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1.
There are many ways a company can build a sustainable competitive advantage in its industry. Which of the following is not one of them?
None of the above. All of these approaches can build a sustainable competitive advantage.
2.
Harley-Davidson has what type of economic moat?
Intangible assets. Harley's brand is an intangible asset that is a sustainable competitive advantage.
3.
If a company is able to price its products lower than its competition and still make a profit while its competition is in the red, it has what type of moat?
Low-cost producer. Being a low-cost producer allows companies to price their products at lower levels than the competition, attracting buyers. Likewise, companies with low costs can price their products at the same level as competitors and make a higher profit.
4.
An example of the network effect is when _______.
A company starts making parts for another company. This kind of complementarity increases the value of the latter company.
5.
Why would a company raise its switching costs?
To lock its customers in. The more customers are locked in, the more likely a company can raise prices and still keep them.
6.
Having an efficient scale also means having a wide moat.
False. Although there are some efficient-scales with wide moats, the majority of them have narrow moats.
