4490 Chapter 7

Which of the following are characteristics of the early majority? (Check all that apply.) They are quick to commit to new products. They weigh benefits and costs carefully. They have a strong sense of practicality. They are not concerned with cost.

They weigh benefits and costs carefully. They have a strong sense of practicality.

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?

Which of the following statements about platform business is true?

It creates value not only for the businesses but also for consumers.

Which of the following is most likely to produce a radical innovation?

a new sportswear company with a handful of employees that perform a number of loosely defined roles

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

capital

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

creative destruction

Successfully transitioning from one stage of the industry life cycle to the next is referred to as ______.

crossing the chasm

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

In the maturity stage of the industry life cycle, industry growth ______.

flattens or even declines

At which stage of the industry life cycle does the size of the market expand rapidly?

growth

During which stage does a standard develop?

growth

Which are the four steps of the innovation process? imitation instigation idea innovation imagination invention

imitation idea innovation invention

The most common type of innovation is ______ innovation.

incremental

The ______ identifies how industries tend to develop and change over time.

industry life cycle

Which of the following is a primary factor in avoiding creative destruction?

innovation

Creating new products out of new or existing ideas is known as ______.

invention

Tomas recently acquired a cell phone but only because his company insisted that he do so. Tomas likely belongs to which of the following consumer segments?

laggards

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

laggards

Most firms consider laggards to be ______.

not worth the effort of pursuing

The business structure that is linear and has producers at one end and consumers at the other is known as a(n) ______.

pipeline

New methods for producing existing products or delivering existing services are known as ______.

process innovations

A firm that successfully leverages network effects can ___.

push its industry into the growth stage

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

radical

During the introductory stage of the industry life cycle, innovators will likely devote most of their time, money, and effort to ______.

research and development

In which stage of the industry life cycle does competition become more intense, forcing weaker firms out of the industry?

shakeout

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

the early majority

Place the four steps of the innovation process in order from first to last.

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

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

Which of the following are types of innovation? (Check all that apply.) disruptive radical architectural incremental harvest consolidation

disruptive radical architectural incremental

Which of the following are advantages of platform businesses compared to pipeline businesses? (Check all that apply.) They scale efficiently by eliminating gatekeepers. They benefit from community feedback. They own and control all their resources. They unlock new sources of value creation and supply.

They scale efficiently by eliminating gatekeepers. They benefit from community feedback. They unlock new sources of value creation and supply.

One of the largest customer segments of the market that includes customers who research the product, wait until new-product kinks have been resolved, and purchase from well-established companies is ______.

the late majority

Introducing a new technology to an existing market to better address consumer needs is known as ______ innovation.

disruptive

Which of the following is an example of invention?

Apple combining smart phone and wristwatch technologies to create the Apple Watch

Which statement best describes the speed of innovation over the past hundred years?

It has accelerated dramatically.

Which of the following statements about a business pipeline is true?

It is the traditional system of horizontal business organization.

Using known components, based on existing technologies, in a new configuration to create a new market is known as ______.

architectural innovation

According to the crossing-the-chasm framework, the largest difference in consumer expectations is between ______.

early adopters and the early majority

Which of the following statements about the maturity stage of the industry life cycle is true?

Only a few large firms remain.

Which statement describes the long tail?

A large amount of revenue derived from a small number of units among almost unlimited choices

What is the relationship between innovation and competitive advantage?

Innovation is a powerful weapon for gaining and maintaining competitive advantage.

Which of the following statements about platform businesses is true?

They can grow faster than pipeline businesses.

True or false: Industries often tend to follow a predictable industry life cycle.

True

True or false: Innovation can create value for one firm while destroying value for another.

True

True or false: The chasm separating the early adopters from the early majority is the largest.

True

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

all but the most efficient firms

What does the innovation process begin with?

an idea

Which customer segment dominates the market growth stage of the industry life cycle?

early adopters

The type of innovation that focuses on improving an existing product by using existing technology and targeting existing markets is a(n) ______ innovation.

incremental

Which 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 ______.

innovation

Increases in the value of a product or service that result from a corresponding increase in the number of users are known as ___.

network effects

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

Innovations that target NEW markets and represent a major break from existing technologies or ways of thinking, such as the digital camera, the touch-screen smart phone, or the decoding of the human genome, are examples of ______ innovations.

radical

It is common for firms to get their start by introducing a(n) ______ innovation.

radical

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

standard

Entrepreneurs innovate by ______.

commercializing new ideas and inventions

Demand declines most rapidly in the ______ stage of the industry life cycle.

decline

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

decline

During the growth stage of the industry life cycle, ______ increases rapidly.

demand

It is challenging for firms to "cross the chasm" because ______.

each stage of the industry life cycle features a different group of customers with different preferences and demands

Customers who desire a product because it stokes their imagination and creativity are known as ______.

early adopters

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

entrepreneurship

The process in which change agents create new products or processes at significant economic risk is known as ______.

entrepreneurship

Innovation can ______. (Select all that apply.). only be achieved by government agencies never be a basis for competitive advantage make existing products or businesses obsolete provide firms with a competitive advantage

make existing products or businesses obsolete provide firms with a competitive advantage

In the ______ stage of the industry life cycle, a few number of large firms compete for a share of a market that has reached its maximum size.

maturity

A company that resists change and sticks to formalized business processes and structures is likely experiencing ______.

organizational inertia

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

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

DaShawn likes to do a lot of research before he buys a new product and relies on the endorsement by others. He also wants to be sure the product will be practical. DaShawn is likely a member of which type of customer?

the early majority

Which two customer segments make up the largest percentage of the market potential? (Check all that apply.) the early majority the late majority laggards technology enthusiasts early adopters

the early majority the late majority

A significant difference between the early majority and the late majority is that ______.

the late majority is not confident in using new technologies

A business model in which companies can obtain a large part of their revenues by selling a small number of units from among almost unlimited choice is referred to as _____.

the long tail

Which of the following are ways in which standards can emerge? (Check all that apply.) by letting consumers vote for their preferred standard by having firms purchase the license for a standard through market competition by being imposed by government or other agencies

through market competition by being imposed by government or other agencies