MGT 491 Chapter 7

The best way for a firm to keep its proprietary technologies, recipes, or formulas secret is to obtain a patent.

False

On which of the following tenets is the crossing-the-chasm framework, suggested by Geoffrey Moore, based?

Each stage of the industry life cycle is dominated by a different customer group.

As a research scholar, Denise had built a helicam as part of her project. The helicam could capture aerial images. Realizing the potential use of this product in movie production and military and rescue operations, she started a new venture where she could customize these helicams to fit the specific needs of the buyers and sell them. Denise can be best described as a(n)

Entrepreneur

Briefly discuss the strategic implications of the crossing-the-chasm framework.

Essay Question

Define entrepreneurship. Who are entrepreneurs?

Essay Question

Why do incumbent firms favor incremental innovation over radical innovation?

Essay Questions

Which of the following is a drawback of using the industry life cycle as a framework to guide strategic choice?

The framework does not explain everything about changes in industries.

Which of the following businesses is most susceptible to negative network effects?

Pics Match is a social media platform where users upload photos to the site and are matched with other users who have taken similar photos.

CordKing Electronics 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?

Shakeout Stage

Which of the following is a feature of the growth stage of the industry life cycle?

The consumer demand increases.

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

True

While the domestic airline industry is in the maturity stage of the industry life cycle, the internet-enabled appliance industry is in its growth stage. Which of the following can be inferred from the given data?

While the domestic airline industry is mostly free from excess capacity, the internet-enabled appliance industry will have new entrants.

GoodGear is a mobile platform that matches independent fashion designers with consumers who want a personalized wardrobe. Which of the following initiatives would best allow GoodGear to fine-tune its offerings to better meet the needs of its consumers?

allowing users to provide feedback to producers on the style and fit of clothing

DigitalHealth Electronics Inc. is a company that builds diagnostic devices. It was the first company to develop a compact MRI scanner by reconfiguring the components of the MRI technology. This smaller and user-friendly version of the huge MRI scanner created demand from small hospitals, nursing homes, and private practice doctors who were earlier dependent on the scanning machines in large hospitals. Which of the following types of innovations does this scenario best illustrate?

architectural innovation

When firms innovate by leveraging existing technologies into new markets, they are said to be involved in

architectural innovations.

At the time when Ellen decided to purchase a tablet computer, the product had just become accessible to the mass market. She did not purchase the tablet until after she was convinced that the benefits it would offer her would far exceed its price. Also, she waited for her friends to try the product and popular gadget television shows to endorse it. Which of the following customer segments does Ellen best represent?

early majority

In which of the following stages of the industry life cycle is a standard first established?

growth stage

The leading producer of cell phone backup batteries, Jumpstart, 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 Jumpstart. Also, in general, the price of backup batteries has declined because of economies of scale and learning. In addition, Jumpstart has added complementary assets, such as a carrying case. Considering all of these factors, the backup battery industry is most likely in the

growth stage.

Foot Friendly 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?

incremental innovation