STRATEGIC MANAGEMENT CHAPTER 7

In order for a product or service to be considered patentable, it must be ___________

-useful -non-obvious -novel

Place the S-curve developement of most industries in order, with the first step at the top.

1. Demand for a new product is slow to take off. 2. Demand accelerates. 3.Demand decelerates 4. Demand turns to zero 5. Demand becomes negative as a market contracts.

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

entrepreneurship

Apple famously ignores feedback from customers because ___________

it is focused on producing disruptive innovations rather than incremental innovations based on the needs of existing customers

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

In the __________ stag of the industry life cycle, a moderate number of large firms compete for a share of a market that has reched its maximum size

maturity

which of the following statements about platform business is true?

they can grow faster than pipeline businesses

Which of the following are important core competencies for competitive advantage in the growth stage?

-R&D -Manufacturing capabilities -Marketing capabilitites

Which are the four steps of the innovation process

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

True or Falst: Platform Businesses are organized as traditional linear pipelines.

False

The success of Netflic can be attributed to which of the following?

It disrupted the TV industry more than once to gain a competitive advantage

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

True

The introductory stage of the industry life cycle is a __________ intensive process

capital

The tendency of customers to enter the market in large numbers during the growth stage of the industry life cycle is known as the __________ effect.

Herding

The one key advantage of the effective us of technology for business platforms is that _______________

the barriers of time and space are reduced

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

the early adopters and the early majority

The key objective for firms in the growth stage of the industry life cycle is __________

to establish a strong strategic position so that rivals cannot immitate it easily

Which of the following characteristics change as the industry life cycle progresses?

-Types of customers - Type and level of innovation - Number and size of competitors

What can incumbent firms do to counter disruptive innovations

-continue to innovate -disrupt themselves -protect the low end of the market

Which of the following are strategic options in the decline stage of the industry life cycle?

-harvest -consolidate -exit -maintain

Which of the follwoing is an example of invention?

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

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

Early adopters

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

It is the traditional system of horizontal business organizations

Radical innovations are usually introduce by __________

New entrepreneaurial ventures

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

Only a few large firms remain.

Match the type of innovation (on the left) with an example (on the right).

Product - Electric Vehicle Process - Biotechnology

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

Shakeout

Attempting to address social or ecological issues when building a for-profit business is know as ________

Social entrepreneurship

The customer segment known as _________ enjoy testing product prototypes and providing voluntary feedback that companies use to perfect their products.

Technology Feedbacks

A patent holder typically has a ____________

Temporary monopoly

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 iprove their lives

The innovation process is a four-step process that consists of idea, invention, innovation. and ____________

imitation

the type of innovation that focuses on improving an existing product by using existing technology and targeting existing markets is a ___________________

incremental

Which of the following allows a firm to redefine a market in its favor?

innovation

the commercialization of an invention by entrepreneurs is called ______

innovation

A manufacturer that relies on established network of suppliers to produce its goods is part of a _________ and is less likely to produce radical innovations

innovation ecosystem

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

innovations

People who pursue entrepreneurship within an existing company are called ______________

intrapreneurs

Creating new poructs out of new or existing ideas is known as

invention

The second step of the four-step innovation process involves the transformation of an idea into a new product or process and is known as ____________

invention

Business model innovations that use technology to interactively connect organizations, information, resources, and people in value-generating transactions are ____________

platforms

After a standard is established in an indusatry, firms tend to focus more on _________ innovations

process

Applying concepts from strategic management to the innovation process is known as _____________

strategic entrepreneurship

The fundemental question of ________ is how to combine entrepreneurship with the concepts of strategic management in order to acheive a competitive advantage.

strategic entrepreneurship

Which is the most common customer segment in the introductory stage of the industry life cycle?

technology enthusiasts

A significant difference between the early majority and the late majority is that ____________

the late majority is not confident in using new technologies

The primary Reason incumbent firms are vulnerable to disruptive innovations is that _______________

they are too committed to existing products to make rapid changes in the face of disruptive innovations

First-mover disadvantages can include which of the following

- The need to educate potential customers about the products benefits -The need to continuously perfect a product. -the need to find distribution channels

Innovations can __________

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

Benny's Baos is in a declining industry, but Benny thinks he can still survive by buying his competitors. Which strategic option is he planning to use?

