MKT 3360 QUIZZES II
A center-for-global approach tends to be very responsive to the diverse demands of different markets.
F
A high degree of formalization and standardization in firms results in organic structures.
F
A loosely coupled structure is best suited for activities that involve exchange of tacit knowledge.
F
Functional teams typically have a project manager or dedicated liaison personnel.
F
Homogeneous teams should possess more information, on average, than heterogeneous groups.
F
In a functional team approach to new product development, team members remain in their functional departments and may meet periodically to discuss the project.
F
In crafting an advertising message, firms must focus more on making the advertisements entertaining and memorable than on providing a significant quantity of informative content.
F
Parallel development processes are universally endorsed.
F
Project managers of heavyweight teams are typically junior or middle management employees, who are not able to exert significant authority over team members.
F
Quasiformal structures foster interactions based on hierarchy rather than on interests.
F
The value of a technological innovation is solely determined by what the technology can do.
F
Three-dimensional printing and traditional methods of constructing take the same amount of time to generate a model.
F
Titles and names can be copyrighted.
F
Using computer-aided design (CAD) to build and test product design increases cycle time.
F
When marketing a new product to the late majority and laggards, a company should emphasize the advanced technological features of the new product.
F
All pioneers face customer uncertainty.
False
Early leaders are firms that are the first to enter a market.
False
Late entrants typically bear the bulk of the research and development expenses for their product or service technologies.
False
After much research, Angela has designed a new automobile tire with a unique polycarbonate exterior that cannot be punctured. In the context of the U.S. patent law, which of the following statements would be true for this invention?
It can be patented as it is useful, novel, and not obvious.
Which of the following statements is true of standardization?
It can ensure that activities within a firm run smoothly and yield predictable outcomes.
Which of the following is a disadvantage of the local-for-local strategy?
It can result in significant redundancy in activities.
Which of the following statements is true of outsourcing?
It carries a risk of proprietary technology being expropriated by the contract manufacturer.
Lightweight teams are appropriate for derivative projects in which low levels of coordination and communication are required.
T
The customization of products and processes to a local market makes them particularly difficult to transfer to divisions serving different markets.
T
The pooling of supplementary resources can enable partners to achieve market power or economies of scale.
T
The transnational approach to R&D leverages resources and capabilities that exist anywhere within a firm and deploys them when and where any opportunity arises.
T
Trademarks must be registered before a suit can be brought in federal court against an infringement of a mark.
T
The initial cost of a good itself can be a switching cost.
True
The time elapsed from project initiation to product launch, usually measured in months or years, is referred to as _____.
development cycle time
Virtual teams are best defined as teams in which members:
may be situated at a great distance from each other and collaborate intensively via advanced information technologies.
Josh is the executive vice president of a bank. The president of the bank has recently asked Josh to use his influence to ensure that the bank's online banking project is developed and implemented. Josh has been asked to be a(n):
project champion.
To ensure that companies do not receive patents in countries where they do not intend to set up production of an invention, some countries have a "working requirement," according to which:
the invention must be manufactured in the country where the patent was granted within a specified period of time.
When technology is progressing rapidly, firms are more likely to:
use linkages with other specialized firms to access resources they do not possess.
Sanwey Inc. is a mobile phone manufacturer. In order to keep up with the competition in the market, it has decided to advertise devices that are not yet in the market. These devices are part of its future release plans but have not received approval from the board for manufacturing them. These products advertised by Sanwey Inc. are most likely _____.
vaporware
Bundling enables a new technology to piggyback on the success of another product that already has a large installed base.
T
Viral marketing is based on the fact that people are more receptive to, or have greater faith in, information that comes through personal contacts.
T
Which of the following statements is true of skunk works?
They are isolated from the mainstream organization to which they belong.
Which of the following statements is true of project charters?
They encapsulate a project's mission and articulate exact and measurable goals for the project.
A firm can benefit from developing "antichampions."
T
A lack of cross-functional communication can lead to a poor fit between product attributes and customer requirements.
T
Super Alarm Inc. makes customized door security systems, which it sells under its own brand name. These security systems require installation, extensive customer education, and regular services. _____ would be the most appropriate selling method for Super Alarm Inc.
Employing a direct sales force
Which of the following is an advantage of cross-functional teams?
Cross-functional teams allow a project to draw on a wider mix of information sources in the environment.
In industries that have increasing returns to adoption due to network externalities, allowing competitors to get a head start in building an installed base is the safest strategy.
False
Which of the following is an advantage of heavyweight teams?
