MGMT 449 Final Heejin Woo || Already Passed.

MGMT 449 Final Heejin Woo || Already Passed.
Five Forces Framework correct answers Threat of new entrants

Intensity of rivalry

Bargaining power of suppliers

Bargaining power of buyers

Threat of substitutes

Attractiveness?

Threat of new entrants correct answers • Economies of scale are (significant / insignificant). =
High / Low
• Brand identity is (significant / insignificant). = High / Low
• Capital requirements are (high / low). = High / Low
• Learning curve effect is (high / low). = High / Low

Intensity of rivalry correct answers • Market share is (concentrated / not concentrated). = High /
Low
• Industry is (growing / shrinking). = High / Low
• Product differentiation becomes (easy / difficult). = High / Low

Bargaining power of suppiers correct answers • Switching costs of suppliers (e.g. Intel changes
its supplier) are (high / low). = High / Low
• Supplier concentration is (high / low). = High / Low
• Threat of forward integration relative to threat of backward integration by firms is (high / low)
= High / Low

Bargaining power of buyers correct answers • Buyer concentration is (high / low). = High / Low
• Buyers' option to choose is (diverse / limited). = High / Low
• Impact of firm product on quality / performance of buyers' product is (high / low). = High /
Low

Threat of substitutes correct answers • Availability of substitute is (high / low). = High / Low

Market Concentration correct answers measures the degree of competition that exists within a
market by calculating the market share of the largest few firms in the industry

Market Concentration Calculation correct answers (x_1 )^2+(x_2 )^2+(x_3 )^2+(x_4)^2
=Market Concentration

HHI ranges from 0 to 1. Monopoly =1

, More Concentrated correct answers Less Competitive
Closer to 1

More Competitive correct answers Less Concentrated
Closer to 0

Blue Ocean Strategy: Definition correct answers Blue ocean strategy is about doing business
where there is no competition.

Blue Ocean Strategy: Mechanisms correct answers Create uncontested market place.
Make the competition irrelevant.
Create and capture new demand.
Break the value/cost trade-off.
Align the whole system of a company's activities in pursuit of differentiation and low cost.

First-mover advantage: Definition correct answers The ability of pioneering firms to earn
positive economic profits

First-mover advantage: Sources correct answers Technological leadership
Preemption of assets
Buyer switching costs
Reputation & brand awareness by consumers

Razor-blade strategy (freebie marketing): correct answers One item is sold at a low price (or
given away for free) in order to increase sales of a complementary good

Razor-blade strategy (freebie marketing): Examples correct answers Inkjet printers - ink
cartridges
Video game consoles - video game CDs
Kodak's camera - film

When is a razor-blade strategy challenged? correct answers When other companies can offer
supplies that work for our 'razor'.

How can the razor seller protect its business from free-riders? correct answers It can make their
razor compatible only with their own supplies

Resource-based view: Concept correct answers RBV (Resource-based view) views a company as
a collection of resources. Resources are the productive assets owned by the firm and capabilities
are what the firm can do.

Resource-based view: Mechanisms correct answers Individual resources do not confer
competitive advantage alone; they must work together to create organizational capabilities.
Resources are distributed heterogeneously across companies.
These productive resources cannot be transferred from company to company without cost (i.e.
resources are "sticky".)