3360 1
Financial perspective
-Net cash flow, return on capital, and earnings growth -To meet shareholder's expectations and to double corporate value in seven years
True Statement about first movers in the market
-They usually bear the bulk of the research and development expenses for their product or service technologies. -They are often required to pay to develop suppliers and distribution channels, plus consumer awareness.
Which of the following statements is true of a component innovation?
A component innovation does not significantly affect the overall configuration of a system.
Globalization of markets has reduced the importance of innovation.
False
true statement about user innovators.
They create the innovation for their own utilization.
For a firm to adopt a component innovation, it requires architectural knowledge about the way components link and integrates to form a whole system. T/F
fALSE
A loosely coupled structure is best suited for activities that involve exchange of tacit knowledge.
false
A radical innovation differs from an incremental innovation in that it refers to an innovation that:
is very new and different from prior solutions.
Who among the following is a user innovator?
Sandra, an engineer, has developed a device that helps track the location of her teenage daughter's car.
Many start-up firms fail because new innovations tend to be adopted very slowly at first.
true
If the net present value of a project is greater than zero, then the:
project generates wealth.
Information that belongs to a firm is typically considered to be a trade secret only if it _____.
provides the firm with a distinctive advantage in the form of economic rents
In the words of Anderson and Tushman, the rise of a dominant product design indicates _____.
the transition from the era of ferment to the era of incremental change
Earth Love Electronics Inc. has developed a lawn mower that runs on solar power. The lawn mowers are available in all local supermarkets and home appliances stores. Customers can also check out videos and product details and then order a lawn mower on the company's home page. According to the Buyer Utility Map, which of the following primary new value propositions is being offered by the company?
Convenience utility in the purchase stage
Which of the following statements is true of standardization?
It can ensure that activities within a firm run smoothly and yield predictable outcomes.
The ability of a firm to determine the structure and operation of a technology and its compatibility with other goods and services is known as (blanl) (ba;)`
Blank 1: architectural Blank 2: control
Identify the utility levers that are considered by W. Chan Kim and Renee Mauborgne in their "Buyer Utility Map." (Check all that apply.)
Convenience Simplicity Risk Reduction Fun & Image Customer Productivity Environmental Friendliness
_____ is the ability of an organization to recognize, assimilate, and utilize new knowledge.
Absorptive capacity
In the context of the threat of potential entrants to an industry, which of the following are examples of entry barriers?
Brand loyalty and government regulation Large start-up costs
refers to activities that apply knowledge to produce useful devices, materials, or processes.
Development
Which of the following statements is true of contract manufacturing?
It enables a firm to tap the greater economies of scale.
Capability complementation
Pooling the capabilities and other resources of partner firms, but not necessarily moving those resources between the partners Pooling the capabilities and other resources of partner firms, but not necessarily moving those resources between the partners
_____ are not typically patentable, but they can be protected by copyright.
Printed materials
A marketing research company categorized Jane as an early adopter. Which of the following would be true of Jane in this context?
She is well integrated into her social system.
An incremental innovation
The innovation might not be particularly new or exceptional, and it might have been previously known to the firm or industry. Innovations that make a relatively minor change from (or adjustment to) existing practices
The amount of effort invested in the technology decreases or increases over time.
The resulting curve could appear to flatten much more quickly, or not flatten at all.
A tightly integrated (i.e., nonmodular) product system
The producer possesses more control over the end product, which helps to better monitor quality and reliability.
Scripts & Scrolls Corp. supplies printing paper to select publishing houses. When its customers asked for a discount in the cost of supplies, the company had to oblige fearing that the customers might withdraw pending contracts. This shows the increased:
bargaining power of buyers.
When demand is increasing, there is less revenue to go around and firms will experience more competitive pressure.
false
T/F A discontinuous innovation is when it fulfills a similar market need, but does so by building on an entirely new knowledge base.
true
True or false: It is possible for liberal diffusion of a firm's technology to result in the fragmentation of the technology platform.
true
Service
After-sales activities needed to keep products or services working effectively
Unicorn Medicines Inc., a pharmaceutical company based in the United States, has its research and development units spread across the globe. Lately, these research and development units have not been receiving adequate financial support. Which of the following is most likely to cause such a situation?
Most innovative ideas do not become successful new products.
The firm can threaten to forward vertically integrate.
The buyer's bargaining power will be reduced.
The product is undifferentiated.
The buyers will have greater bargaining power.
The product is highly differentiated.
The buyers will have less bargaining power.
Solo internal development is, on average, a relatively fast and inexpensive way of developing a technology.
false
True or false: A market can never become competitive if entry barriers are low.
false
tacit knowledge
knowledge that cannot be codified; (documented in written form)
The innovation process is often conceived of as a funnel because:
there are many potential new product ideas and only a few make it through the development process.
According to Porter's five-force model, the degree to which a firm relies on one or a few suppliers will influence its ability to negotiate good terms.
true
After licensing a technology, a firm typically has limited discretion over what it can do with the technology.
true
In the context of outsourcing, the process of a firm hiring another firm (often a specialized manufacturer) to manufacture its products is known as (blank)(blank)
Blank 1: contract Blank 2: manufacturing
_____ are regional groups of firms that have a connection to a common technology and may engage in buyer, supplier, and complementor relationships, as well as research collaboration.
Technology clusters
Which of the following are most often represented by technology trajectories? (Check all that apply.)
The technology's rate of adoption in the marketplace The rate of performance improvement of the technology
Identify the true statements about technological spillovers.
They are an important influence on innovative activity according to evidence. Their likelihood is a function of the nature of the underlying knowledge base and the mobility of the labor pool.
An alliance contract
It contains information about what each partner is obligated to contribute to the collaboration, including money, services, equipment, intellectual property, and so on.
Which of the following is the correct sequence of steps for the science-push approach to research and development?
Scientific discovery leads to an invention, the engineering team designs the product, it is then manufactured, and finally the marketing team promotes it.
Abilities that make a firm more agile and responsive to change are known as
dynamic abilities
Marine Systems was the first company to develop an inventory management software specifically for hotels and restaurants. Soon after Marine Systems launched its product, Unicorn Systems developed a similar software. The software developed by Unicorn Systems outperformed the one developed by Marine Systems, and it eventually became the market leader. In this scenario, Unicorn Systems is an example of a(n) _____.
early follower
Mr. Crunchy Inc. is a firm experiencing severe losses. However, with large initial investment in manufacturing equipment and infrastructure, the firm is finding it difficult to abandon the industry. According to Porter's five-force model, the company is facing a(n):
exit barrier
The phenomenon in which firms accumulate knowledge that helps increase their future ability to assimilate information is referred to as learning trajectory.
f
Joint ventures offer low potential for leveraging a firm's existing competencies because they typically entail a short-term relationship between two or more firms.
fale
A firm cannot collaborate with its competitor.
false
Doven Inc. pioneered software development in the 1970s and introduced its range of office tools well ahead of its competitors. According to the classification scheme of entrants, Doven would be classified as a(n) _____.
first mover
Urban Fashions Corp. has become very successful in the last few years and now employs a large number of people. Serena, the owner of the firm, had been very informal in running the company. However, because of the increase in the size of the firm, she now feels that the informal ways of management have become ineffective. In order to structure the behavior of employees, Serena wants to introduce written codes of conduct and regulations into the firm. This change being introduced in the company by Serena is referred to as _____.
formalization
Allure Fabrics Corp. supplies cotton, linen, and silk fabrics to various designer wear boutiques in and around Florida. The firm has recently launched a boutique in Florida under its own brand name to sell women's fashion apparel. Allure Fabrics is practicing:
forward vertical integration.
Since much innovation arises from experimentation and improvisation, the _____ organization structure is typically considered better suited for innovation despite its possible detriment to efficiency.
organic
If a business builds a park in a community, it will create a(n) _____ for the community members.
positive externality
Inbound logistics
receiving, storing, and disseminating inputs to the products
A firm that invests heavily in derivative projects that may be immediately commercialized with little risk:
will likely be unable to compete when the market shifts to a newer technology.
In the context of technology cycles, Schumpeter argued that _____ was the key driver of progress in a capitalist society.
creative destruction
An architectural innovation
An innovation that changes the overall design of a system or the way its components interact with each other
Some firms avoid collaboration for fear of giving up their proprietary technologies.
true
Socially complex knowledge
Knowledge that arises from the interaction of multiple individuals
complex knowledge
Knowledge that has many underlying components, or many interdependencies between those components, or both
Which of the following is an advantage of being a late entrant into a market?
Late entrants often do not have to invest in exploratory research.
Which of the following directly influence the threat of potential movers to an industry? (Check all that apply.)
The degree to which the industry is likely to attract new entrants The height of entry barriers
Nick works at a digital appliances manufacturing company. Recently, he invented an adapter for televisions, which when connected would reduce the electricity consumption by half. This adapter worked with the earlier television models that the company manufactured, so the company was able to sell this product to their existing customers and to all their new customers. This is an example of a(n) _____ innovation.
componentt
Products that are not actually on the market and may not even exist but are advertised are referred to as _____.
vaporware
_____ refer to the costs (or benefits) of technological innovations that are borne by individuals other than those responsible for creating them.
Externalities
The switch from steam trains to electric trains most likely illustrates the concept of _____.
discontinuous technologies
According to Anderson and Tushman, in the era of incremental change, firms _____.
focus on efficiency and market penetration
Any entity that has an interest in an organization is known as a _____.Any entity that has an interest in an organization is known as a _____.
stakeholder
The spread of a technology through a population is known as
technology diffusion
Product life cycles shorten with high-speed technological changes.
true
Which of the following statements is true of conjoint analysis?
It is most commonly used to assess the relative importance to customers of different product attributes.
Technological abilities
Applied science and process design
_____ are goods or services that are not viewed as competitors, but fulfill a strategically equivalent role for the customer.
Substitutes
Which of the following is a treaty that governs the System of International Registration of Marks?
The Madrid Protocol
Suppliers are very abundant and/or are not highly differentiated.
A firm may be able to compel the suppliers to bid against one another for the sale.
Design Patent
It is applicable to an original and ornamental schema of a manufactured item.
Customer perspective
Market share and percentage of repeat purchases -To improve buyers' loyalty and to increase buyers' satisfaction
True or false: In real options, the assets underlying the value of a stock option are financial resources of a firm.
