MGMT 4300

Which statement best describes the speed of innovation over the past hundred years? A. It has been relatively stagnant B. It has grown at a slow but steady pace C. It has increased moderately D. It has accelerated dramatically

D. It has accelerated dramatically

The chasm framework curve is ______________ shaped

bell

Describe aspects of the Decline stage of the industry life cycle

- market size decreases further - innovation (product and process) cease

Describe aspects of the Introduction phase of the industry life cycle

- objective to achieve market acceptance and seed future growth - core competency is R&D - capital intensive - high barrier to entry - initial market size is small - growth is slow

Describe aspects of the Shakeout stage of the industry life cycle

- rate of growth declines - firms begin to compete directly with each other - weaker firms are ousted - price becomes a more competitive weapon

List the 4 types of innovation

1. Architectural 2. Radical 3. Incremental 4. Disruptive

How do firms respond to disruptive innovation?

1. Continue to innovate to stay ahead of the competition 2. Guard against disruptive innovation by protecting the low end of the market 3. Disrupt yourself rather than waiting for someone to disrupt you

At the end of an industry's life cycle (decline stage) what options are leaders left with?

1. Exit 2. Harvest 3. Maintain - still markets 4. Consolidate - buys rivals

List the reasons for the increasingly rapid technological diffusion and adoption

1. initial innovations provided the necessary infrastructure for newer innovations to diffuse more rapidly 2. Emergence of new business models that make innovations more accessible

In order to be patented, an invention must be what?

1. useful 2. novel 3. non-obvious

How long do patents last?

20 years from the from the filing date of the patent application

The "chasm" found between customer segments is found between which two segments?

Early adopters and early majority

New ways to produce existing products or deliver existing services

Process innovations

New or recombined knowledge embodied in new products

Product innovations

The industry life-cycle model follows an __________ curve

S

long tail

business model in which companies can obtain a large part of their revenues by selling a small number of units from among almost unlimited choices

"Technology" refers to the methods and materials used to achieve a ___________________ advantage

commercial

Innovation concerns the _____________________ of an invention

commercialization

What are first-mover advantages?

competitive benefits that accrue to the successful innovator

Platform owner

controller of a platform IP and arbiter of who may participate and in what ways

Conceptual model that shows how each stage of the industry life cycle is dominated by a different customer group

crossing-the-chasm framework

Innovation describes the ______________, _______________, and _________________ of new knowledge in a four step process captured in the four I's.

discovery, development, transformation

The customers entering the market in the growth stage of the industry life cycle that are eager to buy early into a new technology or product concept. Their demand is driven by recognizing and appreciating the possibilities the new technology can afford them in their professional and personal lives

early adopters

Customers coming into the market during the shakeout stage of the industry life cycle. Pragmatists who are mainly concerned with whether or not adopting a new technological innovation serves a practical purpose or not.

early majority

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 commercialization of any new product or process, or the modification and recombination of existing ones

innovation

What is the primary factor in avoiding creative destruction

innovation

The transformation of an idea into a new product or process, or the modification and recombination of existing ones

invention

Customers entering the market in the declining stage of the industry life cycle. Will adopt a new product only if absolutely necessary, generally don't want new technology, and are generally not a customer segment worth pursuing.

laggards

Customers entering the market in the maturity stage of the industry life cycle that are less confident about their ability to master new technology. Will wait until standards have emerged and become firmly entrenched so as to ensure reduction in uncertainty. Tend to buy from well-established firms with a strong brand image

late majority

winner-take-all markets

markets where the market leader captures almost all of the market share and is able to extract a significant amount of the value created

The pursuit of social goals while creating profitable businesses

social entrepreneurship

The pursuit of innovation using tools and concepts from strategic management.

strategic entrepreneurship

A customer segment in the introductory stage of the industry life-cycle. Often have an engineering mind-set and pursue new technology proactively, frequently seeking out new products before they are officially introduced to the market

technology enthusiasts

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

The shakeout stage of the industry life cycle is dominated by ______.

the early majority

Network effects

the positive effect (externality) that one user of a product or service has on the value of that product for other users ( example: increase in value of a product that results from a corresponding increase in the number of users)

What are the three reasons why firms become incumbents and newer firms create radical innovations?

1. economic incentives 2. organizational inertia 3. innovation ecosystem

3 Qualities of a platform business

1. enables value-creating interactions between external producers and consumers 2. The platform's overarching purpose is to consummate matches among users and facilitate the exchange of goods, services, or social currency, thereby enabling value creation for all participants 3. The platform provides an infrastructure for these interactions and sets governance conditions for them

List the four steps of the innovation process in order

1. idea 2. invention 3. innovation 4. imitation

Describe aspects of the Maturity stage of the industry life cycle

- industry structure morphs into an oligopoly - demand made up of replacement or repeat purchases - market has reached maximum size - competitive intensity increases further - process innovation reaches maximum - incremental product innovation sinks to its minimum

Describe aspects of the Growth stage of the industry life cycle

- market growth accelerates - demand increases rapidly - standards are set (including business processes) - production costs fall (economies of scale) - competition moves from product innovation to process innovation - core competencies shift toward marketing and manufacturing capabilities

Moving from the traditional pipeline business to a platform business model implies three important shifts in strategy focus. What are they?

1. From resource control to resource orchestration 2. From internal optimization to external interactions 3. From customer value to ecosystem value

What are the five stages of the industry life cycle?

1. Introduction 2. Growth 3. Shakeout 4. Maturity 5. Decline

Advantages of the platform business model

1. Scale more efficiently than pipelines by eliminating gatekeepers 2. Unlock new sources of value creation and supply 3. Benefit from community feedback

intrapreneurs

those pursuing corporate entrepreneurship

Valuable proprietary information that is not in the public domain and where the firm makes every effort to maintain its secrecy.

trade secret

The term used to describe innovators successfully moving to the next stage of the industry life cycle

Crossing the chasm

Producers

Creators of the platform's offerings

What is the harvest strategy?

A strategy where leaders reduce investments in product support and allocates only a minimum of human and other resources

Standards

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

radical innovation

An innovation that draws on novel methods or materials, is derived either from an entirely different knowledge base or from a recombination of the existing knowledge bases with a new stream of knowledge.

reverse innovation

An innovation that was developed for emerging economies before being introduced in developed economies. Sometimes also called frugal innovation.

Consumers

Buyers or users of the offerings

The vast majority of innovations are of what type?

Incremental

Providers

Interfaces for the platform

innovation ecosystem

a firm's embeddedness in a complex network of suppliers, buyers, and complementors, which requires interdependent strategic decision making

Patent

a form of intellectual property that gives the inventor exclusive rights to benefit from commercializing a technology for a specified time period in exchange for public disclosure of the underlying idea

architectural innovation

a new product in which known components, based on existing technologies, are reconfigured in a novel way to attack new markets

platform businesses

an enterprise that creates value by matching external producers and consumers in a way that creates value for all participants, and that depends on an infrastructure or platform that the enterprise manages

disruptive innovation

an innovation that leverages new technologies to attack existing markets from the bottom up

Incremental innovation

an innovation that squarely builds on an established knowledge base and steadily improves an existing product or service

How are standards set?

1. bottom-up through competition 2. top-down by government or standard-setting agencies

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?