MGMT 434 Chapter 7

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

According to the crossing-the-chasm framework, a firm's transition between the different parts of the industry life cycle is difficult because A. the number and size of competitors change throughout the industry life cycle. B. the firm tends to follow a predictable industry life cycle. C. there are frequent changes in the supply and demand sides of the market throughout the industry life cycle. D. there is a big gulf separating the early adopters from customer segments that make up the mass market.

an intrapreneur

Arnold is a marketing and sales employee at Vibgyor Foods Inc. He 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 Arnold? A. a category captain B. an intrapreneur C. a venture capitalist D. a franchised dealer

social entrepreneurship

DigiLife Electronics Inc. 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 business model of DigiLife Electronics? A. crowdsourcing B. social entrepreneurship C. offshoring D. corporate intrapreneurship

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

How are the early majority and late majority different in their attitudes toward technology? A. The early majority is very concerned with what new technology can do for them; the late majority is not. B. The early majority is confident in their ability to master the new technology; the late majority is not. C. The early majority is concerned that many new technologies will fade away; the late majority is not. D. The early majority is strongly influenced by the endorsements of others; the late majority is not.

radical innovation

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 (noninfected civilians), it would be a(n) A. radical innovation. B. Incremental innovation. C. disruptive innovation. D. architectural innovation.

growth stage

In a typical industry life cycle, an industry immediately moves to the _______ after the introduction stage. A. maturity stage B. growth stage C. shakeout stage D. decline stage

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

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? A. While the flash drive industry has reached its maximum market size, the market size for floppy disks is small and contracting. B. The industry structure for floppy disks is that of perfect competition, whereas the industry structure for flash drives is monopolistically competitive. C. The number of new entrants in the floppy disks industry will be more when compared to the industry for flash drives. D. While the buyers of floppy disks can be categorized under early majority, the customers of flash drives can be categorized under late majority.

invention is commercialized by entrepreneurs

In the third step of the innovation process, a(n) A. invention is imitated by competitors. B. new idea is presented in terms of abstract concepts. C. new idea is expressed as findings derived from basic research. D. invention is commercialized by entrepreneurs.

disruptive innovation

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) A. disruptive innovation. B. incremental innovation. C. radical innovation. D. progressive innovation.

early adopters

Omar 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 Omar best represent? A. technology enthusiasts B. early adopters C. late majority D. laggards

open business model

SmartWork Inc. produces popular electronic devices, such as notebook computers. For the design of their products, this firm used ideas generated in-house and from university professors. Both sources of ideas created significant value. Even though SmartWork was not the first to think of all the ideas they used, they became the first to successfully commercialize these ideas. Also, SmartWork has been known to buy intellectual property when doing so suits their needs. This scenario describes a(n) A. closed business model. B. open business model. C. long tail business model. D. razor—razor-blade business model.

They will have to find distribution channels and complementary assets

Which of the following is a disadvantage faced by first movers in an industry? A. They will have no access to intellectual properties such as critical patents. B. They cannot benefit much from network effects. C. They cannot benefit from learning and experience curve effects like the late entrants. D. They will have to find distribution channels and complementary assets.

A patent over a product translates into a permanent monopoly positioN

Which of the following statements about patents is not true? A. A patent over a product translates into a permanent monopoly position. B. A patent can be enforced in court. C. A patent is a form of intellectual property. D. A patent can be obtained when an invention is useful, novel, and nonobvious.

The prices begin to fall during this stage when compared to the introduction stage

Which of the following statements is true of the growth stage in the industry life cycle? A. The objective of firms during this stage is to pursue a harvest strategy. B. The prices begin to fall during this stage when compared to the introduction stage. C. The type of buyers during this stage consists of the late majority. D. The basis of competition tends to move away from process innovations toward product innovations.

They appreciate new technology that can add value to their personal and professional lives

Which of the following statements is typically true of early adopters? A. They enter the market in the maturity stage of the industry life cycle. B. They appreciate new technology that can add value to their personal and professional lives. C. They make up the mass market together with the technology enthusiasts. D. They enjoy using beta versions of products and providing free suggestions to companies.

The market for LCD televisions has reached its maximum size, whereas the market for 3-D televisions is still small in size

While the industry for 3-D televisions is in the introduction stage, the industry for LCD televisions is in the maturity stage. What does this imply? A. The market for LCD televisions has reached its maximum size, whereas the market for 3-D televisions is still small in size. B. The 3-D television industry will focus on process innovation, whereas the LCD television industry will focus on product innovation. C. The LCD television industry is likely to focus on achieving market acceptance, while the 3-D television industry is likely to focus on the harvest strategy. D. The 3-D television industry will focus on pursuing an integration strategy, while the LCD television industry will focus on pursuing a differentiation strategy.

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

While the industry for tablet computers is in the growth stage, the laptop industry is in its shakeout stage. What does this imply? A. The tablet industry is ahead of the laptop industry in the industry life cycle. B. While the market demand for tablets will be high, the demand for laptops will be limited. C. The number of competitors entering the laptop industry will be more than those entering the tablet computers industry. D. While competition for the tablet industry is primarily based on price, it is not so for the laptop industry.

Entrepreneurship

_______ is best described as the process by which people undertake economic risk to innovate—to create new products, processes, and sometimes new organizations. A. Crowdsourcing B. Headhunting C. Cannibalization D. Entrepreneurship

Invention

__________ is best described as the process of transformation of an idea into a new product or process, or the modification and recombination of existing ones. A. Invention B. Direct imitation C. Bootstrapping D. Lean manufacturing

Absorptive capacity

______________ is best described as a firm's ability to understand external technology developments, evaluate them, and integrate them into current products or create new ones. A. Minimum efficient scale B. Technical efficiency C. Market liquidity D. Absorptive capacity