WPC 470 ASU Final Exam Questions
with Complete Answers
The goal-directed actions managers take in their quest for competitive advantage when
competing in a single product market - Answer-Business-level strategy
Business level strategy that successfully combines differentiation and cost-leadership
activities using value innovation to reconcile the inherent tradeoffs - Answer-Blue ocean
strategy
Generic business strategy that seeks to create the same or similar value for customers
at a lower cost - Answer-Cost-leadership strategy
Generic business strategy that seeks to create higher value for customers than the
value that competitors create, while containing costs - Answer-Differentiation strategy
Increases in cost per unit when output increases - Answer-Diseconomies of scale
Decreases in cost per unit as output increases - Answer-Economies of scale
Savings that come from producing two or more outputs at less cost than producing each
output individually, despite using the same resources and technology - Answer-
Economies of scope
Output range needed to bring down the cost per unit as much as possible, allowing a
firm to stake out the lowest-cost position that is achievable through economies of scale -
Answer-Minimum efficient scale (MES)
Choices between a cost or value position. Such choices are necessary because higher
value creation tends to generate higher cost - Answer-Strategic trade-offs
A new product which known components, based on existing technologies, are
reconfigured In a novel way to attack new markets - Answer-Architectural innovation
An innovation that leverages new technologies to attack existing markets from the
bottom up - Answer-Disruptive innovation
An innovation that squarely builds on an established knowledge base and steadily
improves an existing product or service - Answer-Incremental innovation
New ways to produce existing products or deliver existing services - Answer-Process
innovation
, The simultaneous pursuit of differentiation and low cost in a way that creates a leap in
value for both the firm and the consumers; considered a cornerstone of blue ocean
strategy - Answer-Value innovation
Conceptual model that shows how each stage of the industry life cycle is dominated by
a different customer group - Answer-Crossing-the-chasm framework
The process by which people undertake economic risk to innovate- to create new
products, processes, and sometimes new organizations - Answer-Entrepreneurship
Competitive benefits that accrue to the successful innovator - Answer-First-mover
advantages
The five different stages; introduction, growth, shakeout, maturity, and decline, that
occur in the evolution of an industry over time - Answer-Industry life cycle
The positive effect (externality) that one user of a product or service has on the value of
that product for other users - Answer-Network effects
A form of intellectual property that gives the inventor exclusive rights to benefit from
commercializing a technology for a specified time period in exchange for public
disclosure of the underlying idea - Answer-Patent
An enterprise that creates value by matching external producers and consumers in a
way that creates value for all participants, and that depends on the infrastructure or
platform that the enterprise manages - Answer-Platform business
The market environment in which all players participate relative to the platform -
Answer-Platform ecosystem
An innovation that was developed for emerging economies before introduced in
developed economies. Sometimes also called frugal innovation - Answer-Reverse
innovation
The pursuit of social goals while creating a profitable business - Answer-Social
entrepreneurship
Markets where the market leader captures almost all of the market share and is able to
extract a significant amount of the value created - Answer-Winner-take-all markets
Changes in an industry value chain that involve moving ownership of activities upstream
to originating (inputs) point of value chain - Answer-Backward vertical integration
Changes in an industry value chain that involve moving ownership of activities closer to
the end (customer) point of value chain - Answer-Forward vertical integration
with Complete Answers
The goal-directed actions managers take in their quest for competitive advantage when
competing in a single product market - Answer-Business-level strategy
Business level strategy that successfully combines differentiation and cost-leadership
activities using value innovation to reconcile the inherent tradeoffs - Answer-Blue ocean
strategy
Generic business strategy that seeks to create the same or similar value for customers
at a lower cost - Answer-Cost-leadership strategy
Generic business strategy that seeks to create higher value for customers than the
value that competitors create, while containing costs - Answer-Differentiation strategy
Increases in cost per unit when output increases - Answer-Diseconomies of scale
Decreases in cost per unit as output increases - Answer-Economies of scale
Savings that come from producing two or more outputs at less cost than producing each
output individually, despite using the same resources and technology - Answer-
Economies of scope
Output range needed to bring down the cost per unit as much as possible, allowing a
firm to stake out the lowest-cost position that is achievable through economies of scale -
Answer-Minimum efficient scale (MES)
Choices between a cost or value position. Such choices are necessary because higher
value creation tends to generate higher cost - Answer-Strategic trade-offs
A new product which known components, based on existing technologies, are
reconfigured In a novel way to attack new markets - Answer-Architectural innovation
An innovation that leverages new technologies to attack existing markets from the
bottom up - Answer-Disruptive innovation
An innovation that squarely builds on an established knowledge base and steadily
improves an existing product or service - Answer-Incremental innovation
New ways to produce existing products or deliver existing services - Answer-Process
innovation
, The simultaneous pursuit of differentiation and low cost in a way that creates a leap in
value for both the firm and the consumers; considered a cornerstone of blue ocean
strategy - Answer-Value innovation
Conceptual model that shows how each stage of the industry life cycle is dominated by
a different customer group - Answer-Crossing-the-chasm framework
The process by which people undertake economic risk to innovate- to create new
products, processes, and sometimes new organizations - Answer-Entrepreneurship
Competitive benefits that accrue to the successful innovator - Answer-First-mover
advantages
The five different stages; introduction, growth, shakeout, maturity, and decline, that
occur in the evolution of an industry over time - Answer-Industry life cycle
The positive effect (externality) that one user of a product or service has on the value of
that product for other users - Answer-Network effects
A form of intellectual property that gives the inventor exclusive rights to benefit from
commercializing a technology for a specified time period in exchange for public
disclosure of the underlying idea - Answer-Patent
An enterprise that creates value by matching external producers and consumers in a
way that creates value for all participants, and that depends on the infrastructure or
platform that the enterprise manages - Answer-Platform business
The market environment in which all players participate relative to the platform -
Answer-Platform ecosystem
An innovation that was developed for emerging economies before introduced in
developed economies. Sometimes also called frugal innovation - Answer-Reverse
innovation
The pursuit of social goals while creating a profitable business - Answer-Social
entrepreneurship
Markets where the market leader captures almost all of the market share and is able to
extract a significant amount of the value created - Answer-Winner-take-all markets
Changes in an industry value chain that involve moving ownership of activities upstream
to originating (inputs) point of value chain - Answer-Backward vertical integration
Changes in an industry value chain that involve moving ownership of activities closer to
the end (customer) point of value chain - Answer-Forward vertical integration
