Competitive Strategy Coursera week 6 Quiz

In this blog you will find the correct answer of the Coursera quiz Competitive Strategy Coursera week 6 Quiz mixsaver always try to bring the best blogs and best coupon codes

1. What are typical assumptions in the Bertrand Paradox?


2. According to the Bertrand Paradox, firms with identical products end up in fierce competition and make zero profits. Which of the following aspects would change this outcome?


3. Imagine you are the CEO of BubbleJoe, a company specialized on chewing gum with mint flavour. Your only competitor, BubbleYum, also focuses on chewing gum with mint flavour. How could you manage to avoid the Bertrand Trap and make positive profits?



PRACTICE QUIZ Product Differentiation


1. Imagine there are three different companies manufacturing smartphones. The smartphones have different colours and different memory capacities.

Which of the following statements are true in this context?


2. Next to the University of Paris, 1000 students live along a boulevard. Every morning two competing bakers come with their push carts to sell fresh baguette (same quality and taste).

The students love to eat fresh baguette for breakfast, but they are lazy to walk.

What is true about this specific example of the Hotelling Model?



PRACTICE QUIZ  Pricing and Product Decisions


1. Porter suggests the following generic strategies for creating a defendable position and outperforming competitors in the industry:


2. According to this graph, which strategy does C represent?


Value chain reconfiguration

3. What is true about Porter’s generic strategies?



Designing Products Wisely


1. Coca Cola and Pepsi both sell bottled cola soft drinks. Their cola soft drinks have the same quality and price but taste differently. In the Hotelling Bertrand model, the difference in taste of Coca Cola and Pepsi is represented by…


2. Imagine two firms are active in the same market. What can these firms do to avoid the Bertrand trap?


3. Imagine there are two companies offering the same kind of product: One firm is offering a low quality version and the other firm is offering a high quality version.

Given this market structure, the firm offering low quality…


4. Two products A and B are horizontally differentiated if…


5. Which of the following assumptions lead to the unrealistic prediction of the Betrand Paradox:


6. Imagine you are the owner of an ice cream stall at Marienplatz, the city centre of Munich. You are known for selling low quality vanilla ice cream to affordable prices. Next door opens a Häagen Dazs store that sells premium vanilla ice cream for high prices.

Which of the following statements are true?


7. Imagine you are thinking about buying a new smartphone. At the retailing store, the sales person shows you the latest models from Apple, Samsung and HTC. Some smartphones use the new LTE transmission technology that allows you to surf the web much faster. Others are using the conventional 3G technology with lower transmission rates.

Which of the following statements are true?


8. Which of the following statements are true?


9. Burger King and McDonald’s sell burgers of the same price and quality but of different taste. Some consumers prefer burgers from Burger King, others like McDonald’s more than Burger King. According to the Hotelling Bertrand model, which of the following events have (ceteris paribus) a positive influence on the profits of the two fast food restaurants?


10. According to the Bertrand Paradox, two firms in the same market reach a Nash Equilibrium where both firms charge a price …





1. Imagine British Telecom is the monopolist for landline phone calls in the UK. Every day, 50,000 minutes of phone calls are sold throughout the UK. British Telecom charges GBP 6 per minute.

Now a small company called London Calls enters the market. London Calls charges GBP 4 per minute and limits its network to the Greater London area where 50% of the UK’s overall minutes of phone calls are sold. London Calls can convince British Telecom that it will not extend its network further.

Assume that the quality of the phone calls is the same for British Telecom and London Calls. All consumers will switch to the supplier with the lower prices. There are no switching costs. The companies cannot charge different prices for different regions.

Will British Telecom attack London Calls?


2. Imagine now that the Olympic Games last for three weeks.

Coca Cola and Pepsi have to decide once at the beginning of each week at the same time how many cans they want to sell in the following week. The storage space on site is limited, so that they have to sell all the produced cans in the respective week.

Can this change the outcome of the game described in Question 8?


3. Imagine Sony and Philips are working on a new optical disc storage medium designed to supersede the DVD and the Blu-Ray Disc. Each company develops its own technical standard. The company’s payoffs from the new product depend on which technical standard succeeds in the end. They are illustrated in the following payoff matrix.

