Management 3300 Chapter 9 Mizzou Questions with
Correct Answers
Network effects Correct Answer-When the value of a product or service
increases as its number of users expands. Also referred to as network
externalities or Metcalfe's Law
Not subject Correct Answer-Most products are __________ to network
effects
Presence of network effects Correct Answer-Among the most important
reason you'll pick one product or service over another
Platforms Correct Answer-Products and services that allow for the
development and integration of software products and other
complimentary goods, effectively creating an ecosystem of value-added
offerings
3 sources of network effects Correct Answer-1. exchange
2. staying power
3. complementary benefits
Exchange Correct Answer-First source of network effects; a network
becomes more valuable because its users can potentially communicate
with more people.
, Exchange Correct Answer-Every product or service subject to network
effects fosters some kind of ______
Examples of exchange for technology firms Correct Answer--
messaging
- movies/music
- money
- video games/computer programs
Staying power Correct Answer-The second source of network effect; the
long-term viability of a product or service
Stronger Correct Answer-Networks with a greater number of users
suggest a ______ staying power
Switching costs Correct Answer-Costs incurred when moving from one
product to another
Directly Correct Answer-Switching costs are ______ related to staying
power
Strengthen Correct Answer-Switching costs _____ the value of network
effects as a strategic asset
Correct Answers
Network effects Correct Answer-When the value of a product or service
increases as its number of users expands. Also referred to as network
externalities or Metcalfe's Law
Not subject Correct Answer-Most products are __________ to network
effects
Presence of network effects Correct Answer-Among the most important
reason you'll pick one product or service over another
Platforms Correct Answer-Products and services that allow for the
development and integration of software products and other
complimentary goods, effectively creating an ecosystem of value-added
offerings
3 sources of network effects Correct Answer-1. exchange
2. staying power
3. complementary benefits
Exchange Correct Answer-First source of network effects; a network
becomes more valuable because its users can potentially communicate
with more people.
, Exchange Correct Answer-Every product or service subject to network
effects fosters some kind of ______
Examples of exchange for technology firms Correct Answer--
messaging
- movies/music
- money
- video games/computer programs
Staying power Correct Answer-The second source of network effect; the
long-term viability of a product or service
Stronger Correct Answer-Networks with a greater number of users
suggest a ______ staying power
Switching costs Correct Answer-Costs incurred when moving from one
product to another
Directly Correct Answer-Switching costs are ______ related to staying
power
Strengthen Correct Answer-Switching costs _____ the value of network
effects as a strategic asset
