OIM 210 TEST BANK QUESTIONS
AND ANSWERS
Key resources for competitive advantage (7 parts) - Answer-- Imitation resistant value
chain organization
- Brand
- Scale
- Data
- Network effects
- Distribution channels
- Patents
Economics of scale - Answer-When costs can be spread across increasing units of
production or in serving multiple customers
Economics of scale - Timing - Answer-Google achieved scale with lead time over
Microsoft
- Both have same cost to build a server farm
- Google receives 70% of all revenue from search engines
Economics of scale- Technology - Answer-Blue Nile uses technology to gain cost
advantage over Zales
- Both sell the same number of engagement rings
- Blue Nile has lower costs because all of their sales are done online
Switching costs - Answer-Cost of moving from one product to another
Switching costs types (6) - Answer-- Learning costs
- Information and data
- Financial commitment
- Contractural commitments
- Search costs
- Loyalty programs
Technology and timing - Answer-Timing and technology alone will not yield sustainable
competitive advantage
- Its what you do with the technology or timing
Technology and timing (ex. of leaders or followers who failed) - Answer-- Early movers:
Myspace -> replaced by Facebook
- Big follower: Amazon made Endless shoes to compete with Zappos -> Amazon ended
up buying Zappos
AND ANSWERS
Key resources for competitive advantage (7 parts) - Answer-- Imitation resistant value
chain organization
- Brand
- Scale
- Data
- Network effects
- Distribution channels
- Patents
Economics of scale - Answer-When costs can be spread across increasing units of
production or in serving multiple customers
Economics of scale - Timing - Answer-Google achieved scale with lead time over
Microsoft
- Both have same cost to build a server farm
- Google receives 70% of all revenue from search engines
Economics of scale- Technology - Answer-Blue Nile uses technology to gain cost
advantage over Zales
- Both sell the same number of engagement rings
- Blue Nile has lower costs because all of their sales are done online
Switching costs - Answer-Cost of moving from one product to another
Switching costs types (6) - Answer-- Learning costs
- Information and data
- Financial commitment
- Contractural commitments
- Search costs
- Loyalty programs
Technology and timing - Answer-Timing and technology alone will not yield sustainable
competitive advantage
- Its what you do with the technology or timing
Technology and timing (ex. of leaders or followers who failed) - Answer-- Early movers:
Myspace -> replaced by Facebook
- Big follower: Amazon made Endless shoes to compete with Zappos -> Amazon ended
up buying Zappos