False
Which of the following is a feature of a joint venture that differentiates it from other forms of alliances?
It involves a significant equity stake by the partners.
In which of the following circumstances can a firm confidently enter the market at any time?
When the product requires new complementary goods
The customization of products and processes to a local market makes them particularly difficult to transfer to divisions serving different markets.
trye
Which of the following companies uses the most familiar method of tapping the creativity of its individual employees?
A company that adopts a suggestion box program
Which of the following companies most likely produces both a good and its complements?
A company that produces computers and operating systems
Which of the following is an advantage of using the real options approach of evaluating a project?
A. It results in better technology investment decisions than a cash flow analysis approach.
Human resource management
Activities like recruiting, hiring, training, and compensating a firm's personnel
Technology development
Activities that are part of developing and managing equipment, hardware, software, procedures, and knowledge necessary to transform inputs into outputs
Marketing and sales
Activities to let buyers know about products and services and to induce their purchase
Which of the following would be an example of a tacit resource?
An oddsmaker who works for a large casino in Las Vegas and is correct 95 percent of the time
How do first movers in a newly emerging market primarily shape customer preferences?
By establishing the precedent for product design in the market By investing in educating the users of a product
A firm expects the cash inflows from a development project in perpetuity. Which of the following formulas can the firm use to calculate the perpetuity present value of C dollars per period with discount rate r?
C × 1/r
_____ refers to the allocation of a finite quantity of resources over different possible uses.
Capital Rationing
Producers of complementary goods or services are known as
Complementors
Which of the following statements is true of customer preferences?
Customers can differ from producers in their understanding of a new technology.
Breaking Ventures Inc. realized that most parents are worried about their teenage children going out on their own. Based on this information, the company developed a device that could be fixed into teenagers' cell phones through which parents could keep track of their children's location. This is referred to as the _____ to research and development.
Demand-Pull Apporach
Capability transfer
Exchange of capabilities across firms in such a manner that partners can internalize the capabilities and use them independently of the particular development project
Which of the following statements is true of externalities?
Externalities can be in the form of benefits reaped by individuals other than those who created them.
A legally induced adherence to a dominant design is not possible.
F
A technology diffusion curve is s-shaped because adoption is initially fast when a new technology is introduced to the market.
F
In the context of s-curves in technological improvement, performance improvement in the early stages of a technology is rapid, irrespective of how well the fundamentals of the technology are understood.
F
Gross domestic product seldom relates to the amount of goods consumers can purchase.
False
Incubators are regional districts, typically set up by government, to foster R&D collaboration between government, universities, and private firms.
False
Innovation and new technologies have led to longer product life cycles and slower product obsolescence.
False
Research targeted at increasing knowledge for a specific application or need is called basic research.
False
Technological innovation decreases the amount of output achievable from a given quantity of labor and capital.
False
Technological innovation results in the complete eradication of negative externalities.
False
The allocation of a finite quantity of resources over different possible uses is known as research rationing.
False
The degree to which innovative activities are geographically clustered is independent of the national differences in the way technology development is funded or protected.
False
The innovation process is often conceived of as a funnel because most potential new product ideas make it through the development process.
False
The majority of effort and money invested in technological innovation comes from nonindustrial firms.
False
Information that belongs to a business that is held private is known as a(n)
Blank 1: trade Blank 2: secret
Knowledge that is explicit requires more frequent and close interaction to be meaningfully exchanged than knowledge that is tacit.
False
In the industrial context, the practical implementation of an idea into a new device or process is known as _____.
Innovation
Utility Patent
It is applicable to a new and useful process, machine, manufactured item, or combination of materials.
In the context of the modes of firms' collaboration, which of the following is, on average, a relatively slow and expensive way of developing a technology?
Solo internal development
Procurement
The acquisition of inputs, but not their physical transfer
Socially complex
The resources arise through the complicated interaction of multiple people.
Tacit
The resources cannot be easily codified in written form.
Organizations that develop new technologies before others do
They may have an advantage in staying ahead of their competitors.
Which of the following firms is most likely to bear the bulk of the expense and risk of developing and introducing a new innovation to the market?
a firm that is a first mover
Organizations that manufacture products such as light bulbs for lamps or chargers for electrical vehicles are called _____.
complementors
The degree to which a system's components can be separated and recombined is called _____.
modularity
The investor is an active driver of the value of an investment.
true
The pooling of supplementary resources can enable partners to achieve market power or economies of scale.
true
In an organizational context, which of the following statements is true about the demand-pull model of research and development?
It argued that innovation was driven by the perceived needs of potential users.
In the context of creative thinking, identify the true statements about primary process thinking. (Check all that apply.)
It can lead to combining ideas that are not ideally related, resulting in remote associations or divergent thinking. It is the process of engaging in a visual mental activity.
Identify the true statements about a strategic alliance between two or more firms. (Check all that apply.)
It is allowed to be a long-term or a short-term agreement. It can involve an equity investment made by the partners in each other.
A patent A trademark A copyright
It protects an invention. It protects words or symbols intended to distinguish the source of a good. It protects an original artistic or literary work.
Identify the true statements about the Berne Union for the Protection of Literary and Artistic Property, or the Berne Convention, which is an international copyright treaty. (Check all that apply.)
It states a minimum level of copyright protection for all member countries. It requires member countries to provide the same protection to both its own citizens and foreign nationals.
Which of the following statements are true about a firm's strategic intent? (Check all that apply.)
It typically draws from all levels of the firm. It builds upon and extends the firm's existing core competencies.
Virtual Inc., a manufacturing company, has recently entered the cell phone industry. This industry is characterized by rapid technological innovations. Which of the following is most likely to be true of Virtual Inc.?
It will face rapid product obsolescence.
The R&D team of Zelda Technozone Inc. has developed a prototype for a two-seater car that runs primarily on solar energy. Since the firm usually manufactures household appliances, the management acknowledges that it does not have the required competencies to manufacture this car on a large scale. It decides to access another firm's manufacturing competencies. Which of the following collaborative arrangements is most appropriate in this scenario?
Joint venture
The initial investment for a firm's development project is $3,000. The accumulated discounted cash flows from the project are $900 for the first year, $1,900 for the second year, $2,500 for the third year, and $3,300 for the fourth year. Based on the given data, calculate the approximate discounted payback period.
Just over three years and seven months
In declining industries, high exit barriers can strengthen rivalry by making firms reluctant to abandon the industry. Which of the following are examples of exit barriers? (Check all that apply.)
Large fixed-asset investments Emotional commitment to the industry
Neon Electronics Inc. is an electronics manufacturing company. It has adopted a dominant design for its television audio speakers. Which of the following statements is most likely to be true in this scenario?
Neon Electronics will have increased opportunities to develop complementary assets.
What is the personality trait most often associated with creativity?
Openness to experience
Identify the true statements about the rules regarding publication of information about an invention before applying for a patent. (Check all that apply.)
Publishing the information will prevent the right to a patent in most countries. The inventor can publish the information up to a year before applying for the patent in the United States.
Liam, an employee of Centaurs Inc., is part of a new product development team that operates in a completely different manner from its parent organization. Within the team, there is considerable decentralization of authority and limited bureaucracy. It also has its own unique culture. Liam's team can be most accurately referred to as:
SKUNK WORKS
In 2001, Shanghai's municipal government set aside 13 square kilometers of land near the Huangpu River for university laboratories and start-up firms in microelectronics, digital technology, and life sciences. The project aimed to foster research in microelectronics, the development of a technologically advanced labor pool, and the creation of new industries in Shanghai. This project would be best termed a _____.
Science Park
Backward vertical integration
Selnor Inc. starts producing its own supplies.
The influence of a dominant design can extend beyond its own technology cycle.
T
When a technology's performance is plotted against the amount of effort and money invested in the technology, it typically shows slow initial improvement, then accelerated improvement, then diminishing improvement.
TURE
Which of the following is true of technological innovations?
Technological innovations help increase a country's gross domestic product.
Regional clusters of firms that have a connection to a common technology and may engage in buyer, supplier, and complementor relationships, as well as research collaboration, are known as
Technology Clusters
Which of the following are international copyright treaties that simplify the process of securing copyright protection? (Check all that apply.)
The Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations The Brussels Convention Relating to the Distribution of Program-Carrying Signals Transmitted by Satellite
Assessing a particular organization's external environment
The analysis concentrates on the industry level, treating all competitors as roughly the same.
What should a firm do if the value of its technology to users is influenced by complementary goods? (Check all that apply.)
The firm must be able to sponsor the production of the complements by other firms. The firm must be capable of producing the complements in sufficient range and quantity.
Which of the following characteristics of a firm's knowledge base typically are very difficult for competitors to duplicate? (Check all that apply.)
The knowledge base cannot be readily codified into documents or procedures. The knowledge base is socially complex.
Which of the following statements is true of ambidextrous organizations?
They have a complex organizational form that is composed of multiple internally inconsistent architectures.
Which of the following is an advantage of flexible manufacturing technologies?
They have shorter production runs economical
Manufacturers
They usually create new product innovations to profit from the sale of the innovation to customers. They usually create new product innovations to profit from the sale of the innovation to customers.
The terms "research" and "development" represent different kinds of investment in innovation-related activities.
True
The CEO of a pharmaceutical company asked his consultant if it was a good idea to implement the s-curve model to predict when a technology would reach its limits. The consultant identified a limitation in the use of the model. Which of the following is most likely the limitation identified by the consultant?
Unexpected changes in the market can alter the shape of a technology's s-curve.
fluid phase
When there is considerable uncertainty about the technology and its market; firms experiment with different product designs in this phase
Since larger companies tend to have more bureaucracy, fixed costs, and commitments to large numbers of employees, customers, and suppliers than smaller firms, you can expect it to _____.
be less responsive to technological changes
As firms develop complementary technologies to improve the productivity or ease of utilization of a core technology, the core technology:
becomes more attractive to other firms.
Products or services that enhance the usefulness or desirability of another product are known as _____.
complements
Jack took part in a survey in which he was asked to rank the importance of certain features of the smart television he had recently purchased. The result was then used by the surveying firm to assess the different attributes of the ranking. This survey would most accurately be termed a _____.
conjoint analysis
S-curves in technology diffusion are obtained by plotting the:
cumulative number of adopters of a technology against time.
