BCOR 2304 - Reading 5

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

1. Idea 2. Invention 3. Innovation 4. Imitation

Which statement describes the long tail?

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

What does the innovation process begin with?

An Idea

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

Decline

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?

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

Early Adopters

The customers coming into the market in the shakeout stage are called ___.

Early Majority

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

Growth

The stage during which a new product has gained some acceptance, thus causing first-time buyers to eagerly acquire the product and accelerate demand, is the ______ stage.

Growth

What is the relationship between innovation and competitive advantage?

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

What statements about innovation are true?

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

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

It has accelerated dramatically.

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

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

Radical

Which term is used for the customer segment in the introductory stage of the industry life cycle?

Technology enthusiasts

Which of the following are characteristics of the early majority?

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

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

An architectural innovation is ______.

a new product in which existing technologies are used in a novel way to create new markets

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

all but the most efficient firms

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?

architectural disruptive radical incremental

During the decline stage of the industry life cycle, product innovation efforts ______.

come to a halt

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

Which of the following are stages of the industry life cycle?

decline maturity growth introduction shakeout

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

A significant difference between technology enthusiasts and early adopters is that ______.

early adopters are interested in how a new technology will improve their lives, rather than in the details of the technology itself

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

flattens or even declines

Which are the four steps of the innovation process?

imitation idea invention innovation

The most common type of innovation is ______ innovation.

incremental

Which type of innovation applies to existing markets and existing technologies?

incremental

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

industry life cycle

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

A firm that successfully leverages network effects can ___.

push its industry into the growth stage

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

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

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

Which two customer segments make up the largest percentage of the market potential?

the late majority the early majority

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