Mgt. 4335 Ch. 10

Which of the following is one of the three criteria of an innovation presented in the animation? Useful Scalable Inimitable Disruptive

Useful

High conversion rate refers to ___________. the high rate at which the production cost is returned in the form of profits from sales a high percentage of sales achieved as a result of a firm's current marketing strategy the high rate at which people switch to a firm's product from a rival firm's product a high percentage of free users who are willing to convert to paid customers for premium features

a high percentage of free users who are willing to convert to paid customers for premium features

Which stage of the product/business/industry life cycle involves an increase in competitive rivalry and late majority buyers? Introduction stage Growth stage Maturity stage Decline stage

Maturity stage

Which of the following companies uses the strategy of "Eliminating a Step in the Value Chain"? Nordstrom Mercedes-Benz Amazon Wal-Mart

Amazon

Which of the following is not one of the innovative strategies presented in the animation? Differentiation High-End Disruption Mass Customization Blue Ocean Strategy

Differentiation

What is the Pareto Principle? 20% of the effects come from 80% of the causes. 60% of the effects come from 40% of the causes. 50% of the effects come from 50% of the causes. 80% of the effects come from 20% of the causes.

80% of the effects come from 20% of the causes.

A cell phone manufacturing company gives away a free case with a purchase of any product higher than $50. Which of the following is being exemplified in this case? A bundling strategy A third-party pay strategy A blue ocean strategy A cross-sell strategy

A bundling strategy

What classification of strategy best describes the strategy deployed by Netflix to take on Blockbuster? Incremental Disruptive Differentiation Low End

Disruptive

In the ___________ of the product/business/industry life cycle, sales begin to accelerate as innovation gains traction and increased market acceptance. introduction stage growth stage maturity stage decline stage

growth stage

Nathan, a designer at Zeal Inc., comes up with a new idea. While Nathan considers turning it into a piece of art, Ricky, his colleague, suggests converting the idea into a product that generates revenue. Ricky's suggestion to convert the idea into a revenue-generating product refers to a(n) ___________. variation innovation invention revolution

innovation

Which of the following is not an example of a company that uses/has used the strategy of Low End Disruptive Innovation? Amazon Apple Nucor Skype

Amazon

Inks Corp. is a manufacturer of pens. It creates a new product called Quink, a quick-drying ink pen that does not require the use of blotting paper. It creates this product by building on its established knowledge of the properties of ink and the mechanisms of a pen. Which of the following innovations is being exemplified in this case? A radical innovation A revolutionary innovation An incremental innovation A subversive innovation

An incremental innovation

Gem Inc. a clothing manufacturer, creates a new strategy to increase its customer base. Maya, a marketing student, observes that Gem engages in disintermediation, while Nate, her friend, believes that this observation is incorrect. Which of the following statements is likely to support Maya's observation? Gem is likely to eliminate middlemen and directly deliver products to customers. Gem is likely to offer coupons to regular customers and increase brand loyalty. Gem is likely to create disruptive innovations to eliminate competition. Gem is likely to misrepresent facts in its promotions to increase sales.

Gem is likely to eliminate middlemen and directly deliver products to customers.

Which of the following statements is true of the maturity stage of an industry's life cycle? Toward the end of this stage product innovation starts to give way to process innovation. Demand increases as the early majority is convinced that the product concept works. The market size of the product shrinks significantly. Growth starts to slow as total market penetration increases.

Growth starts to slow as total market penetration increases.

___________ refers to Professor Rich's argument that competitive intensity has increased, and that periods of competitive advantage have decreased. Hypercompetition Mass customization Third-party competition Standardization

Hypercompetition

Which of the following statements refers to incremental innovation? It is a pricing strategy that a company uses to get paid for the value it delivers through its business model. It can be described as building on a competing firm's established knowledge base to steadily improve a firm's own product or service. It can be described as innovation that draws on a different knowledge base, technologies, or methods to deliver value in a truly unique way. It can be described as building on a firm's established knowledge base to create minor improvements to the product or service a firm offers.

