Week 2.1 (MC) PDF

**1. What is a critical risk of focusing intensely on both Apps Market Competition (AMC) and Apps Exclusivity?** A. It creates an imbalance in the platform's pricing strategy. B. It limits the scalability of indirect network effects. C. It causes developers to face conflicting incentives, reducin...

**1. What is a critical risk of focusing intensely on both Apps Market Competition (AMC) and Apps Exclusivity?** A. It creates an imbalance in the platform's pricing strategy. B. It limits the scalability of indirect network effects. C. It causes developers to face conflicting incentives, reducing application quality. D. It encourages platforms to over-prioritize niche markets. **Correct Answer**: C **2. How does intermediate distinctive positioning typically affect platform performance?** A. It strengthens network effects by creating broad appeal. B. It attracts niche audiences but risks losing mass market appeal. C. It leads to ambiguous positioning, which reduces market share and performance. D. It enhances platform performance through balanced differentiation. **Correct Answer**: C **3. Which of the following is an effective strategy to overcome the Chicken-and-Egg Problem?** A. Limit the number of developers on the platform to control quality. B. Subsidize one side of the market to attract the other side. C. Increase transaction fees to ensure early platform profitability. D. Focus solely on direct network effects. **Correct Answer**: B **4. Which factor is most critical for late entrants to succeed in platform-based markets against incumbents?** A. Offering significantly lower prices for users and developers. B. Leveraging strong indirect network effects and shaping consumer expectations. C. Focusing on intermediate distinctive positioning to capture both niche and mass markets. D. Prioritizing exclusivity deals with a few high-profile developers. **Correct Answer**: B **5. What differentiates indirect network effects from direct network effects?** A. Indirect network effects rely on users sharing resources, while direct network effects depend on complementary goods. B. Indirect network effects arise from complementary goods, while direct network effects depend on user-to-user interactions. C. Indirect network effects operate at low user adoption rates, while direct effects require a critical mass. D. Indirect network effects are more common in physical marketplaces than digital platforms. **Correct Answer**: B **6. In the context of Winner-Takes-All (WTA) markets, which scenario is most likely to occur?** A. All competing platforms coexist due to balanced competition. B. A dominant platform captures the majority of market share due to strong network effects. C. The market evolves toward a negative feedback loop, discouraging user growth. D. Smaller platforms consistently erode the lead of dominant incumbents. **Correct Answer**: B **7. What role does consumer expectations play in platform adoption for late entrants?** A. It influences developer participation but has no effect on user adoption. B. It has minimal impact if the incumbent has a large installed base. C. It shapes the perception of future platform success, directly affecting user adoption. D. It determines the level of exclusivity agreements developers are willing to sign. **Correct Answer**: C **8. Which trust-building mechanism is most effective for platforms attempting to attract both users and developers?** A. Subsidizing user acquisition through discounts and promotions. B. Offering transparent pricing and reliable dispute resolution mechanisms. C. Increasing exclusivity deals with marquee developers. D. Encouraging competition among developers to lower content costs. **Correct Answer**: B **9. Why is balancing high Apps Market Competition (AMC) with Exclusivity Agreements challenging for platforms?** A. It increases the cost of complementary goods for end-users. B. It creates a conflict for developers, reducing innovation and quality. C. It limits a platform's ability to attract marquee users. D. It reduces the scalability of direct network effects. **Correct Answer**: B **10. In a platform's strategic growth phase, which of the following tactics best addresses the Penguin Effect?** A. Securing exclusivity agreements with marquee users. B. Offering dynamic pricing strategies to incentivize user adoption. C. Delaying the platform launch until critical mass is achieved. D. Subsidizing both sides of the platform equally to reduce risk for users. **Correct Answer**: A Here are **5 multiple-choice questions** with small case descriptions: **11. Question**: High-Fi Tunes is a new music streaming platform that emphasizes ultra-high-quality audio and offers exclusive content from a few niche artists in jazz and classical music. However, they also allow independent artists to upload their music freely, aiming to create a broad library. Despite these efforts, they are struggling to grow their user base and attract popular mainstream artists. What strategic issue is High-Fi Tunes likely facing? A. Over-reliance on direct network effects. B. A conflicting balance between Apps Market Competition (AMC) and Apps Exclusivity. C. An inability to generate indirect network effects. D. A focus on the wrong niche of mainstream artists. **Correct Answer**: B **12. Question**: Streamerly is a new video streaming platform entering a market dominated by Netflix and Disney+. They offer niche documentary content and have secured exclusive rights to several award-winning films. However, their platform lacks a wide range of mainstream movies, and most consumers are unaware of their existence. What strategy could help Streamerly improve their market position? A. Reduce the price of subscriptions below competitors. B. Focus on improving indirect network effects by attracting complementary content providers. C. Prioritize intermediate positioning to appeal to broader audiences. D. Offer free trials to users without marketing efforts. **Correct Answer**: B **13. Question**: PlayFlex is a gaming platform that competes with established players like Steam. To attract users, they offer significant discounts on popular games and allow indie developers to upload games freely. Despite these efforts, they struggle to retain users because major gaming studios continue to release exclusives on Steam. Why is PlayFlex struggling in this scenario? A. They failed to attract marquee users. B. They focused too heavily on Apps Market Competition without securing exclusivity. C. They lack a critical mass of indie developers. D. They overestimated the importance of direct network effects. **Correct Answer**: B **14. Question**: Artly Connect is a platform for connecting freelance artists with clients. They rely on indirect network effects, as more clients joining the platform attract more artists, and vice versa. To incentivize adoption, they provide discounts to new users but have yet to achieve significant growth. Which tactic could help Artly Connect overcome the Chicken-and-Egg Problem? A. Focus on direct network effects by encouraging communication between artists. B. Subsidize the artist side to ensure a diverse pool of creators for clients. C. Offer premium features for free to all early adopters. D. Limit the number of clients until a sufficient number of artists join. **Correct Answer**: B **\ ** **15. Question**: StreamSmart is a small live-streaming platform trying to compete with Twitch. They target esports fans and streamers but lack strong features like user chatrooms and moderation tools. Users complain about slow responses to disputes and unclear pricing for premium features. What is StreamSmart's primary challenge, and how can they address it? A. Poor indirect network effects; invest in better streamer tools. B. Lack of trust-building mechanisms; improve transparency and dispute resolution. C. Intermediate distinctive positioning; focus solely on esports content. D. Weak direct network effects; offer free premium features to users. **Correct Answer**: B