Heavyweight teams have strong cross-functional coordination and communication.
Which of the following is a reason attributed to the failure of start-up firms?
New innovations typically tend to be adopted very slowly at first.
_____ require multiple stages of a new product development process to occur simultaneously.
Parallel development processes
Which of the following measures assesses the ratio of a firm's total profits from new products to its total expenditures?
Return on innovation
Marketing channels that enable high content and selective reach are appropriate for innovators and early adopters.
T
Suppliers can contribute ideas for product improvement or increased development efficiency.
T
Technology trajectories are path dependent.
T
First movers typically invest more in exploratory research than late entrants.
True
Blue Water Publication Corp. is planning to sell its books solely through its Web site BlueWaterbooks.com. By doing so, it ceases to require wholesalers and retailers. This is most accurately an example of:
disintermediation.
Customers who face the same general needs of the marketplace but are likely to experience them months or years earlier than the rest of the market and stand to benefit disproportionately from solutions to those needs are referred to as _____.
lead users
_____ offers a fast way for a firm to extend the reach of its technology that is nearly free and offers the potential for royalties.
Licensing out a technology
A contract book is an important mechanism for establishing team commitment to a project and a sense of ownership over the project.
T
A service mark distinguishes the provider of a service rather than a product.
T
BioSense Prosthetics Inc. was a leader in the prosthetics market and was earning high profits. The firm developed a new computerized prosthetic arm that would render its previous models obsolete. It decided to withhold the new computerized prosthetic arm from the market. This would allow the firm to:
avoid cannibalization of the sales of its current prosthetics.
ErgoWorld Inc. manufactures office furniture. The company is considering adopting a modular production system. A modular system would offer greater value to ErgoWorld if:
its customers have heterogeneous demands that need to be met in a cost-effective way.
According to Joseph Schumpeter, small firms are likely to have better-developed complementary activities such as marketing or financial planning that enable them to be more effective innovators than larger firms.
F
Small firms typically have more bureaucratic inertia due to many layers of authority and well-developed policies and procedures.
F
Social loafing occurs when, as the size of a team decreases, individuals perceive that they will not receive full credit for their contribution to the group effort and so they make a strong commitment to increase their efforts.
F
Solo internal development is, on average, a relatively fast and inexpensive way of developing a technology.
F
The majority of all new product development projects result in an economic return.
F
Which of the following is an advantage of being a late entrant into a market?
Late entrants often do not have to invest in exploratory research.
Zach has invented a device, which when plugged to household appliances, such as televisions, vacuum cleaners, sound systems, and mixer grinders, will operate them using solar power. The device also works as a battery and converts solar power into energy that can be used during the night. This device needs to be plugged into a port in the household appliances. Since not all appliances have this feature, Zach is of the opinion that he should delay his entry into the market. Which of the following statements supports Zach's decision?
Less mature enabling technologies may favor waiting for enabling technologies to be further developed.
Which of the following statements is true of ambidextrous organizations?
They have a complex organizational form that is composed of multiple internally inconsistent architectures.
Many start-up firms fail because new innovations tend to be adopted very slowly at first.
True
Other things being equal, an entrant with a strong reputation can attract adoptions earlier than entrants without strong reputations.
True
Other things being equal, less customer uncertainty favors earlier timing of entry.
True
Astech Inc. has been developing a new graphic design software. The firm has released a functional version of the software and has sent it to several lead users for testing. Based on the feedback from the lead users, the firm is going to improve the design of the product and begin commercial production. This initial version of the product is referred to as the _____.
beta version
Karen's supervisor, while discussing her participation in a new product development team, tells her that she has been engaging in social loafing. This means that Karen:
has not been putting much effort into the team's work.
Self-enforcing norms based on goodwill, trust, and reputation of partners are known as _____.
relational governance
In heavyweight teams, all team members are dedicated full-time to a project even after the completion of the project. Hence, these teams are permanent in nature.
F
In heavyweight teams, the long-term career development of individual members rests with their project managers rather than their functional managers.
F
In the United States, there are no laws to protect trade secrets.
F
In the context of failure modes and effects analysis, which of the following formulas is used to calculate the risk priority number?
Risk priority number = severity × likelihood of occurrence × inability of controls to detect
Firms that enter the market early can preemptively capture scarce resources such as key locations, government permits, patents, access to distribution channels, and relationships with suppliers.
