study_questions_for_exam_1__spring_08_Exam - Study...

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Study Questions for Exam 1 1. Generally, which firms captured more value: aluminum producers or Coke and Pepsi? Explain your answer by analyzing the competitive forces in the concentrate industry. In each industry, which of the competitive forces seem to be the most important in determining average profitability? 2. a. How would you characterize the business-level strategy used by Coke and Pepsi? Would you say that it is similar or different to that used by aluminum smelters. Explain. b. What are two different ways in which Coke might capture value from it’s business-level strategy? Which does Coke seem to pursue? Relate your answer to the nature of demand in the cola industry. c. Would you say that Coke and Pepsi have a competitive advantage? Explain. d. Do any firms appear to have competitive advantage in the aluminum industry? Explain. 3. Briefly explain how network externalities can create barriers to imitation of a firm’s competitive advantage? Give an example where you would expect that network effects would create a barrier to imitation, and explain how it would create a barrier to imitation. 4. In defending his company against allegations of anticompetitive practices, Bill Gates claimed that if someone developed an operating system for personal computers that was superior to MS Windows, it would quickly become the market leader. Do you agree? To answer this question, consider the following: If you developed Orange, a new operating system that was easier to use than Windows, and could be produced for the same cost, what factors would make it difficult for you to steal market share from Windows? 5. Terrell’s TVs manufacturer TVs, which it then sells to the Best Buy here in Ithaca. Terrell’s pays $300 for the components, and $700 for labor to manufacture each TV. The components are commodities, widely available from a large number of suppliers. Labor is easily replaceable. Best Buy incurs costs of $100 per TV for
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This test prep was uploaded on 02/20/2009 for the course AEM 4240 taught by Professor Blalock,g. during the Spring '07 term at Cornell University (Engineering School).

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study_questions_for_exam_1__spring_08_Exam - Study...

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