Traditionally, the first firm to commercialize a new technology has benefited from the unique opportunity to shape product definitions, forcing followers1 to adapt to a standard or invest in an unproven alternative. Today, how- ever, the largest payoffs may go to companies that lead in developing integrated approaches for successful mass production and distribution.
Producers of the Beta format2 for videocassette recorders , for example, were first to develop the VCR com- mercially in 1975, but producers of the rival VHS 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- 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 technological3 head start and the fact that VHS was neither technically4 better nor cheaper than Beta, developers of VHS quickly turned a slight early lead in sales into a dominant5 position. Strategic alignments7 with producers of prerecorded tapes reinforced the VHS advantage. The perception among consumers that prere- corded tapes were more available in VHS format further 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?
evaluating two competing technologies
Tracing the impact of a new technology by narrating8 a sequence of events
Reinterpreting an event from contemporary business history
illustrating9 a business strategy by means of a case history
Proposing an innovative10 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
investing in research to produce cheaper versions of existing technology
being the first to market a competing technology
adapting rapidly to a technological standard previously11 set by a competing firm
establishing technological leadership in order to shape product definitions in advance of competing firms.
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?
VCR's in the VHS format were technically better than competing-format VCR's.
VCR's in the VHS format were less expensive than competing-format VCR's.
VHS was the first standard format for VCR's.
VHS prerecorded videotapes were more available than Beta-format tapes.
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
carefully restricting access to VCR technology
giving up a slight early lead in VCR sales in order to improve long-term prospects12.
retaining a strict monopoly on the production of prerecorded videotapes.
sharing control of the marketing13 of VHS-format VCR's
sacrificing technological superiority over Betaformat VCR's in order to remain competitive in price.
5. The alignment6 of producers of VHS-format VCR's with producers of prerecorded videotapes is most similar to which of the following?
The alignment of an automobile14 manufacturer with another automobile manufacturer to adopt a standard design for automobile engines.
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
The alignment of an automobile manufacturer with a petroleum15 company to ensure the widespread availability of the fuel required by a new type of engine developed by the manufacturer.
The alignment of an automobile manufacturer with its dealers17 to adopt a plan to improve automobile design.
The alignment of an automobile dealer16 with an automobile rental18 chain to adopt a strategy for an advertising19 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?
It makes a general observation to be exemplified.
It outlines a process to be analyzed20.
It poses a question to be answered.
It advances an argument to be disputed.
It introduces conflicting arguments to be reconciled
