MGMT 498 Chap 7

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.

Which of the following are advantages of platform businesses compared to pipeline businesses? (Check all that apply.)

They unlock new sources of value creation and supply. They scale more efficiently by eliminating gatekeepers.

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

True

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

True

An architectural innovation is ______.

a new product in which existing technologies are used in a novel way to create new markets

The invention of small desktop copiers to create a new consumer market using the same technology as large, stand-alone copiers is an example of a(n) ______ innovation.

architectural

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

architectural innovation

Entrepreneurs innovate by ______.

commercializing new ideas and inventions

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

technology enthusiasts

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

technology enthusiasts

DaShawn likes to do a lot of research before he buys a new product and relies on the endorsement by others. He also wants to be sure the product will be practical. DaShawn is likely a member of which type of customer?

the early majority

The shakeout stage of the industry life cycle is dominated by ______.

the early majority

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

entrepreneurship

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

growth

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

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

innovation

Innovation can ______. (Select all that apply.)

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

Which of the following are stages of the industry life cycle? (Check all that apply.)

maturity introduction shakeout growth decline

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

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

decline

In the ______ stage of the industry life cycle, falling demand leads to a reduction in market size.

decline

Which of the following are types of innovation? (Check all that apply.)

disruptive architectural incremental radical

The business structure that is linear and has producers at one end and consumers at the other is known as a(n) ______.

pipeline

A firm that successfully leverages network effects can ___.

push its industry into the growth stage

Successfully transitioning from one stage of the industry life cycle to the next is referred to as ______.

crossing the chasm

Customers who desire a product because it stokes their imagination and creativity are known as ______.

early adopters

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

False

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.

stakeout

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

It is the traditional system of horizontal business organization.

A significant difference between technology enthusiasts and early adopters is that ______.

early adopters are interested in how a new technology will improve their lives, rather than in the details of the technology itself

Which two customer segments make up the largest percentage of the market potential? (Check all that apply.)

the late majority the early majority

A significant difference between the early majority and the late majority is that ______.

the late majority is not confident in using new technologies

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

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

shakeout

Which of the following statements about platform businesses is true?

They can grow faster than pipeline businesses.

Which statement describes the long tail?

A large amount of revenue derived from a small number of units among almost unlimited choices

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?

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

It has accelerated dramatically.

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

Only a few large firms remain.

In the maturity stage of the industry life cycle, industry growth ______.

flattens or even declines

The stage during which a new product has gained some acceptance, thus causing first-time buyers to eagerly acquire the product and accelerate demand, is the ______ stage.

growth

Which are the four steps of the innovation process?

idea,invention,innovation,imitation

The type of innovation that focuses on improving an existing product by using existing technology and targeting existing markets is a(n) ______ innovation.

incremental

Which type of innovation applies to existing markets and existing technologies?

incremental

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 a(n) ______.

platform business

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