Chapter 7 SM

According to crossing-the-chasm framework, the largest difference in consumer expectations is between ________.

early adopters and the early majority

A significant difference between technology enthusiasts and early adopters is that __________.

early adopters are interested in how a new technology will improve their lives, rather than in the details of the technology itself.

How are the early majority and late majority different in their attitudes toward technology?

The early majority is confident in their ability to master the new technology; the late majority is not.

Which of the following are ways in which standards can emerge?

By being imposed by government or other agencies. Through Market Competition

The _______ identifies how industries tend to develop and change over time.

Industry life cycle

Which of the following statements about the industry life cycle is true?

Only a few large firms remain

Innovation can _____________.

Provide firms with a competitive advantage Make existing products or businesses obsolete

The development of most industries follows a(n) ____________.

S-curve

Which two customer segments make up the largest percentage of the market potential?

The early and late majority

While the industry for Ultra-High Definition televisions is in the introduction stage, the industry for LCD televisions is in the maturity stage. What does this imply?

The market for LCD televisions has reached its maximum size, whereas the market for Ultra-High definition televisions is still small in size.

According to the crossing-the-chasm framework, a firm's transition between the different parts of the industry life cycle is difficult because

There is a big gulf separating the early adopters from customer segments that make up the mass market

Which of the following are characteristics of the early majority?

They weight benefits and costs carefully They rely on reviews by reputable magazines They have a strong sense of practicality

True or false: Innovation can create value for one firm while destroying value for another.

True

An innovation that targets a new market with existing technologies is called ___________ innovation

architectural

*During the decline stage of the industry life cycle product innovation efforts __________.

come to a halt

The four strategic options that managers have in the decline stage are: exist, harvest, maintain, or

consolidate

Japanese carmakers first introduced small fuel-efficient cars and then leveraged their low-cost and high-quality advantages into high-end luxury segments, dominated by brands such as Lexus, Infiniti, and Acura. This initiative best illustrates a(n)

disruptive innovation

During which stage does a standard develop?

growth

The stage during which a new product has gained some acceptance, thus causing first-time buyers to eagerly acquire the product and accelerate demand, is the __________ stage.

growth

The customer segment known as the early majority tends to enter the market __________.

in large numbers

Which type of innovation applies to existing markets and existing technologies?

incremental

Creating new products out of new or existing ideas is known as _________.

invention

Most firms consider laggards to be ________.

not worth the effort of pursuing

Because it targeted a new market and used new technologies, the first mass-produced automobile is considered an __________ innovation.

radical

If a pharmaceutical company develops a first-of-its-kind vaccine to prevent HIV/AIDS and thus creates a whole new market for the product (non-infected civilians), it would be a(n)

radical Innovation

In which stage of the industry life cycle does competition become more intense, forcing weaker firms out of the industry?

shakeout

Cantaloupe Technologies follows a business model in which the performance of the company is not only based on how much profits were generated, but also on how the community in general benefited from its operations. Thus, the company under its "Plant a Life" campaign promises to plant a tree with every customer purchase. Which of the following terms best describes the performance valuation model of Cantaloupe Technologies?

social entrepreneurship

An agreed upon solution about a common set of engineering features and design choices is known as a _________.

standard

The fundamental question of ____________ is how to combine entrepreneurship with the concepts of strategic management in order to achieve a competitive advantage.

strategic entrepreneurship

Which is the most common customer segment in the introductory stage of the industry life cycle?

technology enthusiasts

The four step innovation process starts with _________.

An idea

Bela is a marketing and sales employee at Hopscotch Foods Inc. She has invented a new way to process and pack the company's food products that would avoid the usage of chemical preservatives. Which of the following terms best describes Bela?

An inrapreneur

It is challenging for firms to "cross the chasm" because _______.

Each stage of the industry life cycle features a different group of customers with different preferences and demands.

Julius bought his laptop and smartphone when these products had just entered their respective growth stages. More than the technological sophistication of these products, it was the idea that these products would allow him to multitask and work when traveling that drove him to make his purchase decision. Which of the following customer segments does Julius best represent?

Early Adopters

Because Lorraine wants to introduce innovative new production processes to the local restaurant industry, she is considered an ________.

Entrepreneur

The process in which change agents create new products or processes at significant economic risk is known as _____________.

Entrepreneurship

Increases in the value of a product or service that result from a corresponding increase in the number of users are known as ____________.

Network effects

In developed countries, the industry for flash drives is in the maturity stage, and the industry for floppy disks is in the decline stage. What does this imply?

While the flash drive industry has reached its maximum market size, the market size for floppy disks is small and contracting.

While the industry for tablet computers is in the growth stage, the laptop industry is in its shakeout stage. What does this imply?

While the market demand for tablets will be high, the demand for laptops will be limited.