Strategic Management- Chapter 7

What accurately describes how Netflix used innovation to gain a competitive advantage?

Netflix applied big data analytics to its user preferences to provide highly personalized viewing recommendations.

What are the advantages of utilizing a platform business model?

Platforms benefit from community feedback, allowing for more fine-tuning. Platforms scale more efficiently than pipelines by eliminating gatekeepers. Platforms unlock new sources of value creation and supply like Airbnb.

When a firm pursues a maintain strategy, it _________.

continues to support marketing efforts even if the demand for the product is declining.

The group of customers referred to as the _________ lead the wave of increased demand as the industry moves from the introduction stage to the growth stage.

early majority

It 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 ________.

enter into the market in large numbers, creating a herding effect

A factor favoring the success of disruptive innovation is that __________.

incumbent firms are slow to change

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) _________.

network effect

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 _________.

organizational inertia

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 _________.

strategic entrepreneurship

What customer segments, as described in the chasm framework, make up the mass market?

the early and late majority together