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.