Quiz 13 Types of innovation

General Electric (GE) disrupted itself in the healthcare industry (Strategy Highlight 7.2) by:

introducing inexpensive and smaller diagnostic devices in developing countries.

ModelLife Electronics Inc. is a company that builds diagnostic devices. It was the first company to develop a compact MRI scanner by reconfiguring the components of the MRI technology. This smaller and user-friendly version of the huge MRI scanner created demand from small hospitals, nursing homes, and private practice doctors who were earlier dependent on the scanning machines in large hospitals. Which of the following types of innovations does this scenario best illustrate

Architectural innovation

Which of the following is true of a disruptive innovation?

It targets existing markets.

Why is it easier for new entrants to develop radical innovations when compared to incumbent firms?

Unlike incumbent firms, new entrants do not have formal organizational structures and processes.

When firms innovate by leveraging existing technologies into new markets, they are said to be involved in _____.

architectural innovations

A(n) _____ leverages new technologies to attack existing markets.

disruptive innovation

When Japanese carmakers attacked the existing U.S. automobile market by first offering small fuel-efficient cars, and then leveraging their low-cost and high-quality advantages into high-end luxury segments, they were engaging in _____.

disruptive innovation

Intel's Celeron chip and Atom chip are initiatives to:

guard the company against disruptive innovation by protecting the low end of the market.

A factor favoring the success of disruptive innovation is that:

incumbent firms are slow to change.

In a radical innovation, a firm targets:

new markets by using new technologies.

Incumbent firms favor incremental innovation over radical innovation because:

radical innovation tends to disrupt the existing power distribution within the firms.