1. NextDoor is an instant messaging application for smartphones. New smartphone users find it easier to connect with friends and relatives through this mobile app when compared to other similar instant messaging applications. Hence, it has the largest user base in the industry. Thus, NextDoor app's value has increased primarily due to its
- learning curve effects.
- economies of scale.
- economies of scope.
- network effects.
2. Grace Apparel Inc. has decided to procure fabrics required for its garments from external suppliers instead of maintaining its own dyeing and weaving facilities. How will this decision affect the firm?
- The firm will be protected against the principal-agent problem.
- The firm's administrative costs will be low because of necessary bureaucracy.
- The firm will have more flexibility in purchasing and comparing prices of goods and services.
- The firm will have high-powered incentives, such as hourly wages and salaries.
3. The core competency of MotorCraft Inc. is its fuel-efficient engine found in its cars. These engines are developed and built in-house. The company realizes that there is a new market opportunity to diversify. Thus, it produces the car engines on a large scale and sells them to other automobile companies. In this scenario, MotorCraft is
- leveraging existing core competencies to target the chasm between the early adopter and early majority market segment.
- redeploying and recombining existing core competencies to compete in future markets.
- building new core competencies to create and compete in future markets.
- building new core competencies to protect and extend current market position.
4. Opula Inc., a luxury car company, sells the same cars and offers the same superior services in both its home country and foreign markets. The market it operates in faces low pressures for both local responsiveness and cost reductions. Which of the following strategies within the integration-responsiveness framework does Opula Inc. most likely pursue?
- a multidomestic strategy
- a transnational strategy
- a global-standardization strategy
- an international strategy