In which of the following is a firm LEAST likely to diversify?

1. When firms cannot easily differentiate in their focal market
2. When a single business firm's market share is close to 90%
3. When an expansion of capacity increases economies of scope
4. When firms seek to smooth earnings

You are the president of a medical device company known for its engineering capabilities that makes heart valves. You have recently read a scientific journal article that a new engineering breakthrough has the potential to make your primary heart value product obsolete. Which of the following actions are most likely to best support your firm's long-term financial health?

1. Investing a portion of your R&D budget in your firm's traditional technology to improve it and a portion of your R&D budget to develop the new engineering technology
2. Investing your R&D budget in your firm's traditional technology to continue to improve it
3. Invest your R&D budget in a new biotechnology breakthrough instead of the engineering breakthrough
4. Significantly reducing investments in all R&D

Being a first-mover may provide a competitive advantage in all EXCEPT which of the following?

1. When you can establish a leading brand
2. When there are significant learning curve effects
3. When the minimum efficient scale is low
4. When you can establish precommitment contracts with your suppliers

Resources and capabilities are unable to provide a sustainable competitive advantage if they...

1. Provide a higher willingness to pay for customers
2. Are in the form of a new patented drug
3. Are widely shared and available in the industry
4. Reflect a tight strategic fit among firm activities