TRUE
Since larger companies tend to have more bureaucracy, fixed costs, and commitments to large numbers of employees, customers, and suppliers than smaller firms, you can expect it to _____.
be less responsive to technological changes
Angelo has designed a license plate holder for automobiles that makes theft of the license plate practically impossible. He has filed an application for a patent through the Patent Cooperation Treaty (PCT) office, and it has been approved. How long is this application going to protect his right to file for patent protection in the member countries of the PCT?
2.5 years
Tacit knowledge is best defined as the knowledge that:
cannot be readily codified or transferred in written form.
Which of the following statements is true of using marketing to shape perceptions and expectations?
A firm can signal its commitment to an industry by making substantial investments that would be difficult to reverse.
Which of the following can be protected by a copyright?
A novel
Which of the following is a disadvantage of using online advertising such as social media?
Conversion of visitors to customers is often low
A firm cannot collaborate with its competitor.
F
Which of the following is a characteristic of the center-for-global strategy?
Greater specialization and economies of scale in R&D activities are achieved.
Theta Cleaning Corp. wants to use the house of quality matrix in designing and developing a new vacuum cleaner. What is the first step that Theta Cleaning should take?
Identification of customer requirements
Modular products become more valuable when customers have heterogeneous demands and there are diverse options for meeting them.
T
Product life cycles shorten with high-speed technological changes.
T
Howard, an engineer, has plans to introduce additive manufacturing in his firm. He has heard that this method can create a model in a couple of hours. His team is not aware of this method of product development and hence Howard decides to give a presentation and explain the technique of generating a model using this method. Which of the following statements would he most likely mention during his presentation?
The design is printed by laying down thin horizontal cross sections of material.
Albert has put together a new product development team based on the functional team structure. Which of the following statements is most likely to be true about this team?
The team structure will be straightforward to implement.
According to the stage-gate process developed by Robert G. Cooper, _____ are the results of the previous stage and are the inputs for the gate review.
deliverables
Speeding Horse Inc., a leader in the video game console market, is making its new generation consoles backward compatible with its previous games. This means that:
it is providing a significant incentive to the owners of its previously developed consoles to buy the new console.
Shirley, a U.S. citizen, has invented a solar-powered amplifier that can be used in small speakers, such as Bluetooth speakers, to increase the volume up to five times. She decides to apply for a patent for this device in the United States. If she receives approval for the patent, what would be the duration of patent protection?
20 years
Jupiter Tech Inc. has conducted a failure modes and effects analysis of a digital identification system that it developed. The scores are as follows: Severity = 4 Likelihood of occurrence = 2 Inability of controls to detect it = 3 What is the risk priority number of the digital identification system?
24
_____ are legally binding contractual arrangements to ensure that partners are fully aware of their rights and obligations in the collaboration and have legal remedies available if a partner should violate the agreement.
Alliance contracts
Alpen Inc. is a manufacturing firm that holds the patent for a new food processor that is considerably safer and more efficient than the others available in the market. Being the only firm that manufactures this product, Alpen charges a very high price for it. Based on the information provided in the scenario, which of the following statements is most likely to be true?
As Alpen is the technology leader in the food processor manufacturing sector, the firm will yield sustained monopoly rents.
In the context of product development teams, which of the following statements is true?
As the size of a team increases, the potential for social loafing increases.
Which of the following is a defining characteristic of autonomous teams?
Autonomous teams often do not conform to the operating procedures of the rest of the organization.
Which of the following is an advantage of making a new generation of technology backward compatible?
Consumer switching costs may be lower because they anticipate using their existing complements.
Sigma Cleaning Inc. wants to use the house of quality matrix in designing and developing a new vacuum cleaner. What is the last step that Sigma Cleaning should take?
Creation of a new design based on the design targets
Electrocartonics Inc. recently approached people worldwide to come up with ideas to create a vehicle that could run on electricity or solar power, was affordable, easy to use and maintain, safe, and that could cover long distances. Millions of people shared their ideas and designs with the company. The shortlisted individuals were then invited by the company to discuss with their R&D team potential ideas, problems with the existing vehicle models, and possible solutions. These individuals were then given an exclusive tour of the manufacturing and assembly units and a preview of the models that were yet to be introduced in the market. Which of the following terms best describes the problem-solving model used in the scenario?
Crowdsourcing
Which of the following statements is true of customer preferences?
Customers can differ from producers in their understanding of a new technology.
Magnitude Inc. was the first company to introduce a video gaming console in the market. However, consumers were uncertain about the product, and its high costs discouraged consumers from purchasing it. Eventually, Magnitude withdrew the product from the market. A few years later, Mantel Corp. and Adventura Inc. came up with their respective gaming consoles and successfully established their products. In this scenario, Mantel and Adventura would be considered:
Early followers.
