in many high-technology markets

NAT: AACSB Technology | Information Technologies KEY: Comprehension

7.Ownership of an industry standard that is protected from imitation by patents and copyrights is a weak organizational resource.

ANS:FPTS:1DIF:Easy

OBJ: 1 – Understand the tendency toward standardization in many high-technology markets

NAT:AACSB Analytic | StrategyKEY:Comprehension

8.By exploiting a positive feedback loop, Dolby Laboratories,  became the standard for sound quality.

ANS:TPTS:1DIF:Moderate

OBJ: 2 –  Describe the strategies that firms can use to establish their technology as the standard in a marketNAT:AACSB Technology | Information Technologies

KEY: Knowledge

9.Digital music downloads have high marginal costs.

ANS:FPTS:1DIF:Easy

OBJ: 2 –  Describe the strategies that firms can use to establish their technology as the standard in a marketNAT:AACSB Technology | Information Technologies

KEY: Knowledge

10.When two or more companies are competing with each other to get their technology adopted as a standard in an industry, and when network effects and positive feedback loops are important, the company that wins the format war will be the one whose strategy best exploits positive feedback loops.

ANS:TPTS:1DIF:Moderate

OBJ:2 – Describe the strategies that firms can use to establish their technology as the standard in a marketNAT:AACSB Technology | Information Technologies

KEY: Knowledge

11.Companies that are locked out of a market are those in which consumers are unwilling to bear the switching costs required for them to abandon the established standard and adopt the new one.

ANS:TPTS:1DIF:Moderate

OBJ:2 – Describe the strategies that firms can use to establish their technology as the standard in a marketNAT:AACSB Technology | Information Technologies

KEY: Knowledge

12.Switching costs are the costs that consumers must bear to switch from a product based on one technological standard to a product based on another.

ANS:TPTS:1DIF:Easy

OBJ:2 – Describe the strategies that firms can use to establish their technology as the standard in a marketNAT:AACSB Technology | Information Technologies

KEY: Knowledge

13.A possible strategy for winning a format war is for a company to make sure that, in addition to the product itself, there is an adequate supply of complements.

ANS:TPTS:1DIF:Moderate

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