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".)
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".)