S-curves in technology diffusion are obtained by plotting the _____.
cumulative number of adopters of the technology against time
Computer hardware has developed over the years with recent devices providing better and higher storage capacities. From the use of floppy disks, in the early days, for storing information, to the current use of CDs, portable hard disks, and pen drives, information storage capacities have improved with the invention of each new device. These days, floppy disks are seldom used and most of the latest computers do not include floppy drives. Which of the following types of technology is being described in the scenario?
discountious
In the context of Utterback and Abernathy's technology evolution model, a product design that is adopted by the majority of producers, typically creating a stable architecture on which the industry can focus its efforts, is known as a(n)
dominant design
Reusing the components of a modular product in different combinations helps achieve product variety while still allowing scale economies in manufacturing the individual components. This is called _____.
economies of substitution
t/F Product innovations are more important than process innovations to organizations because they are less visible than process innovations.
false
Oxygenic Inc. is a company with major decentralized divisions in Germany, Russia, and the United States. The scientists in Russia develop cancer treatment methods. Treatment clinics are organized in Germany. The U.S. division gathers finance and markets the treatment methods. The activities of the different divisions are coordinated by the central office of the firm to meet company-wide objectives. This is most clearly an example of a _____ strategy.
globally linked
Institutions designed to nurture the development of new businesses that might otherwise lack access to adequate funding or advice are called _____.
incubators
The tendency of existing firms to be slow to respond to changes in the industry environment due to their large size, established routines, or prior strategic commitments to existing suppliers and customers is known as:
incumbent inertia
The number of users of a particular technology is referred to as its (blank) (blank)
installed Blank 2: base
Allured Architecture Inc. collaborated with Maze & Matiz Corp. to form a new architecture firm called AllureAmaze Inc. Both the firms had a significant equity stake in the new entity. This collaboration would most accurately be termed a(n) _____.
joint venture
Allured Cosmetics Corp. enters into a contractual agreement with Pure Cosmetics Inc., a manufacturing firm in the West Coast. According to the contract, Pure Cosmetics can use the manufacturing processes of Allured Cosmetics to produce cosmetics in return for a specific fee. Pure Cosmetics is bound to use the manufacturing process only to make complementary products for the cosmetics manufactured by Allured Cosmetics. This collaborative arrangement is classified as _____.
licensing
According to Schoonhoven and Jelinek, quasiformal structures are:
not formally indicated on the organizational chart.
The installed base of a particular operating system refers to the _____.
number of users of the operating system
Microsoft licenses firms that assemble goods using components made by other manufacturers to distribute Windows by bundling it with hardware. Such firms are known as _____.
original equipment manufacturers (OEMs)
In industries with complex technologies, dense webs of overlapping patents can make it very difficult for firms to compete without falling prey to patent suits by other firms in that technology domain. These dense webs are referred to as (blabk) (blank) 0
patent thickets
Increasing returns to adoption imply that technology trajectories are characterized by _____, meaning that relatively small historical events may have a great impact on the final outcome.
path dependency
As a result of the rapid pace of innovation:
product life cycles have become short.
Factors that make it difficult or expensive to change suppliers or buyers are referred to as _____.
switching costs
According to Porter's five-force model, if suppliers of a particular good are very abundant, _____.
their bargaining power will be less
If a country's GDP stands at $4,867 billion, the country's _____ will be worth $4,867 billion.
total annual output
A center-for-global approach tends to be very responsive to the diverse demands of different markets.
true
A firm's emphasis on a scientific discipline that is central to its core competency can make the firm less attractive to individuals from other disciplines.
true
A high degree of formalization and standardization in firms results in organic structures.
true
According to Prahalad and Hamel's model, it is possible for a firm to develop core competencies to a set of abilities that enable it to quickly reconfigure its organizational structure and routines in response to new opportunities.
true
All pioneers face customer uncertainty.
true
An innovation can be competence enhancing for one firm, while competence destroying for another. T/F
true
Equity ownership helps to align the incentives of the partners and provides a sense of ownership and commitment to the project that can facilitate supervision and monitoring of the alliance.
true
Firms that enter the market early can preemptively capture scarce resources such as key locations, government permits, patents, access to distribution channels, and relationships with suppliers.
true
Formulating a technological innovation strategy first requires an accurate appraisal of where the firm currently is.
true
Large firms often make greater use of formalization and standardization because as the firm grows it becomes more difficult to exercise direct managerial oversight.
true
Options are valuable when there is uncertainty, and because technology trajectories are uncertain, an options approach may be useful.
true
T/F Increasing returns to adoption means that the more a technology is adopted, the more valuable it becomes.
true
Technology trajectories are most often used to represent the technology's rate of performance improvement or its rate of adoption in the marketplace. T/F
true
The balanced scorecard is a measurement system that encourages the firm to consider its goals from multiple perspectives (financial, customer, business process, and innovation and learning), and establish measures that correspond to each of those perspectives.
true
While mechanistic structures are often associated with high centralization, it is also possible for organizations to have a highly decentralized mechanistic structure by using formalization as a substitute for direct oversight.
true
While the value of a stock is independent of the call holder's behavior, the value of a R&D investment is not independent of the investor's behavior.
true
A firm prompts rapid adoption of one of its products when it actually is available by building the impression among customers that the product is ubiquitous. This scenario primarily involves the use of _____.
vaporware
true statement about entrants to the market.
-Studies on whether it is better to be a first mover, early follower, or late entrant have conflicting conclusions. -First movers are also known as pioneers.
True or false: The threat of substitution of a product or service is inversely proportional to the potential of the available substitutes.
False
Causally ambiguous
The way in which the resources give rise to value is uncertain.
Which of the following statements is true of learning effects?
There are substantial differences in the rates at which organizations learn.
Typically the intellectual property policies of a university embrace both patentable and unpatentable innovations, and the university retains sole discretion over the rights to commercialize the innovation.
True
Clear Vision Inc. has been the market leader for vision care products such as eyeglasses and lenses. It has also recently developed the use of laser technology to correct eye defects. Because of its prior related experiences, it has been successful in recognizing the value of new information and using it to develop new technologies ahead of others. This phenomenon is called:
absorptive capacity.
Usually, the appropriability of a firm's innovation is determined by _____.
how quickly or easily competitors can copy the innovation
The Solow Residual refers to the:
increased amount of output achievable from a given quantity of labor and capital due to technological innovation.
First Movers
product pioneers that are the first to create a market or product category, making them readily recognizable to consumers and thus establishing a commanding and early market share lead
In an organizational context, identify the true statements about architectural innovations. (Check all that apply.)
-Most of them create changes in a system that reverberate throughout its design. -They often have far-reaching and complex impacts on technology users and industry competitors.
In the context of a firm's project, identify the true statements about both net present value (NPV) and internal rate of return (IRR) techniques. (Check all that apply.)
-They offer concrete financial estimates that facilitate strategic planning and trade-off decisions. -They explicitly take into consideration the timing of investment and cash flows and the time value of money and risk.
Iris is quite skeptical about new innovations and is most likely to adopt something new only after experiencing peer pressure. However, she is not so risk averse that she will wait until all uncertainty of a new technology has been resolved; she is willing to accept a little uncertainty if her peers already use the product. Which of the following adopter categories does Iris belong to?
Late majority
According to W. Chan Kim and Renee Mauborgne's "Buyer Utility Map," which of the following are stages of the buyer experience cycle? (Check all that apply.)
Maintenance Disposal Supplements Purchase Use Delivery
Which of the following statements is true of geographical clustering?
Proximate firms have an advantage in sharing information that can lead to greater innovation productivity.
Science Parks
Regional districts, typically set up by the government, to foster research and development (R&D) collaboration between government, universities, and private firms
Radical Innovation
The experience and familiarity of producers and customers with the innovation and their judgment of its usefulness or reliability will vary. Radical innovations
Identify a likely reason a firm might choose to engage in solo development of a project.
The firm does not have certain required capabilities, but there are also no potential partners with such capabilities.
Path dependent
The resources rely on a particular historical sequence of events.
Organizations that forgo investment in technology development
They may find it very hard or costly to develop technology in a subsequent period.
Investing in process innovation helps firms lower their costs.
True
Knowledge brokers in the innovation network put existing information to use in profitable and new ways.
True
True or false: The threats and opportunities posed by an industry are influenced by the availability, quality, and price of complements.
True
Which of the following is a difference between wholly proprietary systems and wholly open systems?
Unlike wholly open systems, wholly proprietary systems typically give their developers the opportunity to appropriate rents from their technology.
Identify the true statements about the Patent Cooperation Treaty, or PCT. (Check all that apply.)
With a single PCT patent application, an inventor is allowed to establish a date of application in multiple member countries. It enables the application for a patent in multiple countries.
Combining the capabilities and other resources of partner firms but not necessarily transferring those resources between the partners is referred to as _____.
capability complementation
Additional goods and services that enable or enhance the value of another good are known as (blank) (blank)
complementary Blank 2: goods, products, services
A firm produces internal hard drives for computers. The firm is primarily an example of a(n) _____.
complementor
The U.S. Postal Service now offers a "Click-N-Ship" online service where users can buy and print shipping labels online. According to the Buyer Utility Map, the U.S. Postal Service is offering the _____ utility lever during the _____ stage of the buyer experience cycle.
convenience; purchase
In the context of assessing a firm's current position, Michael Porter's five-force model was originally developed to _____.
evaluate industry attractiveness
A firm intending to refine an earlier entrant's technology should avoid fast-cycle development processes.
false
A firm's effectiveness at managing its collaborations will increase with the number of collaborations to which it is committed.
false
A strategic stakeholder analysis emphasizes the stakeholder management issues a firm ought to attend to due to their ethical or moral implications.
false
According to Porter's value chain model, firm infrastructure is a primary activity.
false
All innovations require complementary goods, and none of them can utilize existing complementary goods.
false
From a real options perspective, the value of a call stock option is zero as long as the price of the stock is more than the exercise price.
false
It is unusual for a company to lack certain complementary assets required to transform a body of technological knowledge into a commercial product.
false
Obtaining some of the necessary capabilities or resources from a partner rather than building them in-house will increase a firm's asset commitment.
false
Path dependency refers to the abilities that make a firm more agile and responsive to change.
false
Weekly News Inc. bought the paper mill that supplied paper for printing its magazine. This is an example of horizontal integration.
false
Individuals or organizations in the innovation network that transfer information from one domain to another in which it can be usefully applied are known as _____.
knowledge brokers
A contractual arrangement whereby one organization or individual obtains the rights to use the proprietary technology of another organization or individual is called _____.
licensing
A firm choosing to decentralize its R&D by divisions rather than centralizing it will have a greater possibility of:
matching new products to the requirements of the customers served.
