Innovation and Entrepreneurship
process innovaiton
during the shakeout stage of the industry life cycle, ___ ___ becomes more important
growth
during which stage does a standard develop?
Maturity
entry and exit rates slow and remain about the same
Architectural innovation
existing product technology, new market
process innovation
high rate of innovation occurs later on
maturity
in the ___ stage of industry life cycle, industry growth flattens or even declines
network effects
increase in the value of a product or service that result from a corresponding increase in the number of users are known as ___.
introduction, growth, shakeout, maturity, and decline
industry life cycle
product innovation
introduction phase focuses on
Disruptive Innovation
new product technology, existing market
Radical innovation
new product technology, new market
laggards
not worth the effort pursuing
shakeout
rate of growth declines firms begin to compete directly against one another for market share the weaker firms are forced out of the industry firms begin to cut prices and offer more services, all in an attempt to gain more of a market
process innovation
shakeout phase focuses on
technology enthusiasts
the customer segment known as ___ ___ enjoy testing product prototypes and providing voluntary feedback that companies use to perfect their products.
innovation
the entire process of inventing, marketing, and delivering a new product or service to market.
idea, invention, innovation, imitation
the four I's
creative destruction
the hypothesis that the creation of new products and production methods simultaneously destroys the market power of existing monopolies
capital
the introductory stage of the industry life cycle is a ___ intensive process
Herding effect
the tendency of customers to enter the market in large numbers during the growth stage of the industry life cycle
Decline
there have been minor or major disruptions interrupt maturity
architectural innovation
using known components, based on existing technologies, in a new configuration to create a new market
achitectural
using known components, based on existing technologies, in a new configuration to create a new market is known as ___ innovation
early adopters, early majority
where is the chasm? Between ____ ___ and ___ ___
innovation
which of the following is a primary factor in avoiding creative destruction
cost leaders
winners in the shakeout stage are generally the ___ ___
early adopters
According to the crossing-the-chasm framework, the biggest chasm between customer segments is between ___ ___ and the mass market made up of the early majority and the late majority.
Incremental Innovation
Existing product technology, existing market
Advantage
First-Mover ___: Accumulate valuable knowledge (& patents)
Advantage
First-Mover ___: Create switching costs for customers
Advantage
First-Mover ___: Enable economies of scale and learning effects
Advantage
First-Mover ___: Establish significant brand loyalty
Disadvantages
First-Mover ___: Investment in Obsolete Technology
Advantage
First-Mover ___: Locking up distribution channels & suppliers
Disadvantages
First-Mover ___: Pioneering Costs - Later entrants 'free-ride' on first-mover's investments
Disadvantages
First-Mover ___: Plunging into the chasm- mass market may differ from the needs of early adopters
Disadvantages
First-Mover ___: Quality Assurance Mistakes
Disruption/Embryonic
Mergence of new products based on different technology
Growth
The entry rate exceeds the exit rate
Shakeout
The exit rate exceeds the entry rate
shakeout phase
Which phase has this feature: Competitive intensity within the industry increases.
temporary monopoly
a patent holder typically has a ____ ___
incremental innovations
after a firm has gained market acceptance with a radical innovation, it will typically follow up with ___ ___
process
after a standard is established in an industry, firms tend to focus more on ___ innovations.
innovation
allows a firm to redefine a market is its favor
standard
an agreed upon solution about a common set of engineering features and design choices is known as ___
invention
creating new products out of new or existing ideas
First Movers' Strategies
Going it alone (In-house or Spin-off?) Strategic alliance or joint venture License the innovation to others
Product Innovation
High rate of innovation occurs early on
radical innovations
___ ___ usually introduced by new entrepreneurial ventures
disruptive
a ___ innovation is more likely to be successful if it captures the low end of the market first.
innovation ecosystem
a manufacturer that relies on an established network of suppliers to produce its goods is part of an ___ ___ and is less likely to produce radical innovations.