Podcast Beta
Questions and Answers
Cirque Du Soleil disrupted the established industry by offering a lower class alternative to traditional circus experiences.
False
Platforms tend to drive down willingness to accept (WTA) as they facilitate exchange between groups.
False
Same-side network effects occur when more users on a platform increase the value of the platform for users on the other side of the market.
False
Strong network effects decrease willingness to accept (WTA) and make it more difficult for smaller firms to compete.
Signup and view all the answers
If the cost of having both products is high, willingness to accept (WTA) is increased.
Signup and view all the answers
Disney's corporate strategy is focused on creating competitive advantage in a single market.
Signup and view all the answers
A diversified firm engaging in joint production of two goods will always benefit from economies of scope.
Signup and view all the answers
Good reasons to diversify include managerial hubris and empire building.
Signup and view all the answers
Horizontal integration involves producing different products or services that share resources and capabilities.
Signup and view all the answers
Economies of scope always result in higher average prices.
Signup and view all the answers
Sharing knowledge is a bad reason to diversify.
Signup and view all the answers
Adjacencies are growth opportunities that tear down existing competencies.
Signup and view all the answers
Insourcing can be more beneficial when there is a possibility of hold-up in market relationships.
Signup and view all the answers
Diseconomies of scope occur when a company diversifies into unrelated businesses.
Signup and view all the answers
Revenue synergies are harder to estimate than cost synergies.
Signup and view all the answers
Vertical integration involves combining different stages of production within a single firm.
Signup and view all the answers
Outsourcing can lead to higher incentives for performance due to market relationships.
Signup and view all the answers
The winner's curse refers to the phenomenon of the acquired firm's stock dropping after an acquisition.
Signup and view all the answers
Economies of scale refer to the reduction of costs by producing multiple related products.
Signup and view all the answers
A company can achieve economies of scope by sharing knowledge across its businesses.
Signup and view all the answers
Product bundling is an example of economies of scale.
Signup and view all the answers
Diseconomies of scope can sometimes occur due to increased costs.
Signup and view all the answers
Canon copier and printers are an example of market power in economies of scope.
Signup and view all the answers
Economies of scope can be achieved by purchasing from a supplier network.
Signup and view all the answers
Firms can increase their buyer power by increasing the number of substitutes.
Signup and view all the answers
The 'Better off' test is used to determine if a company should vertically integrate.
Signup and view all the answers
Managerial hubris is a type of market efficiency.
Signup and view all the answers
The 'Winner's curse' refers to the tendency for firms to overbid in auctions.
Signup and view all the answers
Economies of scope refer to cost savings from producing at a larger scale.
Signup and view all the answers
Vertical integration involves operating in multiple industries.
Signup and view all the answers