Firms may seek patents just to limit the options of competitors or to earn revenues through aggressive patent lawsuits. These actions are sometimes referred to as
patent Blank 2: trolling
Which of the following is a characteristic of the center-for-global strategy?
Proprietary technologies are shared with all units.
The buyer can threaten to backward vertically integrate.
The buyer's bargaining power will be increased.
Not-invented-here syndrome occurs when:
a division of a firm is reluctant to adopt other divisions' innovations.
The ability of an organization to recognize, assimilate, and utilize new knowledge is known as its _____.
absorptive capacity
Identify the true statements about the Paris Convention for the Protection of Industrial Property. (Check all that apply.)
-It is an international intellectual property treaty adhered to by 177 countries as of March 2018. -It eliminates any differential patent rights presented to citizens of a country versus foreign nationals.
true statements about late entrants to the market.
-They can produce a product that achieves a close fit with market preferences. -They typically do not have to invest in exploratory research and development.
true statements about first movers in the market.
-They must be able to face a significant period with little sales revenue from the product. -They often require significant amounts of capital that either is available internally or can be accessed externally.
In the context of platform ecosystems, when do platforms become more valuable than a tightly integrated product? (Check all that apply.)
-When customers are diverse and require more choices than a single firm can provide -When third-party options are diverse and high quality -When compatibility with third-party products can be made seamless without integration
Which of the following products is considered the most creative one?
A product that is novel at the individual producer level, the local audience level, and the broader societal level
Which of the following situations leads to an increase in the bargaining power of suppliers in an industry?
A supplier threatens to forward vertically integrate into a firm's business.
According to section 106 of the U.S. Copyright Act of 1976, the owner of a copyright has the exclusive right to perform (or authorize others to perform) certain activities. Which of the following are these activities? (Check all that apply.)
Exhibiting the work publicly Reproducing the work in phonorecords or copies
Which of the following is true of interfirm collaborative research and development networks?
Interfirm networks can enable firms to achieve much more than they could achieve individually.
A private network that is accessible only to authorized individuals can be used by companies to tap the creativity of its individual employees. This network is known as
Intranet
If an individual knows a field too well, it can stifle his or her ability to come up with solutions that require an alternative perspective.
True
Identify the requirements for a firm's resources to be a potential source of sustainable competitive advantage. (Check all that apply.)
The resources should be rare. The resources should be durable. The resources should be valuable.
Which of the following statements is true of a monopoly cost curve?
The steepness of a monopoly cost curve is largely a function of a firm's discretionary behavior.
Which of the following is a feature of the blue ocean strategy?
The strategy lays emphasis on making the competition irrelevant.
Pioneer Systems Inc. has a high degree of formalization. Employees in Pioneer Systems are more likely to:
face morale and motivation problems.
Ammunition can be considered a complement for firearms.
true
Which of the following statements is true of a dominant design?
A firm may find itself locked out of the market if it is unable to adopt the dominant design.
Which of the following firms is most likely a late entrant to the market?
A firm that saves expenses related to the development of a new technology
basic research vs. applied research
Basic: It is effort directed at increasing understanding of a field or topic without a specific immediate commercial application in mind. It is effort directed at increasing understanding of a field or topic without a specific immediate commercial application in mind. Applied research matches: It is effort directed at increasing understanding of a topic to meet a specific need.
Which of the following is the formula used for calculating the annuity present value of the cash inflows from a development project? C stands for dollars per period, t stands for periods, and r stands for discount rate.
C × 1−{1(1+r)t} (r(below division line) )
Firms cannot influence the shape of the s-curve through their development activities.
F
Which of the following is an advantage of collaborating?
It gives firms more flexibility.
A modular product system
It often offers more choices over function, design, scale, and other attributes, enabling the customers to choose a product system that more closely suits their needs and preferences.
Which of the following is a reason attributed to the failure of start-up firms?
New innovations typically tend to be adopted very slowly at first.
The effort invested in the technology is relatively constant over time.
Plotting performance against time will result in the same characteristic curve as plotting performance against effort.
Assessing a particular company's external environment
To identify threats and opportunities for a firm
Firms often form alliances with competitors to jointly work on an innovation project or to exchange information in pursuit of innovation.
True
If a pharmaceutical company discharges untreated chemical waste into local water bodies of a community, it will impose a negative externality on the community members.
True
Presumably doing in-house research and development (R&D) helps build a firm's ability to recognize, assimilate, and utilize new knowledge. This ability is known as _____.
absorptive capacity
In the context of technology clusters, the benefits firms reap by locating in close geographical proximity to each other are known as _____.
agglomeration economies
The benefits firms reap by locating in close geographical proximity to each other are known collectively as _____.
agglomeration economies
Which of the following is a general term that can refer to any type of relationship between firms?
alliance
Carl owns a software firm, and Mike owns a computer hardware manufacturing firm. They decide to create an alliance in order to manufacture laptops and desktops using the shared competencies of their respective firms. When creating the alliance, they make sure that each of them invests 50% capital and that they would each own a specified right to a percentage of the profits from the alliance. The collaborative relationship in this scenario is known as _____.
alliance contracts
The degree to which a firm can capture the rents from its innovation is termed _____.
apropriability
Perfecto Espresso Corp. is a chain of coffee shops in the United States. Earlier it used to source its coffee from several coffee suppliers. However, recently it started its own coffee plantation to supply its coffee shops. This is an example of:
backward vertical integration.
Techworld Zone Inc. is a renowned laptop and desktop manufacturer. The firm employs thousands of employees and has always followed a rigid hierarchical structure. The management of the company recently decided that it was high time the firm disaggregate in order to:
become more responsive to technological changes.
NewDigger Inc. makes backhoes for digging ditches and trenches. It has developed an environmental-friendly liquid that, when poured on the ground, reduces the time and labor required to dig trenches of various depths, depending on how much is applied. The firm has recently started using this product commercially. This would most probably be considered a(n) _____ project for NewDigger.
breakthrough
TechToTeach Co. has developed and sold a product that can be used by students to take faster notes in a classroom as the teacher speaks. The device automatically records the teacher's voice and converts it into a text format. This new technology has been widely accepted by various universities and has been appreciated by students, thus increasing the company's inflow. This technology can be most accurately described as a(n) _____ project by TechToTeach.
breakthrough
A company sets a fixed research and development budget and then utilizes a rank ordering of possible projects to ascertain which will be funded. This scenario represents the process of _____.
capital rationing
The value of an electronic reader is related to the availability of books, journals, magazines, etc. in a format that can be read by the electronic reader. For an electronic reader, these are _____ goods.
complementary
The emergence of a new technological discontinuity can overturn the existing competitive structure of an industry, making new leaders and new losers. Schumpeter called this process _____.
creative destruction
The time required to break even on a project using discounted cash flows is known as the (*blank) (blank) (blank)
discounted Blank 2: payback Blank 3: period
Magnitude Inc. was the first company to introduce a video gaming console in the market. However, consumers were uncertain about the product, and its high costs discouraged consumers from purchasing it. Eventually, Magnitude withdrew the product from the market. A few years later, Mantel Corp. and Adventura Inc. came up with their respective gaming consoles and successfully established their products. In this scenario, Mantel and Adventura would be considered:
early followers
If a firm has the option of investing in R&D, the cost of commercializing a new technology that is developed can be considered the:
exercise price.
Network externalities seldom arise in markets that do not have physical networks.
f. THEY CANT
Resources of a tangible nature that can be readily codified are called tacit resources.
fale
A modular innovation significantly affects the overall configuration of a system. T/F
false
Patent protection lasts
for 20 years in most countries.
Many universities in the United States have established technology transfer offices to _____.
increase the extent to which university research leads to commercial innovation
As a firm grows bigger, it becomes:
less efficient in R&D because of loss of managerial control.
Anderson and Tushman refer to the displacement of an old technology by a new technology as _____.
substitution
A body of research has focused on explaining the spread of knowledge across organizational or regional boundaries. This topic is known as
technological spillovers
Firms can use strategic alliances to exploit their own capabilities by leveraging them in another firm's development efforts.
true
Other things being equal, less customer uncertainty favors earlier timing of entry.
true
Identify the true statements about internal rate of return (IRR). (Check all that apply.)
-It is normally calculated as the discount rate that makes the net present value of an investment equal zero. -It asks, "Given a particular level of expenditure and particular level(s) and rate of cash inflows, what rate of return does this project yield?"
Identify the likely reasons firms choose not to collaborate with other firms. (Check all that apply.)
-They think that solo development efforts are key to building and renewing their capabilities. -They do not want to expose their existing proprietary technologies to the prying eyes of a would-be competitor. -They want to completely control their development processes and the use of any resulting new technologies.
Identify true statements about a licensing agreement between two firms. (Check all that apply.)
-Through licensing, the licensee is enabled to rapidly acquire a technology (or other resource or capability) it does not possess. -Licensing a technology from the licensor is typically much cheaper for the licensee than developing a new technology in-house.
What is the net present value (NPV) of a project if the present value of cash inflow is $10,000 and the present value of cash outflows is $5,000?
5000
Design Patents take Utility Patents take
6 months 12 months
Which of the following statements is true of technology diffusion?
A drop in the price of a new technology can accelerate technology diffusion.
The Corner Shop Corp. is a leading supermarket chain in Chicago. According to Michael Porter's model of a value chain, which of the following activities of the firm is a primary activity?
An advertising campaign for a new The Corner Shop outlet
A competence-destroying innovation
An innovation that renders obsolete existing knowledge and skills
Fabmark Consultancy was asked by a client to evaluate the attractiveness of a potential project to develop a new product line. The data provided by the client included cash flow estimates (in dollars), ranking of marketability by the sales force, and ranking of different product attributes from a potential customer focus group. Which of the following methods would allow Fabmark Consultancy to combine this information and analyze it?
