Network Effects Quiz Answers

Question 1 of 15 1.0 Points Network Effects when a product or service becomes more valuable as more people use it. Answer Key:Network Effect|Network Effects Part 2 of 2 - 14.0 Points Question 2 of 15 1.0 Points The resource-based view of competitive advantage states that for a firm to maintain sustainable competitive advantage it must control a set of exploitable resources that have four critical characteristics. What are these characteristics?  A.inventory turns, high margins, long account payable periods, brand building relationships  B.operational effectiveness, strategic positioning, scale, distribution channels  C.rareness, value, imperfect imitability, non substitutability  D.a web site, an app, cloud-based systems, a savvy technology staff Answer Key:C Question 3 of 15 1.0 Points A strong brand can be an exceptionally powerful resource for competitive advantage by lowering ________, proxying _____ and inspiring _____.  A.price; strategy; innovation  B.switching costs; quantity; performance  C.expenses; marketing; respect  D.search costs; quality; trust  E.customer concern; investment; profits Answer Key:D Question 4 of 15 1.0 Points Which of the following is a source of bargaining power of buyers?  A.Greater choice of products  B.High switching costs  C.Loyalty programs  D.Network effects  E.Unique and highly differentiated products Answer Key:A Question 5 of 15 1.0 Points Netscape, which once controlled more than 80 percent of the market share in Web browsers, lost its dominant position when customers migrated to Internet Explorer, Microsoft’s Web browser. Internet Explorer was easy to install and had no significant differences in terms of usability. This example serves to illustrate that:  A.fast-following smaller firms are always ready with newer and possibly superior products.  B.customers of technology companies are becoming increasingly savvy and more demanding.  C.the open source nature of technology ensures that no firm can expect to monopolize a market.  D.firms need to employ increasingly stringent intellectual property norms to guard against infringements from smaller, competitive rivals.  E.firms with low switching costs can sometimes be rapidly overtaken by strong rivals with additional competitive advantages. Answer Key:E Question 6 of 15 1.0 Points _____ exist when consumers incur an expense to move from one product or service to another.  A.Network effects  B.Switching costs  C.Economies of scale  D.Competitive advantages  E.Profit margins Answer Key:B Question 7 of 15 1.0 Points Leveraging consumers to promote a product or service is known as _____.  A.straddling  B.affiliating  C.long tailing  D.crowdsourcing  E.viral marketing Answer Key:E Question 8 of 15 1.0 Points Startup firms can struggle to gain lower prices from rivals, but FreshDirect seems to have found several ways to gain lower supplier prices. FreshDirect buys direct from suppliers, eliminating any markup from a middleman. In addition to this, the firm employs other methods to get lower prices from suppliers. Which of the following is not a way FreshDirect helps suppliers in exchange for supplier agreement to offer it better pricing terms?  A.FreshDirect carries a greater selection of supplier products  B.FreshDirect will cobrand products from suppliers  C.FreshDirect pays suppliers faster than rivals  D.FreshDirect shares warehouse space with farmers and livestock producers  E.FreshDirect shares data on customer insights with suppliers Answer Key:D Question 9 of 15 1.0 Points Businesses benefit from economies of scale when the cost of an investment can be:  A.spread across increasing units of production.  B.used in serving a niche and loyal customer base.  C.used to build a brand image for products through advertising.  D.leveraged to recruit consumers to promote a product or service.  E.diverted to implementing technology upgrades in the business model. Answer Key:A Question 10 of 15 1.0 Points The set of activities through which a product or service is created and delivered to customers is known as a(n) _____.  A.marketing plan  B.value chain  C.inventory turnover  D.strategic position  E.pure play Answer Key:B Question 11 of 15 1.0 Points The paths through which products or services get to customers are known as _____.  A.information pathways  B.vertical markets  C.distribution channels  D.proxy networks  E.horizontal markets Answer Key:C Question 12 of 15 1.0 Points The patent system is often considered to be unfairly stacked against start-ups because:  A.bigger multinational firms enjoy patent protection in all countries as opposed to startups, which are domestic firms that do not get such protection for the most part.  B.the intellectual property laws are not adequate to protect the interests of smaller firms from infringements.  C.the patent system grants patents for innovations on a differential basis, with bigger firms getting precedence over start-ups.  D.high litigation costs coupled with a few months of litigation can sink an early stage firm.  E.patents are granted by the patent system on an ad hoc basis wherein firms that have been in business longer get patent protection for longer periods of time. Answer Key:D Question 13 of 15 1.0 Points Which of the following represents one of the primary components of the value chain?  A.Outbound logistics  B.Firm infrastructure  C.Human resource management  D.Research and development  E.Procurement Answer Key:A Question 14 of 15 1.0 Points How did Apple trump Google to become the dominant mapping platform on iOS?  A.Apple’s control of iOS gave it control of the distribution channel to reach its users, kicking Google out as the default mapping app and capturing the majority of user engagement.  B.Apple sued Google for copyright infringement related to the look and feel of Apple Maps.  C.Apple sued Google for privacy violations related to the collection of map data.  D.Apple hasn’t trumped Google Maps. Google’s Map app is used by the majority of iOS customers, whereas most users ignore Apple Maps. Answer Key:A Question 15 of 15 1.0 Points A firm’s financial performance that consistently outperforms its industry’s peers is known as _____.  A.comparative advantage  B.absolute advantage  C.sustainable competitive advantage  D.first mover advantage  E.operational efficiency advantage Answer Key:C