MKT 3360 PIM Chapter 3

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: -early majority. -early adopters. -innovators. -laggards.

innovators.

A radical innovation differs from an incremental innovation in that it refers to an innovation that: -makes a relatively minor change from existing processes. -is very new and different from prior solutions. -seldom affects the overall configuration of the system. -is typically competence enhancing as it builds on the firm's existing knowledge base.

is very new and different from prior solutions.

Once a new product design becomes a dominant design, _____. -the product is no longer profitable -it becomes difficult for competitors to imitate -the architecture on which the industry can focus its efforts is destabilized -it is adopted by the majority of producers

it is adopted by the majority of producers

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. -virtual -regressive -archaic -process

process

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: -effort invested in an existing technology reaps higher returns than effort invested in a new technology. -effort invested in an incumbent technology is much higher than effort invested in a new technology. -technological discontinuity may initially have lower performance than the incumbent technology. -component innovations are more effective than architectural innovations.

technological discontinuity may initially have lower performance than the incumbent technology.

The path a technology follows through time is termed "_____." -technology map -technology trajectory -technology cluster -technology transfer

-technology trajectory

Which of the following statements is true of a component innovation? -A component innovation does not significantly affect the overall configuration of a system. -A component innovation is also called an architectural innovation. -For a firm to initiate a component innovation, knowledge about the whole system is necessary. -A component innovation has more far-reaching and complex influences on industry competitors and technology users than an architectural innovation.

A component innovation does not significantly affect the overall configuration of a system.

Which of the following statements is true of technology diffusion? -S-curves in technology diffusion are obtained by plotting performance against time. -Technology diffusion is much faster than information diffusion. -A drop in the price of a new technology can accelerate technology diffusion. -Adoption is initially fast when a new technology is introduced to the market.

A drop in the price of a new technology can accelerate technology diffusion.

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.

According to Anderson and Tushman, in the era of incremental change, firms _____. -attempt to achieve lower market segmentation by offering different models and price points -undergo a period of turbulence and uncertainty -focus on efficiency and market penetration -focus on altering the architecture rather than improving components

focus on efficiency and market penetration

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. -radical -discontinuous -architectural -component

component

S-curves in technology diffusion are obtained by plotting the: -capacity of a technology against time. -cumulative number of adopters of a technology against time. -performance speed of a technology against effort. -performance power of a technology against effort.

cumulative number of adopters of a technology against time.

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: -speed, a function of performance, is relatively constant over time. -effort is relatively constant over time. -power, a function of performance, is relatively inconsistent over time. -effort varies over time.

effort is relatively constant over time.

Which of the following statements is true of the different types of innovations? -Process innovations are more visible than product innovations. -An innovation that was once considered radical may eventually be considered incremental as the knowledge base underlying the innovation becomes more common. -An innovation is considered a component innovation if it significantly affects the overall configuration of the system of which it is a component. -An architectural innovation is also called a modular innovation.

An innovation that was once considered radical may eventually be considered incremental as the knowledge base underlying the innovation becomes more common.

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? -Complementary -Component -Discontinuous -Incremental

Discontinuous

A modular innovation significantly affects the overall configuration of a system.

False

A technology diffusion curve is s-shaped because adoption is initially fast when a new technology is introduced to the market.

False

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.

False

Firms cannot influence the shape of the s-curve through their development activities.

False

For a firm to adopt a component innovation, it requires architectural knowledge about the way components link and integrate to form a whole system.

False

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.

False

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.

False

Product innovations are more important than process innovations to organizations because they are less visible than process innovations.

False

Technology diffusion and information diffusion take the same amount of time.

False

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? -Early adopters -Innovators -Late majority -Laggards

Late majority

A marketing research company categorized Jane as an early adopter. Which of the following would be true of Jane in this context? -She does not adopt an innovation until she experiences peer pressure. -She is well integrated into her social system. -She has a skeptical attitude toward new ideas. -She has a low potential for opinion leadership.

She is well integrated into her social system.

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.

Which of the following statements is true of s-curves in technological improvement? -They are obtained by plotting the cumulative number of adopters of the technology against time. -They typically show that technology goes through initial accelerated improvement, then diminishing improvement, then slow improvement. -S-curves in technology diffusion and s-curves in technology performance are fundamentally the same process. -The s-curves flatten when the cost of each marginal improvement increases and diminishing returns to effort begin to set in.

The s-curves flatten when the cost of each marginal improvement increases and diminishing returns to effort begin to set in.

An innovation can be competence enhancing for one firm, while competence destroying for another.

True

It is possible for a firm that follows an s-curve model too closely to end up switching technologies later than it should.

True

S-curves in technology performance and s-curves in technology diffusion are fundamentally different processes.

True

S-curves of technology diffusion are in part a function of the s-curves in technology improvement.

True

Technology trajectories are most often used to represent the technology's rate of performance improvement or its rate of adoption in the marketplace.

True

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.

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? -Firms cannot influence the shape of the s-curve through their developmental activities. -Unexpected changes in the market can alter the shape of a technology's s-curve. -S-curve models cannot be applied in the pharmaceutical industry. -S-curve models are outdated and unrealistic.

Unexpected changes in the market can alter the shape of a technology's s-curve.