Data envelopment analysis
Forward vertical integration
DeltaTechno Inc. buys its distributor.
Which of the following statements is true of a firm entering a market too early?
Enabling technologies and complements available to the firm will be immature.
The _____ of an economy is its total annual output as measured by its final purchase price.
GDP
Silk Work Inc., a manufacturer of silk garments, is planning to replace hand weaving with some modern machines that run on fuel. Which of the following consequences of this measure can be categorized as a negative externality?
Increased pollution as a result of the new technology
Tacit knowledge
Knowledge that cannot be readily codified or transferred in written form
It is possible for a firm that follows an s-curve model too closely to end up switching technologies later than it should.
T
Assessing the attractiveness of the line of business
The analysis may take the view of a specific firm, often identifying ways in which the forces outside the firm differentially affect the firm vis-à-vis its competitors.
A collaborative arrangement between two firms involves a significant equity investment from each firm and leads to establishment of a new separate entity. The carefully constructed contractual arrangement specifies the capital and other resources to be committed by each firm and the division of any profits earned by the arrangement. Based on the given information, which of the following is most likely true about this arrangement?
The arrangement is a joint venture.
Specific phase
The dominant product design establishes a stable architecture for the technology and lets firms focus their efforts on process innovations or incremental innovations.
To completely unleash a person's creative potential generally requires a supportive environment. Which of the following are requirements for this environment?
The environment should provide time to explore ideas independently. The environment should not be overly rigid or hierarchical.
Internal perspective
The number of safety incidents per month, franchise quality ratings, inventory costs, and stockout rates -To improve inventory management and to build best-in-class franchise teams
Innovation and learning perspective
The percentage of sales from products developed within the past five years, employee training targets, and average length of the new product development cycle -To improve employee skills and to accelerate and improve new product development
Which of the following statements are true about a trademark? (Check all that apply.)
The protection offered by the registration of a trademark in the United States starts from the date of filing. Registration of a trademark provides public notice of the registrant's claim of ownership over the mark.
Which of the following statements is true of angel investors?
Wealthy individuals
When a technology makes a dramatic improvement over previous generations or different technologies that serve similar functions, there will be less ___.
ambiguity about the technology's value
component (or modular) innovation
an innovation to one or more components that does not significantly affect the overall configuration of the system
When Fun Bun Inc., an international fast-food chain, set up operations in China, it had to teach farmers how to grow a particular variety of potatoes, and bakers had to be taught how to make hamburger buns. This is an example of:
an undeveloped supply channel
According to Porter's five-force model, if a buyer can threaten to backward vertically integrate, it will:
increase the buyer's bargaining power.
If aspects that customers have come to expect in a technology are difficult for competitors to imitate, being the technology leader will:
yield sustained monopoly rents
Walter is the new director of R&D at Good Health Inc., a pharmaceutical company. Which of the following statements by Walter would indicate that he believes in the concept of the innovation funnel?
"While there are many potential new product ideas going in the wide end, very few make it through the development process."
true statements about technological innovation.
-A technology gains customer acceptance rapidly when it makes a dramatic improvement over previous generations or different technologies that serve similar functions. -If the value of an innovation hinges critically on the availability and quality of complementary goods, then the state of complementary goods decides the likelihood of successful entry.
outbound logistics
Activities needed to collect, store, and distribute outputs
The Small Business Technology Transfer (STTR) program matches
Agencies give grants of up to $1,150,000 to facilitate a partnership between a small business and a nonprofit research institution.
Assessing the collaboration's effect on the firm's strategic direction
Are the collaboration's objectives likely to change over time?
The allocation of a finite quantity of resources over different possible uses is known as (blank) (blank)
Blank 1: capital Blank 2: rationing
A partnership between two or more firms involving a significant equity stake by the partners and often resulting in the creation of a new business entity is known as a(n) (blank) (blank)
Blank 1: joint Blank 2: venture
Firms may liberally diffuse their technology through a type of software whose code is made freely available to others for use, augmentation, and resale to accelerate the technology's proliferation. This software is known as (b) (b) (b)
Blank 1: open Blank 2: source Blank 3: software
Assessing the collaboration's effect on the firm's opportunities and threats
Choice, Would the collaboration affect the availability of complementary goods or the threat of substitutes? Would the collaboration affect the availability of complementary goods or the threat of substitutes?
Abilities in managing the market interface
Information systems and logistics management
Incubators
Institutions designed to nurture the development of new businesses that might otherwise lack access to adequate funding or advice
the most important intellectual abilities for creative thinking.
Intelligence Memory The ability to examine which ideas are worth pursuing and which are not
Which of the following statements is true of the Bayh-Dole Act of 1980?
It allowed universities to collect royalties on inventions funded with taxpayer dollars.
Resource fit
It refers to the degree to which the firms have assets that can be effectively integrated into a strategy that creates value.
A bicycle manufacturing company adopted a new type of inventory management system. This inventory system improved the productivity of its manufacturing unit and the quality of its bicycles. This is an example of _____ innovation.
PROCESS
Which of the following statements is true of Michael Porter's model of a value chain?
Procurement includes activities such as the acquisition of inputs.
In the _____ method, in order to establish scales of customer preferences, individuals in a group are each given a stack of cards with an object or idea on each card.
Q-sort
In an organizational context, the term "_____" refers to a range of activities that extend from early exploration of a domain to specific commercial implementations.
Research && Development
Process innovations
They are innovations in the way a firm conducts its business, such as in the techniques of producing or marketing goods or services.
Which of the following statements is true of skunk works?
They are isolated from the mainstream organization to which they belong.
In the context of organizations, identify a true statement about process innovations.
They are often aligned toward improving the effectiveness or efficiency of production.
Which of the following is true of quantitative methods of analyzing new projects, particularly in rapidly changing environments?
They enable managers to use rigorous statistical comparisons of projects.`
Assessing the collaboration's effect on the firm's opportunities and threats
Would the collaboration affect the availability of complementary goods or the threat of substitutes?
When a technology's performance is plotted against the amount of effort and money invested in the technology, it ideally shows _____.
an s-curve that indicates slow initial improvement, then accelerated improvement, and then diminishing improvement
Low exit barriers intensify rivalry by making firms reluctant to abandon the industry.
false
Self-enforcing norms based on goodwill, trust, and reputation of partners are known as _____.
relational governance
In general, the more firms competing that are of comparable size, the more competitive the industry will be.
rue
Arica Software Inc. is trying to estimate the installed base for its software. It is trying to assess the number of:
users of its software.
Erison Group, an advertising company, wants to hire a creative head. Who among the following would be best suited for this position?
An individual who has a moderate degree of knowledge of the field but is intrinsically motivated
Which of the following statements is true of first movers in comparison with early followers and late entrants?
First movers are in a better position to exploit buyer switching costs and also to reap increasing returns advantages.
_____ refers to a contractual arrangement whereby one organization or individual obtains the rights to use the proprietary technology of another organization or individual.
Licensing
_____ offers a fast way for a firm to extend the reach of its technology that is nearly free and offers the potential for royalties.
Licensing out a technology
Money Club and Money Ball are online platforms that allow their members to get in touch with people from various businesses. They also facilitate business contracts between their members. Money Club has 6,000 members, whereas Money Ball has 3,500 members. This indicates that:
Money Club has a larger installed base than Money Ball.
(blank) (blank) (blank) refers to multiple stages of the new product development process occurring simultaneously.
Parallel Blank 2: development Blank 3: process or processes
Network externality returns refers to the value customers reap as a larger portion of the market adopts the same good.
T
Products that have a large installed base are likely to attract more developers of complementary goods.
T
S-curves of technology diffusion are in part a function of the s-curves in technology improvement.
T
Since perceived or expected installed base may drive subsequent adoptions, a large perceived or expected installed base can lead to a large actual installed base.
T
The threat of competitive entry is high.
The firm may have to enter earlier to capture market share, establish brand image, and secure relationships with suppliers and distributors.
Identify the true statements about innovators, a type of adopter categories proposed by Everett M. Rogers. (Check all that apply.)
They are very adventurous in their purchasing behavior. They usually have access to substantial financial resources.
Identify the true statements about network externalities that characterize markets. (Check all that apply.)
They arise when additional goods and services that enhance the value of another good are important. They can occur in markets that do not have physical networks.
Identify the true statements about quantitative methods used for analyzing potential innovation projects. (Check all that apply.)
They can explicitly consider the timing of cash flows and investment. They offer the possibility of making the returns of a project seem unambiguous.
Identify the true statements about universities in the United States as sources of innovation.
They conducted $64.6 billion worth of research and development (R&D) in 2015. They were the number one performer of basic research in the United States in 2015.
Which of the following statements is true of loosely coupled organizational structures?
They ensure high synergies are achieved.
Most innovative ideas do not become successful new products.
True
Proximity and interaction can directly influence firms' ability and willingness to exchange knowledge.
True
Sometimes, monetary rewards undermine creativity by encouraging employees to focus on extrinsic rather than intrinsic motivation.
True
Component technologies that are necessary for the performance or desirability of a given innovation are referred to as _____.
enabling technologies
Early Followers
entrants that are early to market, but not first
Late Entrants
entrants that do not enter the market until the time the product begins to penetrate the mass market or later
A competence-enhancing innovation
innovations build on the firm's existing knowledge base
Increasing returns to adoption imply that technology trajectories are characterized by _____, which means that relatively small historical events may have a great impact on the final outcome.
path dependency
When the first personal computers were introduced, Bill started using a spreadsheet program to maintain his accounts. Bill discovered that this new method of maintaining his accounts caused his work to become much slower and that if he typed in the wrong data, it led to more mistakes. This scenario illustrates that:
technological discontinuity may initially have lower performance than the incumbent technology.
A variety of rice created by Biocrop Inc. through recombinant DNA technology was found to be rich in both carbohydrates and proteins. After the success of this rice variety, recombinant DNA technology was implemented by less-developed countries to increase the nutrient levels of fruits, pulses, and greens in order to feed their malnourished children. This is an example of _____.
technological spillover
The path a technology follows through time is termed as _____.
technology trajectory
The more a technology is adopted, _____.
the greater are the opportunities for development of complementary assets.
