Strategic Management Chapter 7

Which of the following are stages of the industry life cycle? (Check all that apply.)

- growth - introduction - shakeout - decline - maturity

Demand declines most rapidly in the ______ stage of the industry life cycle.

decline

In the ______ stage of the industry life cycle, falling demand leads to a reduction in market size.

decline

Taking on an economic risk in order to innovate is known as ______.

entrepreneurship

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

entrepreneurship

At which stage of the industry life cycle does the size of the market expand rapidly?

growth

The most common type of innovation is ______ innovation.

incremental

When a company introduces a new product or process or business model with the intent of gaining a competitive advantage, that company is engaging in ______.

innovation

Which statement describes the long tail?

A large amount of revenue derived from a small number of units among almost unlimited choices

Which of the following statements about platform business is true?

It creates value not only for the businesses but also for consumers.

Which statement best describes the speed of innovation over the past hundred years?

It has accelerated dramatically.

Which of the following statements about a business pipeline is true?

It is the traditional system of horizontal business organization.

During the shakeout stage of the industry life cycle, profits degrade for ______.

all but the most efficient firms

The invention of small desktop copiers to create a new consumer market using the same technology as large, stand-alone copiers is an example of a(n) ______ innovation.

architectural

Successfully transitioning from one stage of the industry life cycle to the next is referred to as ______.

crossing the chasm

Which of the following statements about platform businesses is true?

They can grow faster than pipeline businesses.

Which of the following are types of innovation? (Check all that apply.)

- architectural - disruptive - radical - incremental

What question is asked along the horizontal axis of the markets-and-technology framework?

Does the innovation build on existing technologies or create new ones?

Using known components, based on existing technologies, in a new configuration to create a new market is known as ______.

architectural innovation

The negative effect of innovative ride-sharing services, such as Uber and Lyft, on traditional taxi cab companies is an example of ______.

creative destruction

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 type of innovation that focuses on improving an existing product by using existing technology and targeting existing markets is a(n) ______ innovation.

incremental

Which of the following is a primary factor in avoiding creative destruction?

innovation

In the ______ stage of the industry life cycle, a few number of large firms compete for a share of a market that has reached its maximum size.

maturity

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

The business structure that is linear and has producers at one end and consumers at the other is known as a(n) ______.

pipeline

An enterprise that creates value by matching external producers and consumers in a way that creates value for all participants and that depends on the infrastructure that the platform manages is a(n) ______.

platform business

A firm that successfully leverages network effects can ___.

push its industry into the growth stage

Benny's Baos had an edge in the market, but other companies began to enter the market. Benny is now losing customers even though he has launched an aggressive marketing campaign in an attempt to attract customers. Benny's Baos is likely in the ______ stage of the industry life cycle.

shakeout

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

shakeout

Simone was the first among her peers to try the new unicorn hair dye. For months she was the only person with unicorn hair. After some time, though, the product became available everywhere, and nearly every other person began sporting unicorn hair, even Simone's mom. This situation describes which of the following?

the crossing-the-chasm framework

Place the four steps of the innovation process in order from first to last. (From top to bottom)

- idea - invention - innovation - imitation

True or false: Platform businesses are organized as traditional linear pipelines.

False

What is the relationship between innovation and competitive advantage?

Innovation is a powerful weapon for gaining and maintaining competitive advantage.

Which are the four steps of the innovation process?

- imitation - idea - invention - innovation

Which of the following are advantages of platform businesses compared to pipeline businesses? (Check all that apply.)

- They unlock new sources of value creation and supply. - They scale efficiently by eliminating gatekeepers. - They benefit from community feedback.

Innovation can ______. (Select all that apply.)

- make existing products or businesses obsolete - provide firms with a competitive advantage

True or false: Industries often tend to follow a predictable industry life cycle.

True

A business model in which companies can obtain a large part of their revenues by selling a small number of units from among almost unlimited choice is referred to as _____.

the long tail