Management 428 Chapter 7

Because it targeted a new market and used new technologies, the first mass-produced automobile is considered a(n) ______________ innovation.

radical

What can incumbent firms do to counter disruptive innovations? 1) disrupt themselves 2) focus on the high end of the market 3) listen closely to their most important customers 4) continue to innovate 5) protect the low end of the market

1, 4, 5

First-move disadvantages can include which of the following? 1) the need to educate potential custoemrs about the product's benefits 2) the need to compete on price instead of product features 3) the need to find distribution channels 4) the need to continuously perfect a product

1, 3, 4

Innovation can ______________. 1) provide firms with a competitive advantage 2) only be achieved by government agencies 3) never be a basis for competitive advantage 4) make existing products or businesses obsolete

1, 4

Which of the following are types of innovation? 1) consolidation 2) architectural 3) harvest 4) incremental 5) disruptive 6) radical

2, 4, 5, 6

It is challenging for firms to "cross the chasm" because ____________. A) transitioning between stages requires significant amounts of capital B) each stage of the industry life cycle features a different group of customers with different preferences and demands C) firms are not able to deal with the technological challenges required D) firms have difficulty moving from process to product innovation

B

Which of the following statements about the maturity stage of the industry life cycle is true? A) the market has many competitors, each competing for a piece of the pie B) only a few large firms remain C) demand for the product increases D) product innovation becomes the most important competitive weapon

B

In the _________ stage of the industry life cycle, falling demand leads to a reduction in market size.

decline

During the growth stage of the indisutry life cycle, _____________ increases rapidly.

demand

The introductory stage of the industry life cycle is a __________-intensive process.

capital

Which of the following is an example of invention? A) Apple combining smart phone and wristwatch technologies to create the Apple Watch B) McDonald's cutting items from its dollar menu C) Nike rereleasing an exact replica of a popular sneaker from the 1980s D) Walmart increasing the number of local and organic products in its stores

A

The primary objective of the firms during the introductory stage of the industry life cycle is to ______________. A) establish themselves as market participant and position themselves for future growth B) develop complementary products to increase market visibility C) refine existing distribution channels and standards D) produce large quantities for mass distribution

A

During the growth stage of the industry life cycle, firms focys on process innovation in order to ________________. 1) increase production volume 2) improve customer service 3) generate new product ideas 4) reduce per-unit production costs

1, 4

Which of the following are ways in which standards can emerge? 1) by being imposed by government or other agencies 2) by having firms purchase the license for a standard 3) by letting consumers vote for their preferred standard 4) through market competiton

1, 4

Place the S-curve development of most industries in order.

-Demand for a new product is slow to take off -Demand accelerates -Demand decelerates -Demand turns to zero -Demand becomes negative as a market contracts

Which of the following are strategic options in the decline stage of the industry life cycle? 1) consolidate 2) maintain 3) harvest 4) exit 5) emerge 6) network

1, 2, 3, 4

Which of the following are advantages of platform businesses compared to pipeline businesses? 1) They scale more efficiently by eliminating gatekeepers 2) They are not constrained or influenced by community feedback 3) They unlock new sources of value creation and supply 4) They own and control all their resources

1, 3

Which of the following are strategic options in the decline stage of the industry life cycle? 1) maintain 2) emerge 3) harvest 4) consolidate 5) exit 6) network

1, 3, 4, 5

Which of the following are characteristics of the early majority? 1) they are quick to commit to new products 2) they have a strong sense of practicality 3) they weight benefits and costs carefully 4) they are not concerned with cost

2, 3

A distributive innovation is more likely to be successful if it ______________. A) captures the low end of the market first B) secures the interest of average users first and extends its reach both upward and downward C) simultaneously targets low and high end users D) attacks the market from the top down

A

Entrepreneurs innovate by ___________. A) commercializing new ideas and inventions B) limiting competition in a given market C) acquiring promising start-up companies D) increasing demand for existing products

A

Taking on an economic risk in order to innovate is known as ________________.

entrepreneurship

T or F: Platform businesses are organized as traditional linear pipelines.

false

Establising a solid strategic position that competitors cannot easily imitate is the key objective of a company in the _________stage.

growth

A firm that successfully leverages network effects can push its industry into the _____________.

growth stage

The tendency of customers to enter the market in karge numbers during the frowth stage of the industry life cycle is known as the ___________ effect.

herding

The innovation process is a four-step process that consists of idea, invention, innovation, and _____________.

imitation

What 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 ______________.

innvation

People who pursue entrepreneurship within an existing company are called ______________.

intrepreneurs

What are the stages of the industry life cycle?

introduction, growth, shakeout, maturity, decline

What customer segment will only adopt a new product when it becomes necessary?

laggards

A company that resists change and sticks to formalized business processes and structures is likely experienceing ______________.

organizational inertia

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

Which metrics are used by social entrepreneurs to evaluate performance?

profits, planet, people

PixelPower is a small app developer seeking to enter the highly competitive mobile games industry. In order to overcome the industry's barriers to entry and compete against incumbemt firms, PixelPower has an economic incentive to ________________.

pursue radical innovations

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

An agreed-upon solution about a common set of engineering features and design choices is known as a ______________.

standard

What type of entrepreneurship involves leveragin innovation for competitive advantage?

strategic entrepreneurship

What two customer segments make up the largest percentage of the market potential?

the early majority and late majority

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

all but the most efficient firms

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

In order for a product or serivce to be considered patentable, it must be _____________, ____________, and ____________.

useful, novel, non-obvious

The negative effect of innovative ride-sharing services, such as Uber and Lyft, on traditional taxi cab companies is an example of ____________.

creative destruction

The process by which word-processor manufacturer Wang Laboratories captured the market from typewriter manufactureres, and which explains how it was later replaced by PC maufactureres and mobile-phone companies, is known as ______________.

creative destruction

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

Simone was the first among her peers to try the new unicorn hair dye. For months she was the only person with unicorn hair. After some time, though, the product became available everywhere, and nearly every other person began sporting the unicorn hair, even Simone's mom. This situation describes which of the following? A) the shakeout stage of the industry life cycle B) process innvoation C) the crossing-the-chasm framework D) the exit strategic option of the industry life cycle

C

The primary objective of firms during the introductory stage of the industry life cycle is to ______________. A) develop complementary products to increase market visability B) refine existing distribution channels and standards C) estblish themselves as a market participant and position themselves for future growth D) produce large quantities for mass distribution

C

A significant difference between technology enthusiasts and early adopters is that ___________-. A) early adopters dominate the decline stage of the industry life cycle B) technology enthusiasts have much more disposable income C) early adopters are primarily interested in technical details rather than practical applications D) early adopters are interested in how a new technology will improve their lives, rather than in the details of the technology itself

D

An architectural innovation is ______________-. A) an innovation that draws on novel methods or materials and is derived from an entirely different knowledge base B) an innovation that leverages new technologies to attack existing markets from the bottom up C) an innovation that builds on an established knowledge base and steadily improves an existing product D) a new product in which existing technologies are used in a novel way to create new markets

D