In the context of the ways of protecting intellectual property, a logo on a product is an example of a _____.
trademark
A derivative project is designed to serve a core group of consumers, whereas platform projects represent modifications of the basic platform design to appeal to different niches within that core group.
true
According to Porter's five-force model, the threat of potential entrants is influenced by the height of entry barriers.
true
Breakthrough projects typically offer fundamental improvements in the cost, quality, and performance of a technology over preceding generations.
true
Identify the true statements about the internal rate of return (IRR) of a firm's project. (Check all that apply.)
-It must be calculated using the trial-and-error method, substituting progressively higher interest rates into the NPV equation until the NPV is driven down to zero. -IRR techniques offer concrete financial estimates that facilitate strategic planning and trade-off decisions.
Identify the true statements about adopter categories proposed by Everett M. Rogers. (Check all that apply.)
-The late majority is reluctant to invest in the adoption of an innovation until most of the uncertainty about the innovation has been resolved. -The early majority adopts innovations slightly before the average member of a social system.
1. Role of customers 2. Role of capabilities 3. Project timing and cost
1. Are there other likely markets for the product? 2. Does the project leverage the core competencies or sources of sustainable competitive advantage of the firm? 3. Is the firm likely to be the first to market?
Based on C. K. Prahalad and G. Hamel's visualization of a firm's core competence, arrange the organizational entities that develop from the core competencies of a firm in the correct order of occurrence. (Place the entity that develops first at the top.)
1. Core Product 2. Business Unit 3. End Product
There are few suppliers, or suppliers are highly differentiated.
A firm may have little choice in its purchasing decision, and therefore have little leverage over a supplier to negotiate terms such as prices and delivery schedules.
The Small Business Innovation Research (SBIR) program
Agencies give grants of up to $1,150,000 to small businesses to help them develop and commercialize a new product or idea.
Which of the following are types of governance mechanisms firms use to manage their collaborative relationships? (Check all that apply.)
Alliance contracts Equity ownership
Which of the following statements is true of the different types of innovations?
An innovation that was once considered radical may eventually be considered incremental as the knowledge base underlying the innovation becomes more common.
Which of the following represents the "working requirement" established in many countries that effectively prevents inventors from patenting inventions in countries in which they have no intention of setting up production?
An invention should be manufactured in the country in which a patent was granted within a certain time period from the time the patent is granted.
Noah owns a firm that sells furniture at an affordable cost. As most of the products he sells need to be assembled by the customer, he is able to sell them at prices lower than most competitors. His marketing strategy focuses on providing lower prices for good-quality products. He has also marketed the fact that assembling the products is very easy if the customer follows the instructions and demos given on the firm's website. Considering that most of the customers used to buy furniture from out of town at higher prices, Noah's self-assembled furniture business has become quite successful in his town and he has managed to create and capture this demand in an uncontested market space. Which of the following strategies was used by Noah in his business?
Blue ocean strategy
Kroters Inc., a detergent manufacturing company, has built a new manufacturing plant on the outskirts of Woodsville. Since a majority of the population of Woodsville depend on agriculture for their livelihood, the management of Kroters decides to invest in a project that will most likely create a positive externality for the community members. Which of the following project plans is likely to help achieve positive externality?
By setting up an organic farm near Woodsville
Which of the following was indicated by research by the Federation of British Industries on external versus internal sourcing of innovation?
Companies that had their own research and development (R&D) were also the heaviest users of external collaboration networks.
According to the adopter categories proposed by Everett M. Rogers, early majority members are the first individuals to adopt an innovation and they have the greatest potential for opinion leadership.
F
In industries characterized by network externalities, the value of a technological innovation to users will be a function only of its stand-alone benefits and cost.
F
In the context of s-curves in technological improvement, as a technology begins to reach its inherent limits, the cost of each marginal improvement decreases, and the s-curve flattens.
F
T/F The learning curve indicates that the more units a company produces of an item, the more each unit will cost.
F
Technology diffusion and information diffusion take the same amount of time.
F
When an industry has network externalities, the value of a good to a user is more likely to go up linearly rather than increase in an s-shape.
F
A firm's organizational structure and control systems seldom have an influence on the generation of innovative ideas.
False
According to the concept of innovation funnel, the number of successful products launched will be greater than the number of raw ideas generated.
False
According to the concept of the innovation funnel, one new idea is usually responsible for several new products.
False
An organization's overall creativity level is a simple aggregate of the creativity of the individuals it employs.
False
Collaborative research is prohibited in high-technology sectors.
False
Collaborative research is typically insignificant in high-technology sectors.
False
Early leaders are firms that are the first to enter a market.
False
Flexible manufacturing technologies have made longer production runs economical and have increased the importance of production economies of scale.
False
Irrespective of the type of technological innovations, externalities that result from them are always positive.
False
Knowledge brokers create breakthroughs in a single technology and seldom exploit the potential synergies of combining existing technologies.
False
Knowledge that cannot be readily codified is called explicit knowledge.
False
The science-push approach to research and development argued that innovation was driven by the perceived demand of potential users.
False
Infrastructure
Functions like accounting, legal counsel, finance, public affairs, government relations, quality assurance, planning, and general management necessary to ensure smooth functioning of a firm
Backward vertical integration
Getting into the business of one's suppliers
Forward vertical integration
Getting into the business of one's suppliers
Wholly open systems
Goods based on technology that is not protected and that is freely available for production or augmentation by other producers.
Which of the following can be classified as an internal perspective and its defining measure under the balanced scorecard approach?
Having a goal such as improving customer satisfaction and its defining measure such as customer satisfaction surveys
Mark is a wealthy private financier who funds projects without utilizing a venture capital limited partnership structure. He typically provides funds for start-up projects that are $1 million or less. There have been instances in the past where Mark lost a huge share of money in some projects, but he also received high returns on some other projects. He is aware of the risks, but that does not stop him from funding start-ups. Which of the following would best describe Mark?
He is an angel investor.
In the 1980s and 1990s, Neon Corp. was the most successful firm in the television market. The firm believed that its competitors would never be able to produce televisions that compared to their products' quality and price. As a result, it was unable to compete with the newer models of televisions that its Japanese competitors had begun to infiltrate the market with. Eventually, Neon lost its market leadership to its competitors. This scenario most clearly exemplifies the _____.
Icarus Paradox
Which of the following statements is true of a collective research organization?
It allows a firm to share the cost and risk of basic research.
In the context of outsourcing, identify a true statement about contract manufacturing.
It allows a firm to tap the greater economies of scale and faster response time of a dedicated manufacturer.
In an organizational context, identify a true statement about the science-push approach to research and development.
It argued that the major sources of innovation were discoveries in basic science that were translated into commercial applications by the parent firm.
Relational governance
It can help decrease contracting and monitoring costs of managing the alliance and facilitate more extensive cooperation, sharing, and learning by the alliance partners.
Which of the following is a disadvantage of the local-for-local strategy?
It can result in significant redundancy in activities.
Which of the following statements is true of outsourcing?
It carries a risk of proprietary technology being expropriated by the contract manufacturer.
Which of the following is a disadvantage of using internal rate of return for assessing a project?
It discriminates heavily against long-term and risky projects.
true statements about a firm that has very fast new product development processes.
It has a better chance at being an early entrant than do others. It is typically able to take advantage of both first- and second-mover advantages.
Equity ownership
It helps align the incentives of the partners and provides a sense of proprietorship and commitment to the project that can facilitate supervision and monitoring of the alliance.
Which of the following statements is true of Porter's five-force model?
It is often used in practice to assess a specific firm's external environment.
Identify the true statements about copyright protection in the United States. (Check all that apply.)
It is secured automatically when an eligible work is made. Its rights are established by legitimate use of a work.
Strategic fit
It is the degree to which partners have compatible styles and objectives.
Which of the following statements are true about a strategic alliance between two or more firms? (Check all that apply.)
It is used to enable the partners to learn from each other and develop new competencies. It often does not have the shared language, routines, and coordination that facilitate the transfer of knowledge.
An invention must usually meet certain criteria to qualify for a patent in the United States. Which of the following are these criteria? (Check all that apply.)
It must not be obvious. It must generate a desirable result, solve an issue, improve on or propose a new use for an existing development, or show potential of doing so.
An invention should be manufactured in the country in which a patent was granted within a certain time period from the time the patent is granted.
It must not be obvious. It must generate a desirable result, solve an issue, improve on or propose a new use for an existing development, or show potential of doing so.
In the context of the ways of protecting intellectual property, identify the true statements about a patent. (Check all that apply.)
It protects a process, machine, manufactured item, or variety of plant. It offers a legal means for a person to protect his or her creative work and earn rewards, in exchange for making the knowledge underlying his or her work public.
In the context of the modes of firms' collaboration, identify the true statements about a firm's solo internal development. (Check all that apply.)
It provides the firm with great potential to leverage its existing competencies. It lets the firm retain total control over how its technology is developed and used.
Identify the true statements about a firm's architectural control. (Check all that apply.)
It refers to the firm's capability to direct the future development path of a technology. It can be gained by the firm through protecting the firm's technology.
Easymake Corp. developed a new Web design software to build Web pages for its clients. However, Easymake soon realized it could make more money by selling this software to those who wish to quickly build Web pages to sell their products. Which of the following would be the most appropriate strategy for Easymake?
It should become a licensor of the new Web design software.
Identify the true statements about the U.S. Uniform Trade Secret Act. (Check all that apply.)
It tries to make trade secret laws consistent from state to state. For information to qualify as a trade secret under this act, the trade secret holder must take reasonable measures to protect the secrecy of the information.
Erik works in the R&D department of a digital appliances manufacturing company. The company recently acquired a similar company in a different state. As part of the management's plan, Erik was among the chosen few to assist the R&D teams of both the companies in the transfer of information and product knowledge. The purpose of the plan was to enable future research to be conducted by applying all the information gathered by the two teams over the years. Which of the following terms best describes Erik?
Knowledge Broker
Zach has invented a device, which when plugged to household appliances, such as televisions, vacuum cleaners, sound systems, and mixer grinders, will operate them using solar power. The device also works as a battery and converts solar power into energy that can be used during the night. This device needs to be plugged into a port in the household appliances. Since not all appliances have this feature, Zach is of the opinion that he should delay his entry into the market. Which of the following statements supports Zach's decision?
Less mature enabling technologies may favor waiting for enabling technologies to be further developed.
Which of the following are not typically patentable? (Check all that apply.)
