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Passage49 Answers
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Passage 49
Traditionally, the first firm to commercialize a new
technology has benefited from the unique opportunity to
shape product definitions, forcing followers to adapt to a
standard or invest in an unproven alternative. Today, how-
( 5) ever, the largest payoffs may go to companies that lead in
developing integrated approaches for successful mass
production and distribution.
Producers of the Beta format for videocassette recorders
(VCR's), for example, were first to develop the VCR com-
(10) mercially in 1975, but producers of the rival VHS (Video
Home System) format proved to be more successful at
forming strategic alliances with other producers and
distributors to manufacture and market their VCR format
Seeking to maintain exclusive control over VCR distri-
(15) bution. Beta producers were reluctant to form such alli-
ances and eventually lost ground to VHS in the compe-
tition for the global VCR market.
Despite Beta's substantial technological head start and
the fact that VHS was neither technically better nor cheaper
(20) than Beta, developers of VHS quickly turned a slight early
lead in sales into a dominant position. Strategic alignments
with producers of prerecorded tapes reinforced the VHS
advantage. The perception among consumers that prere-
corded tapes were more available in VHS format further
(25) expanded VHS's share of the market. By the end of the
1980's. Beta was no longer in production.
1. The passage is primarily concerned with which of the
following?
(A) Evaluating two competing technologies
(B) Tracing the impact of a new technology by narrating
a sequence of events
(C) Reinterpreting an event from contemporary business
history
(D) illustrating a business strategy by means of a case
history
(E) Proposing an innovative approach to business
planning
2. According to the passage, today's successful firms,
unlike successful firms in the past, may earn the greatest
profits by
(A) investing in research to produce cheaper versions of
existing technology
(B) being the first to market a competing technology
(C) adapting rapidly to a technological standard
previously set by a competing firm
(D) establishing technological leadership in order to
shape product definitions in advance of competing
firms.
(E) emphasizing the development of methods for the
mass production and distribution of a new
technology.
3. According to the passage, consumers began to develop a
preference for VCR's in the VHS format because they
believed which of the following?
(A) VCR's in the VHS format were technically better
than competing-format VCR's.
(B) VCR's in the VHS format were less expensive than
competing-format VCR's.
(C) VHS was the first standard format for VCR's.
(D) VHS prerecorded videotapes were more available
than Beta-format tapes.
(E) VCR's in the Beta format would soon cease to be
produced.
4. The author implies that one way that VHS producers
won control over the VCR market was by
(A) carefully restricting access to VCR technology
(B) giving up a slight early lead in VCR sales in order to
improve long-term prospects.
(C) retaining a strict monopoly on the production of
prerecorded videotapes.
(D) sharing control of the marketing of VHS-format
VCR's
(E) sacrificing technological superiority over Betaformat
VCR's in order to remain competitive in price.
5. The alignment of producers of VHS-format VCR's with
producers of prerecorded videotapes is most similar to
which of the following?
(A) The alignment of an automobile manufacturer with
another automobile manufacturer to adopt a
standard design for automobile engines.
(B) The alignment of an automobile manufacturer with
an automotive glass company whereby the
manufacturer agrees to purchase automobile
windshields only from that one glass company
(C) The alignment of an automobile manufacturer with a
petroleum company to ensure the widespread
availability of the fuel required by a new type of
engine developed by the manufacturer.
(D) The alignment of an automobile manufacturer with
its dealers to adopt a plan to improve automobile
design.
(E) The alignment of an automobile dealer with an
automobile rental chain to adopt a strategy for an
advertising campaign to promote a new type of
automobile
6. Which of the following best describes the relation of the
first paragraph to the passage as a whole?
(A) It makes a general observation to be exemplified.
(B) It outlines a process to be analyzed.
(C) It poses a question to be answered.
(D) It advances an argument to be disputed.
(E) It introduces conflicting arguments to be reconciled.
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