MBA 703 COMPREHENSIVE ANSWERS AND
QUESTIONS SET A+
✔✔What is the hybrid approach to SC model? - ✔✔Push-based system to get products
to regional warehouse
From there they wait for orders that pull products in near retailers
✔✔What is a brand? - ✔✔The symbolic embodiment of all the information connected
with a product or service.
✔✔Viral marketing: - ✔✔Leveraging the enthusiasm of consumers to promote a product
or service
✔✔Brand: - ✔✔A strong brand can be exceptionally powerful resource for competitive
advantage
-consumers use brands to decide which company's products are better, thus forming
brand loyalty
✔✔Scale Advantages: - ✔✔-businesses benefit from economies of scale: Costs can be
spread across increasing units of production or in serving multiple customers
- organizations are scalable if they benefit from scale economies as they develop
-developing firms may gain bargaining power with their suppliers or buyers
✔✔Switching costs - ✔✔costs incurred by consumers when switching from one product
to another-
-Firms that seem dominant but that do not have high switching costs can be rapidly
outshines by strong rivals
-Sources: learning costs, information & data, financial commitment, contractual
commitments, search costs, loyalty programs
✔✔Value of service & switching costs - ✔✔In order to win customers from an
established incumbent, a late-entering rival must offer a product or service that not only
, exceeds the value offered by the incumbent, but also exceeds the incumbent's value
and any customer switching costs.
✔✔Differentiation - ✔✔Technology is used by firms to differentiate their wares
-Data plays a critical role in differentiation
-COMMODITIES: products or services that are nearly identically offered from multiple
vendors (gold wheat)
✔✔Network Effects - ✔✔When the value of a product or service increases as its
number of users expands
-referred to as network externalities or Metcalfe's Law
-Switching costs play a role in determining the strength of network effects
-Strong assets for firms that can control & leverage a leading standard
✔✔Open Table & Network Effects - ✔✔Network effects are at the center of Open table's
dominance in restaurant reservations
Open Table has built the world's largest online restaurant reservation system
*Customers are attracted to the service that has the most restaurants, and restaurants
are attracted to the service w/ the most customers. **strategists call this a 2-sided
market**
✔✔Distribution Channels: - ✔✔Can be critical to a firm's success
Through networked technology, users can be recruited to create new distribution
channels
Affiliates: Third parties that promote a product or service in exchange for a customer of
any sales
✔✔API's (Application programming interfaces) - - ✔✔Programming hooks, or
guidelines, published by firms that tell other programs how to get a service to perform a
task such as send or receive data.
✔✔Patents: - ✔✔grant protection for intellectual properties; applicable to innovations
deemed to be useful, novel, and nonobvious
-Patents provide firms a degree of protection from copy cats
-cut off paths to exploit an innovation
-considered to be unfairly stacked against start-ups
✔✔Porters competitive forces Model: - ✔✔New Market Entrants, Substitute Products,
Suppliers, Customers
✔✔Five Competitive forces shape fate of firm: - ✔✔1. Traditional competitors / rivals
2. New market entrants
3. Substitute products & services
4. Customers
QUESTIONS SET A+
✔✔What is the hybrid approach to SC model? - ✔✔Push-based system to get products
to regional warehouse
From there they wait for orders that pull products in near retailers
✔✔What is a brand? - ✔✔The symbolic embodiment of all the information connected
with a product or service.
✔✔Viral marketing: - ✔✔Leveraging the enthusiasm of consumers to promote a product
or service
✔✔Brand: - ✔✔A strong brand can be exceptionally powerful resource for competitive
advantage
-consumers use brands to decide which company's products are better, thus forming
brand loyalty
✔✔Scale Advantages: - ✔✔-businesses benefit from economies of scale: Costs can be
spread across increasing units of production or in serving multiple customers
- organizations are scalable if they benefit from scale economies as they develop
-developing firms may gain bargaining power with their suppliers or buyers
✔✔Switching costs - ✔✔costs incurred by consumers when switching from one product
to another-
-Firms that seem dominant but that do not have high switching costs can be rapidly
outshines by strong rivals
-Sources: learning costs, information & data, financial commitment, contractual
commitments, search costs, loyalty programs
✔✔Value of service & switching costs - ✔✔In order to win customers from an
established incumbent, a late-entering rival must offer a product or service that not only
, exceeds the value offered by the incumbent, but also exceeds the incumbent's value
and any customer switching costs.
✔✔Differentiation - ✔✔Technology is used by firms to differentiate their wares
-Data plays a critical role in differentiation
-COMMODITIES: products or services that are nearly identically offered from multiple
vendors (gold wheat)
✔✔Network Effects - ✔✔When the value of a product or service increases as its
number of users expands
-referred to as network externalities or Metcalfe's Law
-Switching costs play a role in determining the strength of network effects
-Strong assets for firms that can control & leverage a leading standard
✔✔Open Table & Network Effects - ✔✔Network effects are at the center of Open table's
dominance in restaurant reservations
Open Table has built the world's largest online restaurant reservation system
*Customers are attracted to the service that has the most restaurants, and restaurants
are attracted to the service w/ the most customers. **strategists call this a 2-sided
market**
✔✔Distribution Channels: - ✔✔Can be critical to a firm's success
Through networked technology, users can be recruited to create new distribution
channels
Affiliates: Third parties that promote a product or service in exchange for a customer of
any sales
✔✔API's (Application programming interfaces) - - ✔✔Programming hooks, or
guidelines, published by firms that tell other programs how to get a service to perform a
task such as send or receive data.
✔✔Patents: - ✔✔grant protection for intellectual properties; applicable to innovations
deemed to be useful, novel, and nonobvious
-Patents provide firms a degree of protection from copy cats
-cut off paths to exploit an innovation
-considered to be unfairly stacked against start-ups
✔✔Porters competitive forces Model: - ✔✔New Market Entrants, Substitute Products,
Suppliers, Customers
✔✔Five Competitive forces shape fate of firm: - ✔✔1. Traditional competitors / rivals
2. New market entrants
3. Substitute products & services
4. Customers