It can be described as building on a firm's established knowledge base to create minor improvements to the product or service a firm offers.

Which of the following statements is true of the blue ocean strategy? It creates new demand in an uncontested market space. It disrupts an existing market by displacing an earlier technology. It relies on its existing knowledge of products to improvise on new features. It uses low-end disruptive innovations to compete in the market.

It creates new demand in an uncontested market space.

Which of the following statements is a characteristic of a disruptive innovation? It disturbs an existing market by displacing an earlier technology. It sustains a company's current product offering by the firm's established knowledge. It typically uses old technologies used by competitors in the market. It typically offers value in a way that is easy to imitate.

It disturbs an existing market by displacing an earlier technology.

Which of the following statements is true of a firm that creates a radical innovation? It focuses on the established knowledge base of a firm to deliver value. It employs a fundamentally different business model than its rivals. It aims to sustain its current product offering and revenues. It relies on existing technologies and resources to create a new product.

It employs a fundamentally different business model than its rivals.

Identify a true statement about the innovative strategy of disintermediation. It uses the price skimming strategy to gain a foothold in the market. It creates products that outperform existing products in the market. It involves reconfiguring the value chain to eliminate activities or steps. It involves producing a low-cost product or service at the low-end or most price-sensitive segment of the market.

It involves reconfiguring the value chain to eliminate activities or steps.

Ochre Inc. uses the freemium strategy to enter a market. This strategy becomes successful and the organization gains a wide customer base. Which of the following is likely to be true in this case? It is likely to gain a wide customer base only if there is a high conversion rate. It is likely to gain new customers in an existing market only through price skimming. It is likely to use the high-end disruptive innovation strategy. It is likely to use product differentiation to mark-up the initial price of the product.

It is likely to gain a wide customer base only if there is a high conversion rate.

Which of the following statements is true of an incremental innovation? It typically creates improvements based on the knowledge perceived from competitors. It sustains a company's current product offering and revenues. It creates new values through a different set of resources and capabilities than that of rivals. It focuses on a different knowledge base to deliver value in a truly unique way.

It sustains a company's current product offering and revenues.

Copper Inc., an existing clothing outlet, decides to shift from direct to online retailing. It offers the same products at a reduced price as it does not have to incur the costs to manage a store. In this case, which of the following patterns of innovative strategies has Copper adopted? Forming product differentiation strategies to increase value Adding additional product features to increase the product life-cycle Creating low-end disruptive innovations to decrease competition Reconfiguring the value chain to eliminate activities

Reconfiguring the value chain to eliminate activities

Palm's, a new restaurant in Boston, enters the market with a new strategy. Cooking enthusiasts can co-create a dish for their family along with the in-house chefs. They also allow families to cook their meals together and dine by the poolside. None of the other restaurants in the city offers this unique service. This is an example of a ___________. blue ocean strategy low-end disruptive innovation high-end disruptive innovation mass-customization strategy

blue ocean strategy

Peach Corp. continues to refine its chocolate products even as they look for innovative ways to reach customers through marketing and new distribution channels. In this case, the organization is in the ___________ stage of the product life cycle. growth maturity introduction decline

growth

Paws Corp., a manufacturer of pet products, tries to get a few customers to try out their products. The primary goal of the organization is to get some reference customers that will seed future growth to increase market acceptance. In this case, the organization is in the ___________ stage of the product life cycle. growth decline maturity introduction

introduction

A salon that specializes in haircuts comes up with a new service that sets it apart from those of its rivals. Clients are requested to send in their photographs; the stylists then create a set of digital images with various looks. Once the client chooses a desired look, a stylist goes to the client's home to deliver the service. The strategy of creating digital images, which requires a unique set of resources and skills, is an example of a(n) ___________. incremental innovation radical innovation progressive innovation altered innovation

radical innovation

The approach, or pricing strategy, a company uses to get paid for the value it delivers through its business model is called the ___________. differentiation model customization model revenue model cost model

revenue model