Entrepreneur & Strategic Thinking Final Exam Review

What are the three most important value drivers that managers can use to create a competitive advantage?

- customer service - product features - complements

Which if the following are input factors?

- information technology services - labor - raw materials -capital

In terms of business strategy, blue oceans represent which of the following?

- increase demand - untapped market space

True or false: Intellectual property represents significant assets to an entrepreneur and should be understood before seeking the services of an attorney.

true

What are the components of a patent application?

- introduction - description of invention - claims

When selecting a lawyer, an entrepreneur should ensure that the lawyer _________

understands all possible circumstances and results related to any legal action

Which of the following are examples of ways that a large retailing firm can increase the perceived value of its offerings by focusing on customer service?

- offering a "no questions asked" return policy - maintaining a domestic call center is open 24 hours per day

Which of the following competitive forces can result in the erosion of margins for both differentiation and cost-leadership business strategies?

- power of buyers - power of suppliers - threat of entry

Which value driver would be the focus of a company that sells products that are similar to competing products and that provides a 60-day guarantee with no questions asked?

customer service

A successful blue ocean strategy requires strategists to reconcile the trade-offs between _________

differentiation and cost-leadership

Which of the following are business strategies JetBlue pursued in order to gain a competitive advantage?

differentiation and cost-leadership

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

How to compete on a business level is defined by the variables value and cost. Together they define the ____

economic value created

A firm that increases its output of a given product and experiences a simultaneous decrease in per unit costs is taking advantage of _________

economies of scale

Patti's Potato Chips is a national potato-chip manufacturer. Calpurnia's Crisps is a small-batch gourmet potato-chip maker. Based on just this information, which of the following is the greatest advantage Patti's has over Calpurnia's?

economies of scale

True or false: Platform businesses are organized as traditional linear pipelines.

false

True or false: The protection in a copyright protects an idea itself

false

In the maturity stage of the industry life cycle, industry growth _______

flattens or even declines

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 an ________

platform business

A true statement about a patent is that it ________

prohibits anyone other than the owner from creating, using, or selling the defined invention

The initial application to the U.S. Patent and Trademark Office providing evidence of first to market is known as an _________ _________ _________

provisional patent application

A firm that successfully leverages network effects can _______

push its industry into the growth stage

In addition to having the lowest cost, a low-cost leader is likely to have ______

a large market share

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

all but the most efficient firms

The perceived value that a company creates for consumers less the company's costs to create the value equals ________

an economic value created

If two firms produce very similar products at the same rate of output, and firm A is able to achieve lower per-unit costs than firm B by taking advantage of a new manufacturing technology, firm A is benefiting from

an experience-curve effect based on process innovation

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

architectural innovation

Why do many firms fail to successfully implement a blue ocean strategy?

because they end up being "stuck in the middle," unable to increase value and lower costs at the same time

A tablet manufacturer that includes a free stylus with every purchase is using ________ to enhance users' experiences and increase the perceived value of its tablets.

complements

Right given to prevent others from printing, copying, or publishing any original works of authorship is known as an ________

copyright

Which type of strategy is being used if a company offers a product at a lower cost than its competitors?

cost-leadership strategy

The Ritz-Carlton provides a personalized customer experience based on sophisticated analysis of data gathered about each guest. This focus on _______ allows the hotel to increase its perceived value.

customer service

A struggling retailer seeking to implement a blue ocean strategy is likely to experience difficulty with _______

cutting costs and increasing value at the same time

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

decline

Economies of scale are ________

decreases in cost per unit as output increases

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

demand

A ________ strategy aims to create higher value for customers by offering products with unique features but a similar level of costs to those of competing products.

differentiation

A ________ strategy aims to create higher value for customers by offering products with unique features but similar level of costs to those of competing products.

differentiation

A(n) _________ strategy attempts to increase the perceived value of a product while controlling costs

differentiation

It is challenging for firm's to "cross the chasm" because ________

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

The type of innovation that focuses on improving an existing product by using existing technology and targeting existing markets is an ________ innovation.

