MKT 3360 - Product Innovation Management II

Which of the following is a general term that can refer to any type of relationship between firms?

Alliance

_____ refers to a contractual arrangement whereby one organization or individual obtains the rights to use the proprietary technology of another organization or individual. Hedging Narrowcasting Licensing Sandbagging

Licensing

Yves Doz and Gary Hamel state that it is useful to categorize a firm's alliance strategy along two dimensions. Match the aspects that are involved in the first dimension (in the left column) with their descriptions (in the right column). Capability complementation Capability transfer

Pooling the capabilities and other resources of partner firms, but not necessarily moving those resources between the partners Exchange of capabilities across firms in such a manner that partners can internalize the capabilities and use them independently of the particular development project

_____ are not typically patentable, but they can be protected by copyright.

Printed materials

Identify the likely reasons firms choose not to collaborate with other firms. (Check all that apply.)

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. They think that solo development efforts are key to building and renewing their capabilities.

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

_____ 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

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.)

Reproducing the work in phonorecords or copies Exhibiting the work publicly

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.

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.

After licensing a technology, a firm typically has limited discretion over what it can do with the technology.

True

Collective research organizations can take the form of trade associations.

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

_____ are legally binding contractual arrangements to ensure that partners are fully aware of their rights and obligations in the collaboration and have legal remedies available if a partner should violate the agreement.

Alliance contracts

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.

Which of the following are types of governance mechanisms firms use to manage their collaborative relationships? (Check all that apply.)

Equity ownership Alliance contracts

A firm cannot collaborate with its competitor.

False

A firm's effectiveness at managing its collaborations will increase with the number of collaborations to which it is committed.

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

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.

False

Licensing a technology from another firm is typically more expensive for a licensee than developing a new technology in-house.

False

Solo internal development is, on average, a relatively fast and inexpensive way of developing a technology.

False

True or false: Alliances formed between firms must be long term and must include formally contracted agreements.

False Alliance is a general term that can refer to any type of relationship between firms. Alliances may be short or long term and may include formally contracted agreements or be entirely informal in nature.

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.

Identify the true statements about a strategic alliance between two or more firms. (Check all that apply.)

It can involve an equity investment made by the partners in each other. It is allowed to be a long-term or a short-term agreement.

Which of the following statements is true of outsourcing?

It carries a risk of proprietary technology being expropriated by the contract manufacturer.

Match the types of governance mechanisms that are used by a firm to manage its collaborative relationship with another firm (in the left column) with their features (in the right column). An alliance contract Equity ownership Relational governance

It contains information about what each partner is obligated to contribute to the collaboration, including money, services, equipment, intellectual property, and so on. 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. 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 statements is true of contract manufacturing?

It enables a firm to tap the greater economies of scale.

Which of the following is an advantage of collaborating?

It gives firms more flexibility.

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.

Match the types of governance mechanisms a firm uses to manage its collaborative relationship with another firm (in the left column) with their descriptions (in the right column). An alliance contract Equity ownership Relational governance

It is a legally binding contractual arrangement that ensures that the partners are fully aware of their rights and obligations in the collaboration and have legal remedies available if a partner should violate the agreement. It refers to each partner contributing capital and owning a specified right to a percentage of the proceeds from the alliance. It refers to self-enforcing norms based on goodwill, trust, and reputation of the partners.

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.

Match the categories of patents in the United States (in the left column) with their descriptions (in the right column). A utility patent A design patent

It is applicable to a new and useful process, machine, manufactured item, or combination of materials. It is applicable to an original and ornamental schema of a manufactured item.

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.

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 lets the firm retain total control over how its technology is developed and used. It provides the firm with great potential to leverage its existing competencies.

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 generate a desirable result, solve an issue, improve on or propose a new use for an existing development, or show potential of doing so. It must not be obvious.

In the context of the ways of protecting intellectual property, identify the true statements about a patent. (Check all that apply.)

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. It protects a process, machine, manufactured item, or variety of plant.

Which of the following statements are true about the Paris Convention for the Protection of Industrial Property? (Check all that apply.)

It offers the right of priority for patents and trademarks. It allows an inventor who patents an invention in one of the member countries to publicly disclose information about that invention without losing the right to patent the invention in the other countries.

Which of the following statements are true about a strategic alliance between two or more firms? (Check all that apply.)

It often does not have the shared language, routines, and coordination that facilitate the transfer of knowledge. It is used to enable the partners to learn from each other and develop new competencies.

Match the ways of protecting intellectual property (in the left column) with their descriptions (in the right column). 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.

Match the factors that can influence how well suited partner firms of a collaborative arrangement are to each other (in the left column) with their descriptions (in the right column). Resource fit Strategic fit

It refers to the degree to which the firms have assets that can be effectively integrated into a strategy that creates value. It is the degree to which partners have compatible styles and objectives.

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 requires member countries to provide the same protection to both its own citizens and foreign nationals. It states a minimum level of copyright protection for all member countries.

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.

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

An organization's unique previous experience or talent pool may give it a foundation of technical know-how that its competitors do not possess. Match the types of this knowledge (in the left column) with their descriptions (in the right column). Tacit knowledge

Knowledge that cannot be readily codified or transferred in written form

An organization's unique previous experience or talent pool may give it a foundation of technical know-how that its competitors do not possess. Match the types of this knowledge (in the left column) with their descriptions (in the right column). Tacit knowledge Socially complex knowledge

Knowledge that cannot be readily codified or transferred in written form Knowledge that arises from the interaction of multiple individuals

Identify true statements about a licensing agreement between two firms. (Check all that apply.)

