MGT 301 Ch. 7

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Incumbent firms prefer to focus on incremental innovations which reinforce their established organizational structure and power distribution and avoid radical innovation that could disrupt their existing power distribution. This is known as A) organizational inertia. B) organization culture. C) organizational design. D) organization complexity.

A

What is an invention? A) the transformation of an idea into a new product or process B) a unique idea that has not been thought of before C) the transformation of an idea into a successful product D) a unique idea that has been patented

A

Which of the conditions prevail when an industry is at the end of its life cycle? A) The level of process innovation reaches its maximum as firms attempt to lower cost. B) The industry structure is perfectly competitive with a large number of buyers and sellers. C) The strategic objectives of businesses will involve gaining market acceptance. D) The market reaches its maximum size at this stage.

A

Which of the following customer segments as described in the chasm framework make up the mass market? A) the early and late majority together B) the early adopters alone C) the technology enthusiasts and laggards together D) the technology enthusiasts alone

A

The leading producer of cell phone backup batteries, Progyny, has achieved great success because they produce high-quality battery backups that are not too expensive. Even so, another company that produces lower-quality batteries at the same price has also achieved some success, but not as much as Progyny. Also, in general, the price of backup batteries has declined because of economies of scale and learning. In addition, Progyny has added complementary assets, such as a carrying case. Considering all of these factors, the backup battery industry is most likely in the ________ stage. A) introduction B) growth C) shakeout D) maturity

B

The typical four-step innovation process begins with A) the modification and recombination of an existing product or process. B) the presentation of an idea as findings derived from basic research. C) the commercialization of an invention by entrepreneurs. D) a competitor's attempt to imitate an innovation.

B

Which of the following is a feature of the maturity stage of the industry life cycle? A) The competitive intensity within the industry is at its peak. B) The market reaches its maximum size. C) The industry structure is more monopolistically competitive. D) The focus on product innovation is higher than that on process innovation.

B

Which of the following scenarios best exemplifies a platform business? A) Jill purchases electronic parts from a variety of vendors and assembles them into inexpensive MP3 players that he sells to consumers. B) Samantha operates an industrial test kitchen in which local growers bring their produce to local chefs, who use the kitchen to try new recipes and determine which produce to buy. C) Tony operates a consulting firm in which businesses hire him to assess deficiencies in their organizational culture. D) Allison founded a bike-based transportation company that offers environmentally-friendly rides to customers within a 25-mile radius.

B

When a firm uses the tools and concepts learned from strategic management in order to achieve competitive advantage by pursuing innovation, it is said to be engaging in A) a short-term strategy. B) strategic invention. C) a strategic venture. D) strategic entrepreneurship.

D

Which of the following businesses is most susceptible to negative network effects? A) Lite Shoes produces a line of lightweight running shoes that are endorsed by an Olympic gold medalist. B) Chips & Boards Technologies produces computer processing chips and sells them to a variety of manufacturers for use in smartphones and other devices. C) ECO Tools manufactures solar powered gardening implements and sells them online. D) Rite Pics is a social media platform where users upload photos to the site and are matched with other users who have taken similar photos.

D

Which of the following is a competitive benefit experienced by the first-mover firm in an industry? A) The first mover will be able to achieve a less steep learning curve. B) The first mover will be able to reduce the switching costs. C) The first mover will not have to patent its products or technology. D) The first mover will be able to reduce costs through economies of scale.

D

Why is the phase after the growth stage of the industry life cycle referred to as the shakeout stage? A) The barriers to entry increase during this stage. B) The firms in the industry yield the highest profits during this phase .C) Rivalry among competitors decreases in this stage. D) The weaker firms are forced out of the industry in this stage.

D

he vast majority of innovations in an industry are ________, because they build on a firm's existing knowledge base and reinforce the existing organizational structure and network relationships. A) disruptive B) architectural C) radical D) incremental

D

Process innovation typically overtakes product innovation in importance during the shakeout stage of the industry life cycle.

true

Which of the following is a feature of the growth stage of the industry life cycle? A) The consumer demand increases. B) The prices of goods begin to rise. C) The basis of competition moves away from process innovation. D) The number of competitors decreases.

A

Which of the following is not true about the decline stage of an industry life cycle? A) Firms that consolidate by purchasing their rivals will find themselves at a disadvantage. B) There is generally excess industry capacity during the decline stage. C) The last consumer segment called "laggards" will finally enter the market. D) Inefficient firms will usually exit the industry.