Sony has now the chance to speed up the construction of its production plant so that it will be ready earlier than Philips’ construction plant.

What will be the outcome of the game?


4. Which of the following statements are true?


5. Which of the following statements are true?


6. Imagine you are head of Sony Entertainment and responsible for the PlayStation game console. You have the chance to buy Arts Electronic, a company that sells a sports game for your console.

Should you agree to this acquisition? Choose all the reasons for your decisions:


7. Imagine McDonalds and Burger King operate fast food restaurants in New York City. The restaurants are located close to each other and are in fierce competition.

To decrease competition and improve profitability…


8. Imagine Coca Cola and Pepsi produce soft drinks of equal taste and quality. They are the only suppliers of soft drinks to the Olympic Games. They have a stall next to each other where they sell their soft drinks in cans that are specially designed for the event. The Olympic Games last for one week and both companies have to decide once and at the same time how many cans they want to sell.

In competition Coca Cola and Pepsi make each profits of € 180k. Instead of competing against each other Coca Cola and Pepsi could also cooperate and set monopoly quantities as if they would be an integrated monopolist. If both companies cooperate and set monopoly quantities they equally share the monopoly profits. A monopolist would achieve profits of €855 k. If one company is cooperative and the other one deviates, the cooperating company will achieve profits of €160 k whereas the deviating company will get profits of € 530k.

What will be the outcome of the game?


9. Which of the following statements are true?


10. Apple (A) and Blackberry (B) compete in the market for smartphones. Both firms have to decide whether they want to engage in R&D for a new type of device with a 3D enabled haptic touchscreen. Because A is relatively more efficient in R&D, fixed costs for this R&D project are $10mn for A and $15mn for B. Both firms are equally likely to come up with a marketable innovation (probability p). Expected profits from the new technology are $15mn if one firm manages to be alone in the market and $5mn each if both firms come up with a product. We assume that there are no variable costs.

What is the expected payoff for A if both firms engage in R&D?


11. A strategy in the game theoretic sense is…


12. A way to credibly commit to a strategy is…


13. Firms use patents to decrease competition, especially with sleeping patents.


14. Two products A and B are complements if…


15. An incumbent firm may prevent entry of a competitor by…


16. Niche entry is an effective entry strategy if…


17. Let’s get back to the one period competition case (question 8). Imagine now that the stalls of Coca Cola and Pepsi are not located next to each other but at opposite ends of the Olympic Games site.

Does this change the companies’ profits compared to the situation in question 8?


18. Imagine you are the CEO of Rolex. Your company and Breitling are the leading manufacturers of luxury watches.

A UK based film production studio plans a new James Bond action movie and approaches you with a product placement offer: If you pay £ 2mn, James Bond will wear a Rolex watch in the movie. The production studio makes clear that they will make the same offer to Breitling if you don’t accept the deal.

You receive the following information from your market research department:

• If you accept the deal, you can achieve additional gross profits of £ 1.5mn. Breitling’s gross profits decrease by £ 0.5mn.

• If Breitling accepts the deal and is lucky (probability = 50%), Breitling can achieve additional gross profits of £ 3mn. Your gross profits decrease by £ 1.5mn.

• If Breitling accepts the deal and is unlucky (probability = 50%), Breitiling can achieve additional gross profits of £ 2mn. Your gross profits decrease by £ 0.5mn.

• If neither Breitling nor you accept the deal, there is no change in gross profits.

Should you accept the deal?


19. A Nash Equilibrium usually contains dominated strategies.


20. Which of the following statements are false?


21. Which of the following assumptions lead to the unrealistic prediction of the Bertrand paradox?


22. Applied research is more risky than basic research as a general rule.


23. The tradeoff between a replacement effect and an efficiency effect means that a monopolist has to decide between drastic innovation and process innovation.


24. The existence of substitutes makes a market less attractive, because…


25. Pizza Hut and Domino’s Pizza bot sell pizzas at the city centre in Munich. Some consumers only like Pizza Hut, others prefer Domino’s Pizza. Most of the consumers make their choice dependent on prices. Each pizza stall can charge low, medium or high prices. The responding payoffs are illustrated in the payoff matrix below.

Which prices will the pizza stalls set, assuming that they are rational and profit maximizing?



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