Strategic Foundations And Digital Ecosystems Assessment Practice Tests

Question 1

A firm's total value creation $V$ is defined by the sum of primary activities $P$ and support activities $S$. If a firm reduces its support activity costs by $20\%$ while maintaining the same output, and the original cost structure was $P = 500$ and $S = 300$, calculate the new total cost $C_{new}$.

Accepted Answer

740

Answer

640

Answer

800

Answer

760

Question 2

In an industry where the profit margin $\pi$ is determined by the formula $\pi = R - (C_o + C_s)$, where $R$ is revenue, $C_o$ is operational cost, and $C_s$ is strategic investment cost, if a firm shifts from a strategy of operational effectiveness to strategic positioning, it typically accepts a higher $C_s$ to achieve a disproportionate increase in $R$. If $R$ increases by $40\%$ from an initial $1000$ and $C_s$ increases from $100$ to $250$ while $C_o$ remains $500$, determine the change in profit $\Delta\pi$.

Accepted Answer

50

Answer

150

Answer

250

Answer

350

Question 3

If a resource satisfies the VRIN criteria, the firm's competitive advantage is mathematically guaranteed to be infinite in duration ($t 	o \infty$).

Accepted Answer

False

Answer

True

Question 4

Using Porter's Five Forces, if the threat of substitutes is modeled by the function $S(p) = \frac{1}{p^2}$ where $p$ is the price of the industry product, determine the sensitivity of the threat to price changes by calculating the derivative $\frac{dS}{dp}$.

Accepted Answer

-2/p^3

Question 5

Which of the following scenarios demonstrate a shift from operational effectiveness to strategic positioning?

Answer

A firm redesigns its entire logistics network to enable 24-hour delivery when competitors only offer 3-day shipping.

Answer

A firm adopts a unique proprietary software that allows for mass customization of products, a feature competitors cannot replicate.

Answer

A firm increases its advertising budget by 10% to match the spending of its largest competitor.

Answer

A firm implements a new assembly line robot that reduces labor costs by 5% to match industry standards.

Question 6

If a firm's buyer power index $B$ is defined as $B = \frac{I_a}{T_p}$, where $I_a$ is information asymmetry and $T_p$ is price transparency, and the internet causes $T_p$ to increase by a factor of 4 while $I_a$ decreases by a factor of 2, calculate the new buyer power $B_{new}$ in terms of the original $B$.

Accepted Answer

B/8

Question 7

In the context of the five components of information systems, if a company implements a new CRM software but fails to update its internal procedures or train its staff, which component is the primary failure point?

Accepted Answer

People and procedures

Answer

Hardware

Answer

Software

Answer

Data

Question 8

Netflix utilizes collaborative filtering to predict user preferences. If a user's rating vector is $U = [5, 3, 0, 4]$ and the item similarity matrix is $S$, calculate the predicted rating for the third item given the dot product $U \cdot S_3 = 12$ and the normalization factor $\sum |U_i| = 12$. What is the predicted rating?

Accepted Answer

1

Question 9

A streaming platform faces a fixed cost $F = €1,000,000$ to license content and a marginal cost $MC = €0$ per stream. If the platform has $N$ subscribers, the average cost per subscriber is given by $AC(N) = \frac{F}{N}$. If the platform aims to reach an average cost of $€2$ per subscriber, determine the required number of subscribers $N$.

Accepted Answer

Option A

Answer

Option B

Answer

Option C

Answer

Option D

Question 10

Metcalfe's Law states that the value of a network is proportional to $V \propto n^2$, where $n$ is the number of users. If a platform grows from $n_1 = 100$ users to $n_2 = 1,000$ users, by what factor does the potential value of the network increase?

Accepted Answer

Option A

Answer

Option B

Answer

Option C

Answer

Option D

Question 11

In a two-sided market with cross-side network effects, if the number of developers $D$ increases, the utility for users $U$ increases according to $U(D) = k \cdot D$. This implies that the platform's value is independent of the number of users already on the platform.

Accepted Answer

False

Answer

True

Question 12

A firm is considering a subsidy strategy to enter a market. If the cost of acquiring a user is $C_a = €50$ and the lifetime value of a user is $LTV = €120$, calculate the maximum subsidy $S$ the firm can offer per user while maintaining a positive net gain $G = LTV - C_a - S > 0$.

Accepted Answer

Less than €70

Question 13

Which of the following factors contribute to the 'switching costs' that Netflix creates for its subscribers? (Select all that apply)

Accepted Answer

Option A

Answer

Option B

Answer

Option C

Answer

Option D

Question 14

Consider a platform where the total number of possible interactions in a two-sided market is $I = n_1 	imes n_2$. If $n_1$ (users) grows at a rate of $10\%$ and $n_2$ (providers) grows at a rate of $20\%$, what is the approximate percentage growth rate of the total interactions $I$?

Accepted Answer

Option A

Answer

Option B

Answer

Option C

Answer

Option D

Question 15

If computing performance doubles every 18 months according to Moore's Law, calculate the total performance improvement factor after 6 years. Let $P_0$ be the initial performance, $n$ be the number of doubling periods, and $P_f$ be the final performance. Given $n = \frac{72 	ext{ months}}{18 	ext{ months}} = 4$, determine $P_f$ in terms of $P_0$.

Accepted Answer

16$P_0$

Answer

4$P_0$

Answer

8$P_0$

Answer

32$P_0$

Question 16

A software company observes that when the price of their cloud storage service drops from €100 to €80, the quantity of units sold increases from 1,000 to 1,500. Calculate the price elasticity of demand using the formula $E = \frac{\% \Delta Q}{\% \Delta P}$.

Accepted Answer

-2.25

Question 17

An enterprise is evaluating software systems. Which system is specifically designed to manage the flow of raw materials, manufacturing, and distribution of finished goods?

Accepted Answer

Supply Chain Management (SCM)

Answer

Customer Relationship Management (CRM)

Answer

Enterprise Resource Planning (ERP)

Answer

Business Intelligence (BI)

Question 18

In the context of network protocols, the Transmission Control Protocol (TCP) is preferred over the User Datagram Protocol (UDP) for applications where packet loss is acceptable but low latency is critical, such as live video streaming.

Accepted Answer

False

Answer

True

Question 19

Which of the following factors are primary contributors to the failure of large-scale enterprise software projects?

Answer

Scope creep

Answer

Inadequate testing

Answer

Excessive hardware budget

Answer

Poor goal setting

Question 20

Given that the IPv4 address space is limited to $2^{32}$ addresses, calculate the total number of unique addresses available in IPv4. Express your answer in billions (1 billion = $10^9$).

Accepted Answer

4.29 billion

Strategic Foundations And Digital Ecosystems Assessment Practice Tests

Practice Tests

Strategic Foundations and Digital Ecosystems Assessment

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