Jupiter Inc., a software firm, is starting to face competition from the new entrant in its market, Coral Inc. Jupiter wants to prevent its existing customers from switching to Coral's newly developed software. Which of the following measures should Jupiter adopt to achieve its objective?
Ensuring that customers find its software simpler and more convenient to use than that of Coral's
A common set of international copyright laws automatically protects an author's work throughout the world.
F
A contract book must be developed before a project charter is written.
F
A cross-functional team is one that has members of different ethnic backgrounds in a single functional area.
F
A firm's effectiveness at managing its collaborations will increase with the number of collaborations to which it is committed.
F
A firm's prior success in the market increases its ability to respond to new technological generations. This is known as an Icarus Paradox.
F
A sequential process has an early warning system to indicate that planned features are not manufacturable.
F
Cannibalization is the process by which a firm's sales of one product diminish because of a substitute product offering by a competitor.
F
Champions are solely involved with radical innovation projects.
F
Failure modes and effects analysis (FMEA) was initially adopted primarily for development projects in which the risks posed by failure were minimal.
F
Firms intending to maximize market share typically use a market skimming pricing strategy.
F
Firms try to decrease their development cycles in order to increase their timing of entry options. This move indicates that firms should always be racing to launch their products as early as possible.
F
In a loosely coupled structure, development and production activities achieve coordination through tight integration.
F
Independent agents that promote and sell the product lines of one or a few manufacturers are called wholesalers.
F
It is unusual for a company to lack certain complementary assets required to transform a body of technological knowledge into a commercial product.
F
Joint ventures offer low potential for leveraging a firm's existing competencies because they typically entail a short-term relationship between two or more firms.
F
Licensing a technology from another firm is typically more expensive for a licensee than developing a new technology in-house.
F
Obtaining some of the necessary capabilities or resources from a partner rather than building them in-house will increase a firm's asset commitment.
F
The use of executive sponsors reduces the effectiveness of a development process.
F
While mavens with a valuable piece of information are likely to expose it to a great number and diversity of people, connectors are likely to convey the information to fewer people but in more detail.
F
With advances in information technology, loosely coupled organizational structures are losing their popularity.
F
A disadvantage of using parallel development processes is that it greatly lengthens the new product development time.
False
A firm intending to refine an earlier entrant's technology should avoid fast-cycle development processes.
False
Early followers enter the market only after a product begins to penetrate the mass market.
False
Felix has designed a pair of sunglasses that can be folded and put into a case that easily fits into a shirt or pant pocket. Felix wants to know if he can receive a patent on this invention. Which of the following responses would be most accurate according to the U.S. patent law?
He cannot receive a patent since he is merely making the sunglasses more portable.
In the 1980s and 1990s, Neon Corp. was the most successful firm in the television market. The firm believed that its competitors would never be able to produce televisions that compared to their products' quality and price. As a result, it was unable to compete with the newer models of televisions that its Japanese competitors had begun to infiltrate the market with. Eventually, Neon lost its market leadership to its competitors. This scenario most clearly exemplifies the _____.
Icarus Paradox
Which of the following statements is true of the autonomous team structure?
In autonomous teams, team members are collocated with a senior project manager.
Which of the following statements is true of team leadership?
In heavyweight and autonomous teams, the project manager must act as a concept champion for the team within the organization.
Which of the following statements is true of heavyweight teams?
In heavyweight teams, members are collocated with the project manager.
Which of the following statements is true of a patent?
In the United States, an inventor can publish an invention up to a year before applying for the patent.
The vice president of Biomedics Inc. is trying to decide the composition of a new product development team. If she chooses members from multiple functional areas in the firm, which of the following disadvantages is she most likely to experience?
Increase in communication and coordination costs
Which of the following statements is true of contract manufacturing?
It enables a firm to tap the greater economies of scale.
Which of the following is an advantage of lightweight teams?
It is easier to coordinate activities in lightweight teams than in functional teams.
Which of the following is a disadvantage associated with autonomous teams?
It is hard for autonomous teams to fold back into the parent organization when a project is completed.
Which of the following statements is true of a firm with a long development cycle time?
It is more likely to have a high cost of capital.
Which of the following is a limitation of a functional team?
It may have little commitment to the development project.
Under the U.S. patent law, which of the following is one of the mandatory requirements to be met by a new invention in order to be eligible for patent protection?
