MGT 3830 Test #2

The key challenges for firms entering the growth stage of the industry life cycle insures

All of the above; scaling up output to meet demand, obtaining sufficient resources and capabilities to support effective scaling-up operations, and adaptive product designs and manufacturing capabilities to accommodate large-scale production

The extent to which an innovation leads to greater profit for the innovating firm is

All of the above; the creation of value for consumers by the innovation, the appropriation of value created from the innovation by the innovating firm, and how quickly the innovation gets adopted by consumers

A firm's ability to respond quickly to external change depends upon:

Both A and B; accurate information and having a well-established market leadership position

The number of firms in most industries tends to ____________ with the onset of the maturity stage of the industry life cycle

Decrease significantly

The difference between "evolutionary" and "revolutionary" standards strategies is:

Evolutionary strategies maintain compatibility with what went before

A key success factor in the maturity stage of an industry life cycle is a firm's ability to create necessary supporting capabilities to scale up production of its good/service

False

Emphasis often shifts from process innovation to product innovation once a dominant product emerges

False

In the context of innovation, lead-time refers to the period of time during which a firm is the new leader for a product or service

False

Isolating mechanisms are forces that tend to equalize profit rates among firms and erode a firm's competitive advantage

False

Research has shown that higher R&D output has a strong positive relationship with firm performance

False

The industry life cycle consists of 4 stages: 1)introduction,2)Growth,3)Plateau, and 4)Rejuvenation

False

competitive advantage and technology are linked by:

Innovation

Michael Porter's early work suggests that combining cost leadership and differentiation

Is likely to result in a firm becoming "stuck in the middle"

External changes can only give to competitive advantage when those changes differently affect firms

True

If a firm is able to establish clear property rights over its innovation, then the firm is leading

True

In the long run, competition eliminates differences in profitability between firms.

True

Two main factors drive industry evolution: demand growth and the product knowledge

True

___________ refers to the idea that, when a would be imitator cannot clearly understand the extent of a competitor's success, any attempt to imitate that strategy is subject to unknown outcomes

Uncertain imitability

Dynamic capabilities:

are a firm's higher level ability to learn new capabilities

As an industry moves through the stages of the life cycle, overall strategies tend to:

change in most major aspects

An organization that engages in both exploitative and explorative activities in the same organizational units, with the same people employs _________

contextual ambidexterity

A cost leadership strategy means that a firm must:

exploit sources of cost advantage in providing customers with a standardized product

If a strong regime of appropriability exists, the innovating firm:

has the advantage in terms of capturing a significant portion of value created by the innovation

standards emerge in markets that are subject to ___________

network externalities

Differentiation is when a firm

offers customers something valuable and unique for which customers are willing to pay a price premium

Strategic innovation involves:

pioneering along at least one of three dimensions : new industry, new customer segment, or a new advantage

Once established, competitive advantage is:

subject to erosion by competitors or new entrants

The idea that an organization's existing capabilities are path dependent means that:

the capabilities it possesses today are the result of the steps it has taken throughout history

The most successful follower strategies are:

those that initiate a product's transition from niche market to mass market

an innovation diffuses

through the adoption of products by customers and the imitation by competitors