A

Which of the following lists the stages of the industry life cycle in the correct order? A) introduction, growth, shakeout, maturity, and decline B) introduction, shakeout, growth, maturity, and decline C) introduction, growth, maturity, shakeout, and decline D) introduction, shakeout, maturity, growth, and decline

A

disruptive innovation leverages ________ technologies, while architectural innovations are based on ________ technologies. A) new; existing B) existing; novel C) drastic; new D) required; established

A

Which of the following is a drawback of using the industry life cycle as a framework to guide strategic choice? A) The framework believes that the life cycle of industries is unpredictable. B) The framework does not explain everything about changes in industries. C) The framework is based on the tenet that industries can be rejuvenated even in the declining stage. D) The framework believes that the number and size of competitors remain constant throughout the life cycle.

B

A(n) ________ leverages new technologies to attack existing markets. A) disruptive innovation B) incremental innovation C) radical innovation D) architectural innovation

A

After the creation of social networking websites were introduced, their value increased exponentially as the number of users increased. This is the positive effect of a(n) A) network effect. B) confirmation effect. C) impression management effect. D) user effect.

A

Fulcrum Feet is a manufacturer of athletic shoes. It has released an improved version of its premier running shoe in markets in which the company already operates. Which of the following types of innovations does this scenario best illustrate? A) radical innovation B) incremental innovation C) architectural innovation D) disruptive innovation

B

Generally, as the level of ________ innovation declines, the level of ________ innovation increases. A) process; product B) product; process C) process; incremental D) product; radical

B

On which of the following tenets is the crossing-the-chasm framework, suggested by Geoffrey Moore, based? A) The number and size of competitors remain constant throughout the industry life cycle. B) Each stage of the industry life cycle is dominated by a different customer group. C) Industries tend to follow an unpredictable industry life cycle. D) The supply and demand sides of the market remain constant irrespective of the phase of the industry life cycle.

B

The key objective for firms during the growth phase is to A) invest as many resources as possible in product innovations. B) stake out a strong strategic position not easily imitated by rivals. C) pursue a harvest strategy. D) reduce their network effects.

B

The strategic objective of a first mover during the introduction stage of the industry life cycle is to A) pursue a harvest strategy. B) survive by drawing on deep pockets. C) achieve market acceptance. D) lower entry barriers.

C

A firm's resistance to changes in the status quo is referred to as A) organizational parity. B) organizational liquidity. C) organizational inertia. D) organizational efficacy.

C

In a radical innovation, a firm targets A) existing markets by using new technologies. B) new markets by using existing technologies. C) new markets by using new technologies. D) existing markets by using existing technologies.

C

Karat Packaging has entered a stage in which the demand for their innovative fax machines has declined. Now most customers are buying replacement parts or buying their second fax machine from the firm. What stage in the industry life cycle does this scenario describe? A) growth stage B) maturity stage C) shakeout stage D) decline stage

C

When firms innovate by leveraging existing technologies into new markets, they are said to be involved in A) incremental innovations. B) radical innovations. C) architectural innovations. D) disruptive innovations.

C

Which of the following is a feature of the shakeout phase of the industry life cycle? A) There is rapid industry growth during this stage. B) Market demand in this stage primarily consists of first-time adopters. C) Competitive intensity within the industry increases. D) The mode of competition shifts from price to nonprice in this stage.

C

Which of the following is not an advantage when it comes to "first-mover advantages"? A) First movers may be able to lock-in key suppliers. B) First movers may benefit from network effects. C) First movers must educate potential customers about the product. D) First movers may hold important intellectual property such as critical patents.

C

Which of the following most accurately describes a difference between incremental innovation and radical innovation? A) Incremental innovation researches new materials; radical innovation researches new processes. B) Incremental innovation targets new markets and technologies; radical innovation reinvents markets and technologies. C) Incremental innovation builds on an established knowledge base; radical innovation uses an entirely different knowledge base. D) Incremental innovation draws on novel methods; radical innovation draws on proven methods.

C

t is important for a firm to win over the early majority section of the market to ensure the commercial success of an innovation because they A) are driven by technology concerns rather than the practicality of a new product. B) influence the purchase decisions of early adopters. C) enter into the market in large numbers, creating a herding effect .D) have the highest purchasing power when compared to the other customer segments.

C

Digital photography replacing film photography is an example of which type of innovation? A) incremental B) architectural C) radical D) disruptive

D

The four-step innovation process ends with A) idea generation. B) invention. C) idea testing. D) imitation.

D

Innovation that targets new markets with existing technologies is known as disruptive innovation.

false

Network effects always lead to a virtuous cycle in which an increasing number of customers improves the quality of a product or service, thereby attracting more customers and continuing the cycle.

false

Product innovation is more strategically important than process innovation while a firm is in the growth stage of the industry life cycle.

false

Social entrepreneurs forego the pursuit of profits to achieve social and environmental goals.

false

According to the crossing-the-chasm framework, the biggest chasm between customer segments is between early adopters and the mass market made up of the early majority and the late majority.

true

Platform business models are not organized as traditional linear pipeline business models.

true


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