4490 Chapter 7
Which of the following are characteristics of the early majority? (Check all that apply.) They are quick to commit to new products. They weigh benefits and costs carefully. They have a strong sense of practicality. They are not concerned with cost.
They weigh benefits and costs carefully. They have a strong sense of practicality.
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 business is true?
It creates value not only for the businesses but also for consumers.
Which of the following is most likely to produce a radical innovation?
a new sportswear company with a handful of employees that perform a number of loosely defined roles
The introductory stage of the industry life cycle is a ______-intensive process.
capital
The negative effect of innovative ride-sharing services, such as Uber and Lyft, on traditional taxi cab companies is an example of ______.
creative destruction
Successfully transitioning from one stage of the industry life cycle to the next is referred to as ______.
crossing the chasm
Educational organizations, such as Coursera, offer massive open online courses on the web as an alternative to traditional universities. This is an example of a(n) ______ innovation.
disruptive
In the maturity stage of the industry life cycle, industry growth ______.
flattens or even declines
At which stage of the industry life cycle does the size of the market expand rapidly?
growth
During which stage does a standard develop?
growth
Which are the four steps of the innovation process? imitation instigation idea innovation imagination invention
imitation idea innovation invention
The most common type of innovation is ______ innovation.
incremental
The ______ identifies how industries tend to develop and change over time.
industry life cycle
Which of the following is a primary factor in avoiding creative destruction?
innovation
Creating new products out of new or existing ideas is known as ______.
invention
Tomas recently acquired a cell phone but only because his company insisted that he do so. Tomas likely belongs to which of the following consumer segments?
laggards
Which customer segment will only adopt a new product when it becomes absolutely necessary?
laggards
Most firms consider laggards to be ______.
not worth the effort of pursuing
The business structure that is linear and has producers at one end and consumers at the other is known as a(n) ______.
pipeline
New methods for producing existing products or delivering existing services are known as ______.
process innovations
A firm that successfully leverages network effects can ___.
push its industry into the growth stage
During the introductory stage of the industry life cycle, innovators will likely devote most of their time, money, and effort to ______.
research and development
In which stage of the industry life cycle does competition become more intense, forcing weaker firms out of the industry?
shakeout
The shakeout stage of the industry life cycle is dominated by ______.
the early majority
Place the four steps of the innovation process in order from first to last.
1. idea 2. invention 3. innovation 4. imitation
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
Which of the following are types of innovation? (Check all that apply.) disruptive radical architectural incremental harvest consolidation
disruptive radical architectural incremental
Which of the following are advantages of platform businesses compared to pipeline businesses? (Check all that apply.) They scale efficiently by eliminating gatekeepers. They benefit from community feedback. They own and control all their resources. They unlock new sources of value creation and supply.
They scale efficiently by eliminating gatekeepers. They benefit from community feedback. They unlock new sources of value creation and supply.
One of the largest customer segments of the market that includes customers who research the product, wait until new-product kinks have been resolved, and purchase from well-established companies is ______.
the late majority
Introducing a new technology to an existing market to better address consumer needs is known as ______ innovation.
disruptive
Which of the following is an example of invention?
Apple combining smart phone and wristwatch technologies to create the Apple Watch
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.
Using known components, based on existing technologies, in a new configuration to create a new market is known as ______.
architectural innovation
Which statement describes the long tail?
A large amount of revenue derived from a small number of units among almost unlimited choices
What is the relationship between innovation and competitive advantage?
Innovation is a powerful weapon for gaining and maintaining competitive advantage.
Which of the following statements about platform businesses is true?
They can grow faster than pipeline businesses.
True or false: Industries often tend to follow a predictable industry life cycle.
True
True or false: Innovation can create value for one firm while destroying value for another.
True
True or false: The chasm separating the early adopters from the early majority is the largest.
True
During the shakeout stage of the industry life cycle, profits degrade for ______.
all but the most efficient firms
What does the innovation process begin with?
an idea
The type of innovation that focuses on improving an existing product by using existing technology and targeting existing markets is a(n) ______ innovation.
incremental
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
It is common for firms to get their start by introducing a(n) ______ innovation.
radical
Which of the following statements about the maturity stage of the industry life cycle is true?
Only a few large firms remain.
Which customer segment dominates the market growth stage of the industry life cycle?
early adopters
Entrepreneurs innovate by ______.
commercializing new ideas and inventions
Demand declines most rapidly in the ______ stage of the industry life cycle.
decline
In the ______ stage of the industry life cycle, falling demand leads to a reduction in market size.
decline
During the growth stage of the industry life cycle, ______ increases rapidly.
demand
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
Customers who desire a product because it stokes their imagination and creativity are known as ______.
early adopters
According to the crossing-the-chasm framework, the largest difference in consumer expectations is between ______.
early adopters and the early majority
Taking on an economic risk in order to innovate is known as ______.
entrepreneurship
The process in which change agents create new products or processes at significant economic risk is known as ______.
entrepreneurship
Which type of innovation applies to existing markets and existing technologies?
incremental
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
Innovation can ______. (Select all that apply.). 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 provide firms with a competitive advantage
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
Because it targeted a new market and used new technologies, the first mass-produced automobile is considered a(n) ______ innovation.
radical
Innovations that target NEW markets and represent a major break from existing technologies or ways of thinking, such as the digital camera, the touch-screen smart phone, or the decoding of the human genome, are examples of ______ innovations.
radical
An agreed-upon solution about a common set of engineering features and design choices is known as a ______.
standard
In the ______ stage of the industry life cycle, a few number of large firms compete for a share of a market that has reached its maximum size.
maturity
A company that resists change and sticks to formalized business processes and structures is likely experiencing ______.
organizational inertia
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
The customer segment known as ______ enjoy testing product prototypes and providing voluntary feedback that companies use to perfect their products.
technology enthusiasts
Which is the most common customer segment in the introductory stage of the industry life cycle?
technology enthusiasts
DaShawn likes to do a lot of research before he buys a new product and relies on the endorsement by others. He also wants to be sure the product will be practical. DaShawn is likely a member of which type of customer?
the early majority
Which two customer segments make up the largest percentage of the market potential? (Check all that apply.) the early majority the late majority laggards technology enthusiasts early adopters
the early majority the late majority
A significant difference between the early majority and the late majority is that ______.
the late majority is not confident in using new technologies
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
Which of the following are ways in which standards can emerge? (Check all that apply.) by letting consumers vote for their preferred standard by having firms purchase the license for a standard through market competition by being imposed by government or other agencies
through market competition by being imposed by government or other agencies