It must be novel.
Easymake Corp. developed a new Web design software to build Web pages for its clients. However, Easymake soon realized it could make more money by selling this software to those who wish to quickly build Web pages to sell their products. Which of the following would be the most appropriate strategy for Easymake?
It should become a licensor of the new Web design software.
Which of the following statements is true of patent trolling?
Its primary purpose in owning patents is to extort money from other firms.
The R&D team of Zelda Technozone Inc. has developed a prototype for a two-seater car that runs primarily on solar energy. Since the firm usually manufactures household appliances, the management acknowledges that it does not have the required competencies to manufacture this car on a large scale. It decides to access another firm's manufacturing competencies. Which of the following collaborative arrangements is most appropriate in this scenario?
Joint venture
When Green Water Publication publishes academic books or revises previous editions of its books, it donates or sends a number of these new books to university libraries and professors. Its intention is that the professors and students would use those books for their courses and also recommend those books to their colleagues and fellow students in other universities. Which of the following strategies is the firm using to accelerate distribution?
Sponsorship
_____ refers to the degree to which partners have compatible objectives and styles.
Strategic fit
A company with a short development cycle can quickly revise or upgrade its offering as design flaws are revealed or technology advances.
T
Bundling arrangements have proven to be a very successful way for firms to build their installed base and ensure provision of complementary goods.
T
Computer-aided manufacturing (CAM) is faster and more flexible than traditional methods of manufacturing.
T
Firms in industries characterized by increasing returns will often use the objective of maximizing market share and a penetration pricing strategy.
T
Heavyweight teams are typically considered appropriate for platform projects.
T
If a firm codifies all of its activities with detailed procedures, it may stifle employee creativity.
T
If a firm wishes to avoid giving away its own installed base or complementary goods advantages to others, it may protect them by ensuring its products are incompatible with those of future entrants.
T
If a firm's objective is maximum market skimming, it will initially set a high price on new products.
T
In the context of design rules for fabricated assembly products, minimizing the number of parts for a product reduces direct labor and material handling costs.
T
In the product development process, go/kill gates act as funnels that cull mediocre projects.
T
Large firms often make greater use of formalization and standardization because as the firm grows it becomes more difficult to exercise direct managerial oversight.
T
Managers of lightweight teams are normally junior or middle management employees, who are not able to exert significant authority over team members.
T
Many firms use beta testing to get customer input early in the development process.
T
Proximity and frequent interaction help teams to develop shared norms and a dialect for communicating about a project.
T
Some firms avoid collaboration for fear of giving up their proprietary technologies.
T
Through a strategic alliance, firms can establish a limited stake in a venture while maintaining the flexibility to either increase their commitment later or shift these resources to another opportunity.
T
While mechanistic structures are often associated with high centralization, it is also possible for organizations to have a highly decentralized mechanistic structure by using formalization as a substitute for direct oversight.
T
Which of the following statements is true of functional teams?
The functional team structure provides little opportunity for cross-functional coordination.
M&P Inc., a consumer goods manufacturing firm, has subsidiaries throughout the globe that have to respond to varying local market requirements. Therefore, the firm has planned to adopt a local-for-local approach to innovation. Which of the following statements is true in this context?
The subsidiaries of M&P and their R&D divisions will be highly autonomous.
Singing Cards Corp. has decided to make the technology behind its musical cards open. Which of the following is most likely to be one of the advantages associated with this decision?
The technology will accrue more rapid adoptions.
Which of the following statements is true of loosely coupled organizational structures?
They coordinate development and production activities through their adherence to shared objectives.
Which of the following statements is true of design for manufacturing (DFM) methods?
They facilitate integration between engineering and manufacturing and bring issues of manufacturability into the design process as early as possible.
Which of the following statements is true of innovators and early adopters?
They may demand considerable customization and technical support.
Which of the following statements is true of lightweight teams?
They offer a small improvement in team coordination and likelihood of success over functional teams.
Which of the following statements is true of partly parallel development processes?
They shorten overall cycle time.
Which of the following is a difference between copyrights and trademark protection?
Unlike copyrights, trademarks are indicators used to distinguish the source of a good.
Beta Cleaning Equipment Corp. has started the actual design and development of a new floor buffing machine. It has the details of manufacturing, marketing, and operations of the new product as well. According to the stage-gate process, what is the next stage of this project?