Consolidate

True or False: Innovation can create value for one firm while destorying value for another.

True

True or False: The chasm seperating the early adopters from the early majority is the largest.

True

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 rolls

The explosive growth of the Apple Iphone was due in part to the network effects created by _____________

complementary apps

The process by which word-processor manufacturer Wang Laboratories captured the market from typewriter manufacturers, and which ecplains how it was later replaced by PC manufacturers and mobile-phone companies, is known as ____________

creative destruction

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

disruptive

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

growth

Establishing a solid stragegic position that competitors cannot easily imitate is the key objective of a company in the ________ stage.

growth

Firms that pursue a __________ strategy minimize the amount of resources devoted to product support in order to maximize cash flow.

harvest

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

organizational inertia

The business structure that is linear and has producers at one end and consumers at the other is know as ________

pipeline

A firm that successfully leverages network effects can _________

push its industry into the growth stage

During the introductory state of the indursty life cycle, an innovator will likely devote most of his time, money, and effort to ____________

research and developement

Which of the following metrics are used by social entrepreneurs to evaluate performance

-people -profits -planet

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

entrepreneurship

The primary objective of firms during the introductory stage of the industry life cycle is to ___________

establish themselves as a market participant themselves for furture growth.

During the decline stage of the industry life cycle, which strategic option requires firms to declare bankruptcy or undergo liquidation?

exit

Incumbent firms that are part of an innovation ecosystem are less likely to produce radical innovations because ___________

radical innovations disrupt established relationships within the ecosystem

Innovation helps firms acheive a competititve advantage by _______

Redifining the market in their favor

During the growth stae of the industry life cycle, firms focus on process innovation in order to _____________

-increase production volume -reduce per-unit production costs

Which of the following statements about the industry life cycle are true?

-not all industires go through the entire life cycle -industries can be rejuventated, even during the decline stage.

Which of the following are characteristics of the early majority?

-they rely on reviews by reputable magazines -They weigh benefits and cost carefully -They have a strong sense of practicality

Which of the following are advantages of platform businesses compared to pipeline businesses.

-they unlock new sources of value creation and supply -they scale more efficiently by eliminating gatekeepers

Which of the following are ways in which standars can emerge?

-through market competition -by being impose by government or other agencies

Place the S curve development of most industries in order, with the first step at the top.

1. Demand for a new product is slow to take off 2. Demand accelerates 3. demand decelerates 4. demand turns to zero 5. demand becomes negative as a market contracts

Which of the following are types of innovation?

1. Disruptivef 2. archetectural 3. radical 4. incremental

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

1. Growth 2. Introduction 3. Maturity 4. Decline 5. Shakeout

During the decline stage of the industry life cycle, some firms choose to consolidate, meaning that they ___________

Purchase rival firms in order to acheive near-monopolistic control of the industry

An incumberent firm in a winner -take-all market will typically seek to extend the time in can extract profits through ________

a focus on incremental innovations

An innovation that targets a new market with existing technologies is called a __________ innovation

architectural

The invention of small desktop copiers using the same technology as large, stand-alone copiers is an example of a __________ innovation

architectural

During the shakeout stage of the industry life cycle, process innovation __________

becomes more important

A disruptive innovation is more likely to be successful if it __________

captures the low end of the market first

During the decline state of the industry life cycle, product innovation efforts ___________

come to a halt

Using a ________ strategy, a firm continues to market its products at the same level despite a decline in consumer demand.

maintain

Which of the following is an example of creative destruction

mobile phones replacing traditional telephones

Increase in the value of a product or service that result from a coreesponding increase in the number of users are known as ____________

network effects

PixelPower is a small app developer seeking to enter the highly competititive mobile games idustry. In order to overcome the industry's barriers to entry and compete against incumbent firms, Pixel Power has an economic incentive to _____________

pursue radical innovations

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

radical

Winners in the shakeout stage are generally ___________

the cost leaders