Choose wisely. There is only one correct answer to each question.
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1.
There are many ways a company can build a sustainable competitive advantage in its industry. Which of the following is not one of them?
None of the above. All of these approaches can build a sustainable competitive advantage.
2.
How can a low-cost producer achieve a barrier to entry?
All of the above. These are all ways that a low-cost producer can achieve barriers to entry.
3.
In the language of companies, what are switching costs?
Expenses incurred to switch over from one product to another. From the company's point of view, these can be a very positive thing.
4.
Which of the following is unlikely to be an attribute of companies with efficient scales?
They are in a rapidly growing market. Being in a rapidly growing market normally means that there is a lot of room for new competitors to come in, and that is not a part of the efficient-scale universe.
5.
When a company tries to differentiate its product from those of its competition by spending money on marketing, it is attempting to create what type of moat?
Intangible assets. Marketing is generally done to build brands, and brands are intangible assets.
6.
An example of the network effect is when _______.
A company starts making parts for another company. This kind of complementarity increases the value of the latter company.