Verification and validation of the new product and its marketing and production
Meghan is a popular celebrity who mostly endorses beauty products on Instagram and Facebook. Several branded beauty product manufacturers reach out to her with free samples. She takes to social media to describe these products, their benefits, and her experiences with using the products. Since she has several followers on social media, the companies believe that they can advertise their products and reach out to several more potential customers. Which of the following marketing strategies has been described here?
Viral marketing
In which of the following circumstances can a firm confidently enter the market at any time?
When the product to be manufactured and sold is inimitable
Sally has come up with a unique recipe for cookies and is selling them through exclusive outlets all across Atlanta. As the sales skyrocket, her friends tell her to patent the recipe. However, she is so protective of her recipe that she does not even want to reveal her secret ingredients to a government agency. Is there anything she can do to keep the recipe legally protected?
Yes, her recipe can be considered a trade secret and she can legally prevent others from benefiting from her recipe without her permission.
BioMark Lifesystems Inc. wanted to enhance the adoption of its new diagnostic substances by medical laboratories. It made an agreement with the dominant producer of syringes and test tubes to have its diagnostic substances sold to laboratories in a package along with the syringes and tubes. Such an arrangement is known as:
a bundling relationship.
Not-invented-here syndrome occurs when:
a division of a firm is reluctant to adopt other divisions' innovations.
In the context of project development, an "antichampion" is:
a person who plays the role of "devil's advocate."
In the _____ process, a product is divided into many smaller features or functionalities, and these are rapidly created into minimum viable products and presented to the customer for feedback, enabling rapid incremental adaptation.
agile development
When Fun Bun Inc., an international fast-food chain, set up operations in China, it had to teach farmers how to grow a particular variety of potatoes, and bakers had to be taught how to make hamburger buns. This is an example of:
an undeveloped supply channel.
Genetech Inc. has produced a new generation of video game consoles. The new product can be used to run the games used in the previous generation of the video game console as well. In this context, Genetech is most accurately applying the concept of:
backward compatibility.
Techworld Zone Inc. is a renowned laptop and desktop manufacturer. The firm employs thousands of employees and has always followed a rigid hierarchical structure. The management of the company recently decided that it was high time the firm disaggregate in order to:
become more responsive to technological changes.
A _____ of a product is an early working prototype of the product released to users for testing and feedback.
beta version
When Pearl Love Inc. introduced its new range of body wash, consumers switched from using its soap bars, being sold under the same brand name, to using the body wash. As a result, the company experienced a sharp drop in its soap sales. This scenario represents:
cannibalization.
Combining the capabilities and other resources of partner firms but not necessarily transferring those resources between the partners is referred to as _____.
capability complementation
At Tech Edge Inc., a special team is set up for designing and developing a robot capable of assisting visually impaired individuals with their daily chores. The members of the team are specialists from various divisions of the firm, including R&D, marketing, manufacturing, and distribution. The new team is put under the charge of a senior manager. This team is most accurately an example of a:
cross-functional team.
Pioneer Athletics Inc. wants to provide better landing mats for gymnasts. It therefore asks its foam suppliers to use a new innovative process to manufacture higher quality, durable foam in its mats. This new process used to develop the foam represents a(n) _____ for Pioneer Athletics.
enabling technology
Pioneer Systems Inc. has a high degree of formalization. Employees in Pioneer Systems are more likely to:
face morale and motivation problems.
Urban Fashions Corp. has become very successful in the last few years and now employs a large number of people. Serena, the owner of the firm, had been very informal in running the company. However, because of the increase in the size of the firm, she now feels that the informal ways of management have become ineffective. In order to structure the behavior of employees, Serena wants to introduce written codes of conduct and regulations into the firm. This change being introduced in the company by Serena is referred to as _____.
formalization
The Rocketingbusiness.com Web site offers large volumes of business research information at no cost. If a user is interested in more comprehensive information and business consultation, the site offers these services for a premium fee. This is typically an example of a _____ pricing model.
freemium
Oxygenic Inc. is a company with major decentralized divisions in Germany, Russia, and the United States. The scientists in Russia develop cancer treatment methods. Treatment clinics are organized in Germany. The U.S. division gathers finance and markets the treatment methods. The activities of the different divisions are coordinated by the central office of the firm to meet company-wide objectives. This is most clearly an example of a _____ strategy.
globally linked
Ruth works in the advertising department of her company. It was observed that she interacted more frequently and more intensely with team members who shared her interests and social background but ignored others. This phenomenon exhibited by Ruth is referred to as:
homophily.
LiteShoes Inc. has recently obtained architectural control for its shoe glider technology. By doing so, the company has:
improved its efficiency in controlling the rate at which the technology is upgraded or refined.