Licensing a technology from the licensor is typically much cheaper for the licensee than developing a new technology in-house. Through licensing, the licensee is enabled to rapidly acquire a technology (or other resource or capability) it does not possess.

Which of the following are not typically patentable? (Check all that apply.)

Merely altering the size of a device that already exists Making something more transportable Changing an item's shape

Identify a true statement about patenting an invention.

Patent protection lasts for 20 years in most countries.

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.

Which of the following statements are true about a trademark? (Check all that apply.)

Registration of a trademark provides public notice of the registrant's claim of ownership over the mark. The protection offered by the registration of a trademark in the United States starts from the date of filing.

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

_____ refers to the degree to which partners have compatible objectives and styles.

Strategic fit

Which of the following is a treaty that governs the System of International Registration of Marks?

The Madrid Protocol

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

_____ 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

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.

Resource fit is one of the factors that can influence how well suited partner firms of a collaborative arrangement are to each other. In this context, match the types of collaborations (in the left column) with their features (in the right column). Collaborations based on the combination of complementary resources Collaborations based on the combination of supplementary resources

The collaborations are motivated by the requirement to access resources a partner firm does not possess. 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.

Arrange the steps typically involved in the process of applying for a patent under the Patent Cooperation Treaty, or PCT, in the correct order of occurrence. (Place the first step at the top.)

The inventor applies for the patent to a PCT governmental receiving office. A PCT governmental searching office performs and completes the patent search for the application. A PCT governmental office evaluates the patentability of the invention subject to the standards of the PCT.

Arrange the steps involved in obtaining a patent for an invention in the United States in the correct order of occurrence. (Place the first step at the top.)

The inventor describes in the application how to make and use the invention and makes claims about what it does that makes it a new invention. The application is reviewed by a patent examiner who may revise the scope of the claims made by the patent. The patent is published for a period in which other inventors can object to the patent grant. The patent is granted if the standards for patentability are met.

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

Identify the true statements about a trademark. (Check all that apply.)

The rights to a trademark do not require registration and are established in the legitimate use of the mark in most countries. Trademark rights may not be used to prevent others from producing the same goods under a clearly different mark.

Identify the true statements about joint ventures. (Check all that apply.)

They often result in establishment of a new separate entity. They are a specific type of strategic alliance that entails significant structure and commitment.

Which of the following types of work cannot be typically copyrighted in the United States? (Check all that apply.)

Titles Familiar symbols Short phrases

What is a "patent troll" company's primary purpose in owning patents?

To extort money from other companies

Firms can use strategic alliances to exploit their own capabilities by leveraging them in another firm's development efforts.

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

Modular products become more valuable when customers have heterogeneous demands and there are diverse options for meeting them.

True

Product life cycles shorten with high-speed technological changes.

True

Some firms avoid collaboration for fear of giving up their proprietary technologies.

True

The pooling of supplementary resources can enable partners to achieve market power or economies of scale.

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: 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

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

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.

Match the tools that a firm can use to assess its potential partners (in the left column) with the corresponding questions that need to be asked by the firm (in the right column). Assessing the collaboration's effect on the firm's opportunities and threats Assessing the collaboration's effect on the firm's internal strengths and weaknesses Assessing the collaboration's effect on the firm's strategic direction

Would the collaboration affect the availability of complementary goods or the threat of substitutes? Would the collaboration enhance or leverage the core capabilities of the firm? Are the collaboration's objectives likely to change over time?

Match the tools that can be used by a firm to evaluate its potential partners (in the left column) with the corresponding questions that need to be asked by the firm (in the right column). Assessing the collaboration's effect on the firm's opportunities and threats Assessing the collaboration's effect on the firm's internal strengths and weaknesses Assessing the collaboration's effect on the firm's strategic direction

Would the collaboration affect the firm's position vis-à-vis its rivals? Is the collaboration likely to result in a position of competitive advantage that is difficult for competitors to imitate? Is the collaboration likely to assist the firm in closing any resource or technology gap between where it is now and where it would like to be?

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 _____.

appropriability

Combining the capabilities and other resources of partner firms but not necessarily transferring those resources between the partners is referred to as _____.

capability complementation

In the context of outsourcing, the process of a firm hiring another firm (often a specialized manufacturer) to manufacture its products is known as

contract manufacturing

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

Usually, the appropriability of a firm's innovation is determined by _____.

how quickly or easily competitors can copy the innovation

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)

joint venture

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

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

A contractual arrangement whereby one organization or individual obtains the rights to use the proprietary technology of another organization or individual is called _____.

licensing

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

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

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

patent thickets

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 trolling

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

Self-enforcing norms based on goodwill, trust, and reputation of partners are known as _____.

relational governance

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

Information that belongs to a business that is held private is known as a(n)

trade secret

In the context of the ways of protecting intellectual property, a logo on a product is an example of a _____.

trademark

When technology is progressing rapidly, firms are more likely to:

use linkages with other specialized firms to access resources they do not possess.