Ch 4 Flashcards
Which of the following is threatened by industry evolution?
all types of competitive advantage
The adaptation of incumbents to industry disruption depends on which of the following?
the degree of incumbent control over complementary assets (biotech partnering with established pharma)
Why might high short term opportunity costs slow incumbent response to an industry disruption?
incumbents are focused too strongly on competing under current industry conditions
Firms improve their market positions over time through which of the following?
the innovation cycle
A dynamic capability is always
located in activities where key innovations occur
The performance of small firms in niche markets is threatened by
both the:
niche-specific value drivers are no longer effective against larger firms and
economies of scope of larger firms
Hypercompetition is the combination of
multipoint competition and an arms race
Which of the following determines the duration and severity of a shakeout?
expectations about future demand and the degree of sunk costs
Path dependence is mostly determined by
the firm’s history of innovations (Intel with the microprocessor)
Strategic pricing depends on which of the following assumptions?
both (A) customer switching costs are high enough to ensure a reasonable retention rate (B) scale based cost drivers are available and effective.
T/F - Industries spend about the same amount of time in the growth stage.
FALSE
T/F - Survival is generally determined more by a firm’s age than its size.
FALSE - LESS to age than to size.
T/F - A dominant design is the culmination of a series of innovations in a product’s components and architecture.
TRUE
(True or false?) Investing in projects based on the learning curve is more attractive in the mature phase of industry evolution.
FALSE
(True or false?) To counter experienced buyers, firms should invest in value drivers that raise customer search and transition costs.
TRUE
. (True or false?) Industries spend about the same amount of time in the shakeout stage.
FALSE
(True or false?) Technological substitution involves the introduction of a radically new technology that has a higher marginal rate of return on investment in R & D than the current technology in the industry.
TRUE
(True or false?) The product life cycle explains which firms will survive a shakeout and which will not.
TRUE - ‘these forces ultimately drive weaker firms from the market’
(True or false?) Value drivers vary in their effectiveness over the course of industry evolution.
TRUE
(True or false?) Over the industry life cycle, firms shift from process to product innovation.
FALSE