Maverick Systems Inc. is a leading company in the mobile phone market, and profits from its mobile phones are very high. Maverick Systems has developed a new generation of smartphones, which is better than its existing line of smartphones and has decided to embrace cannibalization of its existing line of smartphones. This means that the company is going to:
introduce the new technology right away and increase its market lead while taking away profits from its existing line of smartphones.
Stevenson, a U.S. citizen, wrote a book called The Ten Commandments of Leadership. He gave away copies of the book to the people who attended his workshops on leadership. The copyright protection for this book:
is in effect from the time the book was created and fixed in a copy.
Allured Architecture Inc. collaborated with Maze & Matiz Corp. to form a new architecture firm called AllureAmaze Inc. Both the firms had a significant equity stake in the new entity. This collaboration would most accurately be termed a(n) _____.
joint venture
As a firm grows bigger, it becomes:
less efficient in R&D because of loss of managerial control.
A firm choosing to decentralize its R&D by divisions rather than centralizing it will have a greater possibility of:
matching new products to the requirements of the customers served.
According to Schoonhoven and Jelinek, quasiformal structures are:
not formally indicated on the organizational chart.
Software whose code is made freely available to others for use, augmentation, and resale is referred to as:
open source software.
Since much innovation arises from experimentation and improvisation, the _____ organization structure is typically considered better suited for innovation despite its possible detriment to efficiency.
organic
Gemini Car Inc. buys car components from various manufacturers and assembles them into cars, which it sells under its own brand name. From the given information, Gemini Car is most accurately an example of a(n):
original equipment manufacturer.
The first entrants to sell in a new product or service category are referred to as _____.
pioneers
Omega Cleaning Corp. wants to use the house of quality matrix in designing and developing a new vacuum cleaner. The use of house of quality is most likely to:
provide a common language and framework for members of a project team to use.
Wholly proprietary systems differ from wholly open systems in that wholly proprietary systems _____.
provide their developers with the opportunity to appropriate rents from the technology
Liam, an employee of Centaurs Inc., is part of a new product development team that operates in a completely different manner from its parent organization. Within the team, there is considerable decentralization of authority and limited bureaucracy. It also has its own unique culture. Liam's team can be most accurately referred to as:
skunk works.
A(n) _____ price strategy is a short-run strategy that prices goods to cover variable costs and some fixed costs, and it is used by firms in industries plagued with intense price competition.
survival
When Sports 360, a sports bar in New York, saw yet another sports bar open up across the street, it knew that it would have to lower its price again to stay in business. The city already had too many sports bars, and Sports 360 intended on being one of those left after the inevitable shake out. In this situation, the best pricing strategy for Sports 360 would be:
survival pricing.
June is a member of a new product development team. Her supervisor asks her about her experience in the team, and she replies, "Our team seems to be suffering from homophily." This statement means that:
team members only like other people whom they perceive as being similar to themselves.
Companies that buy manufacturers' products in bulk and then resell them (often in smaller or more diverse bundles) to other supply channel members are referred to as _____.
wholesalers
Which of the following statements is true of first movers in comparison with early followers and late entrants?
First movers are in a better position to exploit buyer switching costs and also to reap increasing returns advantages.
Which of the following statements is true of a firm entering a market too early?
Enabling technologies and complements available to the firm will be immature.
Discovery of scientific principles that pertain to natural laws can be patented in all countries as they are considered to have always existed.
F
Firms may seek patents just to limit the options of competitors or to earn revenues through aggressive patent lawsuits. These actions are sometimes referred to as patent thickets.
F
If the knowledge underlying a particular technology is tacit, competitors will typically find it very easy to duplicate.
F
If you live in a country that is a member of the Madrid Union and you register a trademark in your country, that trademark is protected throughout the world.
F
All innovations require complementary goods, and none of them can utilize existing complementary goods.
False
When a market is characterized by mature enabling technologies, a firm should enter the market late.
False
Fashion Fair Corp., the first mover in the "all-year discount" stores market, lost its market share to a late entrant, Brand Fair Inc. Brand Fair operates online discount stores, which is cost-efficient when compared to investing in a brick-and-mortar store. Fashion Fair has been unable to replicate the online store business model because of its existing contracts with suppliers and heavy investment in retail stores. This ultimately leads to the failure of the business. Which of the following can be attributed to Fashion Fair's failure?
Incumbent inertia
Which of the following statements is true of a collective research organization?
It allows a firm to share the cost and risk of basic research.