Merely altering the size of a device that already exists Changing an item's shape Making something more transportable
Many technologies are neither wholly proprietary nor wholly open. In this context, identify the true statements about the policies adopted by Microsoft. (Check all that apply.)
Microsoft adopts a limited licensing policy for its games to encourage developers to produce games for the systems. The licensing policies for Microsoft's Windows are more open than are those for its games.
Identify a true statement about net present value (NPV), a commonly used form of discounted cash flow analysis for evaluating investment decisions.
NPV asks, "Given a particular level of expenditure, particular level(s) and rate of cash inflows, and a discount rate, what is this project worth today?"
Organizational learning scholars generally model the learning curve as a function of cumulative output. Which of the following statements most likely represents this output?
Performance increases with the number of units of production, typically at a decreasing rate.
Which of the following statements is true of science parks?
Science parks often give rise to technology clusters that have long-lasting and self-reinforcing advantages.
Alex Richards is the owner of a pesticide manufacturing company. He is aware of the risks that the residents of a nearby community will face because of the liquid pollutants released from the manufacturing unit. In order to counter the risks, he decides to invest in a plan that will create positive externality. Which of the following plans should Alex invest in to accomplish his mission?
Setting up a water treatment plant in the vicinity
Susan recently dropped her smartphone, which she had been using for three years, and as a result, the phone broke. She had won this phone as a prize in a competition. Since repairing the phone would cost more than buying a new one, her friend suggests that she check out a couple of latest smartphones in the market. Susan has always been skeptical about buying a new smartphone as she thinks the latest phones are quite delicate and need to be handled with care. She researches about the latest phone models on the Internet but is still not convinced about going ahead with the purchase. She is concerned that even if she goes ahead with the purchase and if she drops the phone again, her phone would end up in a similar state as her previous one. Based on the information provided in the scenario, which of the following statements is true of Susan?
Since Susan has reservations about the product's durability, she can be classified as a laggard.
Technologically superior products do not always win in the market.
T
_____ is a positive externality from R&D resulting from the spread of knowledge across organizational or regional boundaries.
Technological Spillover
_____ administers the System of International Registration of Marks to eliminate the need to register a trademark separately in each country or region.
The World Intellectual Property Organization
Monopoly Rents
The additional returns (either higher revenues or lower costs) a firm can make from being a monopolist, such as the ability to set high prices, or the ability to lower costs through greater bargaining power over suppliers
The buyer faces switching costs.
The buyer's bargaining power will be reduced.
The firm faces switching costs to work with other buyers.
The buyer's bargaining power will be reduced.
Collaborations based on the combination of complementary resources
The collaborations are motivated by the requirement to access resources a partner firm does not possess.
In the context of a research and development (R&D) program, which of the following can be considered the exercise price?
The cost of future investment required to capitalize on the R&D program
Net present value (NPV) is a commonly used form of discounted cash flow analysis for evaluating investment decisions. Which of the following formulas represents NPV?
The discounted cash inflows of a project − The discounted cash outflows
Collaborating on development projects can offer a firm various advantages. Which of the following are these advantages? (Check all that apply.)
The firm can have rapid access to significant complementary assets that are required to transform a body of technological knowledge into a commercial product. A project's costs and risks can be shared, and this can be helpful when the project is very expensive.
There are significant entry barriers or few potential competitors with the resources and capabilities to enter the market.
The firm may be able to wait while customer requirements and the technology evolve.
A supplier's sales constitute a large portion of a firm's purchases.
The firm will be heavily dependent on the supplier, and the supplier will have more bargaining power.
Which of the following statements most likely represents increasing returns to technology adoption?
The more a technology is adopted, the more valuable it becomes.
Collaborations based on the combination of supplementary resources
The pooling of the resources that are similar to those possessed by a partner firm can enable both partner firms to achieve market power or economies of scale.
Which of the following statements is true of s-curves in technological improvement?
The s-curves flatten when the cost of each marginal improvement increases and diminishing returns to effort begin to set in.
M&P Inc., a consumer goods manufacturing firm, has subsidiaries throughout the globe that have to respond to varying local market requirements. Therefore, the firm has planned to adopt a local-for-local approach to innovation. Which of the following statements is true in this context?
The subsidiaries of M&P and their R&D divisions will be highly autonomous.
A firm's purchases constitute the bulk of a supplier's sales.
The supplier will be heavily dependent on the firm, and the supplier will have little bargaining power.
Wholly proprietary systems
The technologies may be legally made and augmented only by their developers.
Mark is the CFO of a company that manufactures air conditioners and refrigerators. The management wants to diversify its list of product offerings and therefore has asked the board of members and senior management to suggest a project plan. One of their suggestions was to manufacture smart televisions. Mark believes that if the company invests in this new project plan, it will not be able to make sustainable profits for long. Which of the following statements supports Mark's argument?
The time between the televisions intro in the market and its replacement with a next-generation television is 12 to 24 months.
The effort invested in the technology is not constant over time.
The true relationship can be obscured by the resulting s-curve.
The U.S. Uniform Trade Secret Act states that no individuals or groups can copy, use, or otherwise benefit from a trade secret without the owner's authorization if they meet any of certain conditions. Which of the following are these conditions? (Check all that apply.)
They acquire the secret through inappropriate ways such as theft or bribery. They are committed to a duty of confidentiality (e.g., employees, lawyers).
Identify the true statements about joint ventures. (Check all that apply.)
They are a specific type of strategic alliance that entails significant structure and commitment. They often result in establishment of a new separate entity.
In the context of research, identify the true statements about interfirm networks created through collaborative relationships among firms.
They are considered a significant engine of innovation and can act as conduits for information. They can help member firms achieve much more than they could achieve individually.
Product innovations
They are embodied in the outputs of a firm—its goods or services.
A 10-year study of inventors concludes that the most successful inventors possess certain characteristics. Which of the following are these characteristics? (Check all that apply.)
They cross-examine the validity of beliefs made in previous work in the field. They have mastered the basic tools and operations of the field in which they invent.
Identify the true statements about increasing returns to technology adoption. (Check all that apply.)
They occur when the rate of return from a technology rises with the size of its installed base. Complex technologies often demonstrate increasing returns to adoption.
User innovators
They often do not have any initial plan to profit from the sale of their innovation.
Identify the true statements about the core competencies of a firm. (Check all that apply.)
They refer to those aspects that differentiate the firm strategically. They rely on building high-quality relationships across different functions and business units of the firm.
A firm can backward vertically integrate.
This will decrease the bargaining power of suppliers.
A firm faces switching costs that make it difficult or expensive to change suppliers.
This will increase the bargaining power of suppliers.
Which of the following types of work cannot be typically copyrighted in the United States? (Check all that apply.)
Titles Short phrases Familiar symbols
Assessing the attractiveness of the line of business
To determine whether the industry as a whole will tend to be profitable
What is a "patent troll" company's primary purpose in owning patents?
To extort money from other companies
True or false: A firm's dynamic capabilities enable it to quickly adapt to major technological discontinuities or emerging markets.
True
True or false: Articulating a firm's strategic intent allows the firm to concentrate its development efforts and pick the investments necessary to develop strategic technologies and include them in the firm's new products.
True
In the context of platform ecosystems, when do platforms become more valuable than a purely modular system? (Check all that apply.)
When some integration between the platform and its complements offers performance advantages When significant components of the ecosystem require subsidization
In which of the following situations does modularity become increasingly valuable in a product system? (Check all that apply.)
When there are various technological options available to be recombined When the customer preferences are heterogeneous
In an organizational context, identify a true statement about the types of innovation based on the dimension of competence.
Whether an innovation is competence enhancing or competence destroying depends on whose perspective is being considered.
Yves Doz and Gary Hamel state that it is useful to categorize a firm's alliance strategy along two dimensions. Which of the following are these dimensions? (Check all that apply.)
Whether the firm manages a collective network of alliances or manages each alliance individually The extent to which the firm practices capability complementation versus capability transfer
Assessing the collaboration's effect on the firm's internal strengths and weaknesses
Would the collaboration enhance or leverage the core capabilities of the firm?
Alpen Inc. is a manufacturing firm that holds the patent for a new food processor that is considerably safer and more efficient than the others available in the market. Being the only firm that manufactures this product, Alpen charges a very high price for it. Based on the information provided in the scenario, which of the following statements is most likely to be true?
as alpen is the technology leader the food processor manufacturing sector, the firm will yield sustained monopoly rents.
TechSense, an electronics manufacturing firm, allows its customers to resell old TechSense products at its retail outlets. The firm reuses the metal, wires, and plastic—extracted from the old products—in its new products. This way the company has been able to take waste management to a whole new level. According to the Buyer Utility Map, the firm is applying environmental friendliness utility lever in the _____ stage of the buyer experience cycle.
disposal
In the context of s-curves in technological improvement, plotting performance against time will result in the same characteristic curve as plotting performance against effort only if:
effort is relatively constant over time.
A firm that develops new technologies ahead of others often tries a number of unsuccessful techniques before finding a solution that works well. This experimentation:
enables the firm to find related solutions and alternatives that work well.
When first movers in the market develop technologies, they often rely on other producers of component technologies that are necessary for the performance or desirability of a given innovation. These component technologies are known as (blank) (blank)
enabling technologies
Pioneer Athletics Inc. wants to provide better landing mats for gymnasts. It therefore asks its foam suppliers to use a new innovative process to manufacture higher quality, durable foam in its mats. This new process used to develop the foam represents a(n) _____ for Pioneer Athletics.
enabling technology
Jupiter Inc., a software firm, is starting to face competition from the new entrant in its market, Coral Inc. Jupiter wants to prevent its existing customers from switching to Coral's newly developed software. Which of the following measures should Jupiter adopt to achieve its objective?
ensuring that customers find its software simpler & more convenient to use than coral's
Alpha Information Inc. is a firm that manufactures desktop computers and wireless network hardware components. The company is spending heavily on R&D to experiment with new designs for wireless networks instead of trying to refine how well they make their current wireless network hardware components. The firm is going through a period of ambiguity and anxiety. Alpha Information Inc. is in the:
era of ferment.
