Wk 4 - Practice: Ch. 7, Business Strategy: Innovation [due Day 5]

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

crossing the chasm

During the growth stage of the industry life cycle, ______ increases rapidly.

demand

A firm that successfully leverages network effects can ___.

push its industry into the growth stage

It is challenging for firms to "cross the chasm" because ______.

each stage of the industry life cycle features a different group of customers with different preferences and demands

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

innovation

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

True

Entrepreneurs innovate by ______.

commercializing new ideas and inventions

Which of the following are types of innovation?

disruptive. radical. incremental. architectural.

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

entrepreneurship

The ______ identifies how industries tend to develop and change over time.

industry life cycle

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

pipeline

True or false: Innovation can create value for one firm while destroying value for another.

true

In the maturity stage of the industry life cycle, industry growth ______.

flattens or even declines

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

all but the most efficient firms

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

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

Which of the following statements about platform businesses is true?

They can grow faster than pipeline businesses.

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

the long tail

Place the four steps of the innovation process in order from first to last. Place the first step at the top. Imitation Idea Invention Innovation

1. Idea 2. Invention 3. Innovation 4. Imitation

Which statement describes the long tail?

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

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

False

What is the relationship between innovation and competitive advantage?

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

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

It has accelerated dramatically.

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

It is the traditional system of horizontal business organization.

Which of the following statements about the maturity stage of the industry life cycle is true?

Only a few large firms remain.

Which of the following are advantages of platform businesses compared to pipeline businesses?

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

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

architectural

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

architectural innovation

During the decline stage of the industry life cycle, product innovation efforts ______.

come to a halt

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

decline

The stage during which a new product has gained some acceptance, thus causing first-time buyers to eagerly acquire the product and accelerate demand, is the ______ stage.

growth

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

incremental

Which type of innovation applies to existing markets and existing technologies?

incremental

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

innovation

Which are the four steps of the innovation process?

invention. innovation. imitation. idea.

Increases in the value of a product or service that result from a corresponding increase in the number of users are known as ___.

network effects

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

platform business

Innovation can ______. (Select all that apply.) provide firms with a competitive advantage. only be achieved by government agencies. never be a basis for competitive advantage. make existing products or businesses obsolete.

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

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

shakeout