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

An auto manufacturer that has access to cheaper labor and raw materials than its rivals will have a competitive advantage regarding lower cost of ________ factors.

input

Any patents, trademarks, copyrights, or trade secrets held by an entrepreneur are known as ________ _________

intellectual property

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

it has accelerated dramatically

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

In the context of trade secrets, documents that are prepared by an employer and signed by an employee in order for the company to protect valuable assets ranging from product information to clients, marketing ideas, and unique strategies are known as _____

noncompete agreements

A contract between the government and an inventor is known as an ________

patent

The business structure that is linear and has producers at one end and consumers at the other is known as an _________

pipeline

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

radical

It is common for firms to get their start by introducing an _________ innovation

radical

Products in the affordable "business-casual" clothing market have largely become commoditized, and most retailers have begun to compete mainly on price rather than product features. In this environment, it is impossible for one retailer to gain market share without another losing it. This is an example of a _________ ocean.

red

A manufacturer of electronic components can use its manufacturing machines to produce many different components such as semiconductors, sensors, and capacitors. In this case, the firm benefits from an economy of ______, reducing overall production costs by finding multiple uses for its components and facilities.

scope

Economies of ______ are the savings that come from producing two or more different outputs at a lower cost than producing each output individually.

scope

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

Simone was the first among her peers to try the new unicorn hair dye. For months she was the only person with unicorn hair. After some time, though, the product became available everywhere, and nearly every other person began sporting unicorn hair, even Simone's mom. This situation describes which of the following?

the crossing-the-chasm framework

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

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

A word, symbol, design, or some combination of such, or it could be a slogan or even a particular sound that identifies the source or sponsorship of certain goods or services is known as an _________

trademark

True or false: A company that achieves differentiation panty at a lower cost has implemented a successful cost-leadership strategy.

true

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

true

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

true

A firm that manages to avoid competition entirely by offering a product or service that creates an uncontested market space is engaging in _________

value innovation

Implementing a blue ocean strategy requires making competition irrelevant and creating a new market space, otherwise known as ________

value innovation

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

- introduction - growth - maturity - shakeout - decline

Innovation can _________

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

Which two of the following variables can managers primarily manipulate in order to answer the question, "How should we compete?"

- value - cost

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

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

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

It is the traditional system of horizontal business organization

Ryan is the CEO of a startup. He plans to hire a lawyer to understand the regulations that may affect his firm. Who among the following should Ryan hire?

Johnson, who is someone Ryan can establish a good working relationship with

Which capability is required to create superior product features?

R&D

Which team 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 have a strong sense of practicality - They weigh benefits and costs carefully

Which of the following are advantages of platform businesses compared to pipeline business?

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

Identify the requirements for filing of a trademark registration.

- a drawing of the mark - completion of a written form - 5 specimens that demonstrate the actual use of the mark

A producer of consumer headphones that successfully differentiates its products with a patented noise-canceling technology and celebrity endorsements will enjoy which of the following benefits?

- the ability to charge a premium price - less intense competition from imitators

The four-step innovation process begins with ______

an idea

Arrange the steps involved in the process of registering a trademark in the correct order of occurrence.

1. A simple form that can be downloaded and submitted by mail or electronically needs to be completed to file an application. 2. The Patent and Trademark Office (PTO) provides a serial number to a trademark application and sends a filing receipt to the applicant. 3. An examining attorney at the Patent and Trademark Office (PTO) determines as to whether the trademark is suitable for registration.

Why does the learning curve go down when productivity is considered?

As workers repeatedly engaged in an activity, they become more efficient, driving down costs

Sarah, an entrepreneur at a startup, seeks to patent a new product. How should she minimize patent risks?

By consulting a patent attorney who is an expert in the same product line

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?

Business-level strategy addresses which overarching questions?

How should we compete?

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 business is true?

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

In terms of productivity, which of the following is true of learning curves?

They go down

Which of the following statements about platform businesses is true?

They tend to grow faster than pipeline businesses

What is the role of the Office of International Patent Cooperation established by the U.S. Patent and Trademark Office (USPTO)?

To advance toward a more harmonized patent system

Why did the U.S. Patent and Trademark Office (USPTO) establish the office of International Patent Cooperation?

To reduce the ambiguity of International Patenting (IP) rights while decreasing costs

Jonathan, an entrepreneur of a startup software company, seeks to patent new software developed. How can he minimize patent risks?

Seek a patent attorney who has expertise in the product line