A disadvantage of using parallel development processes is that it greatly lengthens the new product development time.
false
According to the net present value method of discounted cash flow analysis, the time required to break even on a project using discounted cash flows is known as period of return.
false
Both net present value and internal rate of return techniques provide concrete financial estimates that facilitate strategic planning and trade-off decisions.
false
Early followers enter the market only after a product begins to penetrate the mass market.
false
In a loosely coupled structure, development and production activities achieve coordination through tight integration.
false
In industries that have increasing returns to adoption due to network externalities, allowing competitors to get a head start in building an installed base is the safest strategy.
false
Licensing a technology from another firm is typically more expensive for a licensee than developing a new technology in-house.
false
Quasiformal structures foster interactions based on hierarchy rather than on interests.
false
Red oceans refer to untapped market space that firms create by redefining the dimensions of competition.
false
The drawback to data envelopment analysis (DEA) is that it does not allow comparisons of projects using multiple kinds of measures.
false
The ratio of R&D expenditures to sales is known as R&D trajectory.
false
True or false: Alliances formed between firms must be long term and must include formally contracted agreements.
false
When a market is characterized by mature enabling technologies, a firm should enter the market late.
false
With advances in information technology, loosely coupled organizational structures are losing their popularity.
false
True or false: A platform ecosystem is characterized by relationships that are as independent as arms-length market contracts.
false -A platform ecosystem is characterized by relationships that are neither as independent as arms-length market contracts nor as dependent as those within a hierarchical organization. It is, in essence, a hybrid organizational form.
True or false: When end results depend greatly on the events that took place leading up to the outcome, or are path dependent, it is often very easy to reproduce the results.
false -When end results depend greatly on the events that took place leading up to the outcome, or are path dependent, it is often impossible to reproduce the results.
In the context of a company's core competence, C. K. Prahalad and G. Hamel state that _____.
few companies are likely to be leaders in more than five or six core competencies
Greyer Corp. has developed a special drug that kills cancer cells. While the scientists at Greyer have the knowledge, they are short on equipment, money, and marketing know-how. In this situation, the most appropriate step for Greyer would be to:
find a partner to collaborate with to sell the drug.
Successful collaboration agreements typically have clear, yet flexible, monitoring and mechanisms of exerting authority and/or control. These mechanisms are known as _____ mechanisms.
governance
Fashion Fair Corp., the first mover in the "all-year discount" stores market, lost its market share to a late entrant, Brand Fair Inc. Brand Fair operates online discount stores, which is cost-efficient when compared to investing in a brick-and-mortar store. Fashion Fair has been unable to replicate the online store business model because of its existing contracts with suppliers and heavy investment in retail stores. This ultimately leads to the failure of the business. Which of the following can be attributed to Fashion Fair's failure?
incumbent inertia
Late entrants to the market can exploit the tendency for incumbents to be slow to respond to changes in the industry environment due to their large size, established routines, or prior strategic commitments to existing suppliers and customers. This tendency is known as
incumbent inertia
Nigel belongs to a wealthy family. He has always enjoyed trying out new gadgets and devices that are launched in the market. Since he is financially well-off, he likes to experiment with expensive products and is comfortable with the risks and uncertainties associated with these products. Based on this description, Nigel most likely belongs to the group of:
innovators.
The rate of return yielded by a project is known as (IRR)
internal rate of return
A resource can be extremely difficult to imitate if:
it arises through the complex interaction of multiple people.
A new technology is most likely to be successful in displacing an existing technology when:
it eclipses the combined value of the existing technology's stand-alone utility, its installed base, and its complementary goods.
Once a new product design becomes a dominant design, _____.
it is adopted by the majority of producers
ErgoWorld Inc. manufactures office furniture. The company is considering adopting a modular production system. A modular system would offer greater value to ErgoWorld if:
its customers have heterogeneous demands that need to be met in a cost-effective way.
Greyer Corp. manufactures surgical instruments. Systems Medico Inc. enters into a contractual arrangement with Greyer that allows it to use Greyer manufacturing methods and management structure to produce and sell surgical instruments. Systems Medico must pay a yearly fee to Greyer for the use of its manufacturing processes. In this scenario, Systems Medico is the _____.
licensee
The degree to which a system's components can be separated and recombined is known as its _____.
modularity
Future Electronics Inc.'s body scanning machine has been adopted by majority of the health-care market. As a result, the company demands a high price from its customers, which mainly include hospitals. The company has not been investing much on innovation and its product variety is low. The cost borne by the users in this case is referred to as:
monopoly cost.
The discounted cash inflows of a project minus the discounted cash outflows is referred to as the _____ of the project.
net present value
In a market characterized by (blank) (Blank) , or positive consumption externalities, the benefit from using a good increases with the number of other users of the same good. Listen to the complete question
network Blank 2: externalities
Highly consolidated industries with a few large competitors can be fiercely competitive if firms choose to engage in price wars. Such industries are known as
olisgopic ""
In the context of creativity, the personality trait of _____ reflects a person's use of active imagination, a preference for variety, attentiveness to emotion, aesthetic sensitivity, and intellectual curiosity.
openness to experience
The demand-pull approach to research and development refers to innovation that:
originates as a response to the specific problems or suggestions of customers.
Alumplus Aluminum Company has come up with a new type of metal. However, producing it would take up 75 percent of its manufacturing capacity and would hinder its ability to continue producing its other products. Alumplus Aluminum hires LM Group of Manufacturers to manufacture the new type of metal. This collaborative arrangement is most likely to be classified as _____.
outsourcing
Coolers Inc., a house appliances manufacturer, has upgraded its technology by making all its appliances work on voice sensors instead of remote controls or manual operations. Though the technology is new, Coolers has decided to introduce the product in the market at the same rates as its earlier technology so that its usual customers can purchase these products. This project is a(n) _____ for Coolers Inc.
platform
Some core part of a product mediates the relationship between a wide range of other components or complements and prospective end users in a(n) (blank) (Blank)
platform Blank 2: ecosystem
Typically, the initial step of a stakeholder analysis conducted by a firm is to _____.
recognize all the parties that will be affected by the firm's behavior
When Faslow Medical Center in Exeter County changed its name to Faslow Hospital, it also unveiled a plan to build a medical tower that would double its physical facilities by 100 percent within the next 10 years. It also announced that its goal was to not only serve Exeter County but also serve the entire region including the five contiguous counties. This is most accurately an expression of:
strategic intent.
In the context of qualitative methods for choosing projects, screening questions are used mainly to:
structure the discussion about project details like potential costs and benefits.
Ample Espresso Corp. is a coffeehouse located across from Tian's Kitchen, a restaurant. According to Porter's five-force model, the services and products provided by both are most accurately classified as:
subs
At the aggregate level, the more firms that are using a given technology and refining it, the more absorptive capacity that is being generated related to that technology, making development of that technology less effective and efficient.
t
In a market characterized by network externalities, the benefit from using a good decreases with an increase in the number of other users of the same good.
t
The president of Mountain Home University has been asked by the board members to set up a separate unit to facilitate the commercialization of technology developed by research students at the university. Such a unit is typically called a _____.
technology transfer office
Revisions to U.S. copyright law provide works created after 1978 with copyright protection that lasts for _____.
the author's life plus an additional 70 years
Ceramic Customs Corp. required a specific type of ceramic to make its tiles. Since there was only one supplier for that particular ceramic, the firm was forced to source all of its supplies from it. The firm tried negotiating the price of the material but failed to get any reduction on the cost. This was because:
the supplier had more bargaining power than the firm.
Calculating the internal rate of return of a project typically must be done by trial and error.
true
Collective research organizations can take the form of trade associations.
true
Conjoint analysis enables a subjective assessment of a complex decision to be decomposed into quantitative scores of the relative importance of different criteria.
true
Data envelopment analysis (DEA) utilizes linear programming.
true
Modular products become more valuable when customers have heterogeneous demands and there are diverse options for meeting them.
true
Other things being equal, an entrant with a strong reputation can attract adoptions earlier than entrants without strong reputations.
true
S-curves in technology performance and s-curves in technology diffusion are fundamentally different processes. T/F
true
Standard discounted cash flow analysis has the potential to severely undervalue a development project's contribution to a firm.
true
The initial cost of a good itself can be a switching cost.
true
The transnational approach to R&D leverages resources and capabilities that exist anywhere within a firm and deploys them when and where any opportunity arises.
true
Through a strategic alliance, firms can establish a limited stake in a venture while maintaining the flexibility to either increase their commitment later or shift these resources to another opportunity.
true
True or false: A major reason firms collaborate on a development project is to share the costs and risks of the project.
true
True or false: If features that customers have come to expect in a technology are difficult for competitors to imitate, being the technology leader can generate sustained monopoly rents.
true
True or false: Patent thickets in industries with complex technologies have resulted in a unique strategy of firms buying bundles of patents to create war chests that they hope will deter the patent attacks of others.
true
When technology is progressing rapidly, firms are more likely to:
use linkages with other specialized firms to access resources they do not possess.
Oswen Technologies Inc., a software development company, conducted a market survey to understand its customer base. Based on the responses, the management decided that in order to increase the size of its installed base, it will need to invest a huge amount in advertising software products that were not yet in the market. The firm hoped to bring these products to the market at a later date. The software products advertised before their availability are termed _____.
vaporware
The standard form of the learning curve is formulated as _____, where x is the cumulative number of units produced, y is the number of direct labor hours required to produce the xth unit, a is the number of direct labor hours required to produce the first unit, and b is the learning rate.
y = ax−b
In the industrial context, identify the true statements about innovation. (Check all that apply.)
Firms are well suited to innovation activities because they possess a management system to gather their resources toward a collective purpose. T: Innovation can arise from several different sources.
A 10-year study of inventors concludes that the most successful inventors possess certain characteristics. Who among the following possesses one of these characteristics?
Viola, who has the sense that all knowledge is unified
In the context of creativity, something imagined or pictured in the mind is called a(n)
idea
Jordan, the CEO of Early Bird Corp., believes that it is important to focus on the quantity of new product ideas generated rather than the quality of ideas generated. He encourages everyone in the company to come up with product ideas, and those that seem feasible are further developed. According to him, it takes several raw ideas to develop one successful new product. Jordan's views reflect the concept of:
innovation funnel
People are more likely to be creative if they work on things they are genuinely interested in and enjoy. This most likely shows the importance of _____ in creativity.
intrinsic motivation
Electronic waste results from the disposal of technological goods. This is an example of:
negative externality