Which of the following statements is true of resource fit?
It encourages collaborations based on the combination of complementary resources to access resources a firm does not possess.
Which of the following is an advantage of collaborating?
It gives firms more flexibility.
Which of the following is a feature of a joint venture that differentiates it from other forms of alliances?
It involves a significant equity stake by the partners.
After licensing a technology, a firm typically has limited discretion over what it can do with the technology.
T
Collective research organizations can take the form of trade associations.
T
Equity ownership helps to align the incentives of the partners and provides a sense of ownership and commitment to the project that can facilitate supervision and monitoring of the alliance.
T
External development efforts typically lack the coordination of internal development.
T
Firms can use strategic alliances to exploit their own capabilities by leveraging them in another firm's development efforts.
T
For technologies in which standardization and compatibility are important, maintaining the integrity of the core product is absolutely essential, and external development can put it all at risk.
T
In most regions, if owners of a trade secret believe that another party has stolen or improperly disclosed their trade secret, they can ask a court to issue an injunction against further use of the secrets.
T
When multiple firms can produce a technology, losing money on the technology in the short term to promote it as a standard is highly risky.
T
Wholly open systems are usually quickly commoditized and provide little appropriability of rents to their developers.
T
Marine Systems was the first company to develop an inventory management software specifically for hotels and restaurants. Soon after Marine Systems launched its product, Unicorn Systems developed a similar software. The software developed by Unicorn Systems outperformed the one developed by Marine Systems, and it eventually became the market leader. In this scenario, Unicorn Systems is an example of a(n) _____.
early follower
Component technologies that are necessary for the performance or desirability of a given innovation are referred to as _____.
enabling technologies
Carl owns a software firm, and Mike owns a computer hardware manufacturing firm. They decide to create an alliance in order to manufacture laptops and desktops using the shared competencies of their respective firms. When creating the alliance, they make sure that each of them invests 50% capital and that they would each own a specified right to a percentage of the profits from the alliance. The collaborative relationship in this scenario is known as _____.
equity ownership
Greyer Corp. has developed a special drug that kills cancer cells. While the scientists at Greyer have the knowledge, they are short on equipment, money, and marketing know-how. In this situation, the most appropriate step for Greyer would be to:
find a partner to collaborate with to sell the drug.
Doven Inc. pioneered software development in the 1970s and introduced its range of office tools well ahead of its competitors. According to the classification scheme of entrants, Doven would be classified as a(n) _____.
first mover
The scientists at Brainstorm Inc., a private medical research firm, have come up with a remarkable method for curing cancer. This cancer treatment technology is well protected and cannot be easily duplicated. Based on this information, it would be most accurate to say that this technology:
has a high degree of appropriability.
The tendency of existing firms to be slow to respond to changes in the industry environment due to their large size, established routines, or prior strategic commitments to existing suppliers and customers is known as:
incumbent inertia.
Greyer Corp. manufactures surgical instruments. Systems Medico Inc. enters into a contractual arrangement with Greyer that allows it to use Greyer manufacturing methods and management structure to produce and sell surgical instruments. Systems Medico must pay a yearly fee to Greyer for the use of its manufacturing processes. In this scenario, Systems Medico is the _____.
licensee
Allured Cosmetics Corp. enters into a contractual agreement with Pure Cosmetics Inc., a manufacturing firm in the West Coast. According to the contract, Pure Cosmetics can use the manufacturing processes of Allured Cosmetics to produce cosmetics in return for a specific fee. Pure Cosmetics is bound to use the manufacturing process only to make complementary products for the cosmetics manufactured by Allured Cosmetics. This collaborative arrangement is classified as _____.
licensing
Alumplus Aluminum Company has come up with a new type of metal. However, producing it would take up 75 percent of its manufacturing capacity and would hinder its ability to continue producing its other products. Alumplus Aluminum hires LM Group of Manufacturers to manufacture the new type of metal. This collaborative arrangement is most likely to be classified as _____.
outsourcing
Joe's Burgers Corp. is a famous fast-food chain that uses a picture of a cook in a red hat as its logo. It would not be legal for a firm to sell hamburgers with the same identification picture as that of Joe's Burgers because that would be a(n):
trademark violation.
David and Sons Corp., a firm that manufactures home appliances, uses a symbol resembling a lightning strike to distinguish its products from other similar products in the market. This symbol is an example of a(n):
trademark.
If aspects that customers have come to expect in a technology are difficult for competitors to imitate, being the technology leader will:
yield sustained monopoly rents.
