strategic management ch 7
innovation ecosystem
A firm's embeddedness in a complex network of suppliers, buyers, and complementors, which requires interdependent strategic decision making, is referred to as a(n) ______.
Entrepreneur
Because Lorraine wants to introduce innovative new production processes to the local restaurant industry, she is considered a(n)
1780s
Drag each industrial revolution wave to the period in which it occurred. Steam power, mechanization
crossing the chasm
Successfully transitioning from one stage of the industry life cycle to the next is referred to as
entrepreneurship
Taking on an economic risk in order to innovate is known as
strategic entrepreneurship
The fundamental question of ______ is how to combine entrepreneurship with the concepts of strategic management in order to achieve a competitive advantage.
capital
The introductory stage of the industry life cycle is often a ______-intensive process.
incremental innovations
An incumbent firm in a winner-take-all market will typically seek to extend the time it can extract profits through a focus on ______
the early majority
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?
1870s
Drag each industrial revolution wave to the period in which it occurred. Electricity, mass production, the assembly line
come to a halt
During the decline stage of the industry life cycle, product innovation efforts ______.
exit
During the decline stage of the industry life cycle, which strategic option requires firms to declare bankruptcy or undergo liquidation or divestment?
demand
During the growth stage of the industry life cycle, ______ increases rapidly.
maintain
Using a ______ strategy, a firm continues to market its products at the same level despite a decline in consumer demand.
the creation of the large-scale assembly line
What innovation of the second industrial revolution allowed for low-cost mass production of certain goods?
Innovation
What is the commercialization of an invention called?
Growth
At which stage of the industry life cycle does the size of the market expand rapidly?
growth
At which stage of the industry life cycle does the size of the market expand rapidly?
social entrepreneurship
Attempting to address social or ecological issues when building a for-profit business is known as
2020s
Drag each industrial revolution wave to the period in which it occurred. Artificial intelligence, cyber-physical systems
shakeout
In which stage of the industry life cycle does competition become more intense, forcing weaker firms out of the industry?
network effects
Increases in the value of a product or service that result from a corresponding increase in the number of users are known as
RADICAL
Innovations that target NEW markets and represent a major break from existing technologies or ways of thinking, such as the digital camera, the touch-screen smart phone, or the decoding of the human genome, are examples of ______ innovations.
disruptive
Introducing a new technology to an existing market to better address consumer needs is known as ______ innovation.
RADICAL
It is common for firms to get their start by introducing a(n) _____ innovation.
business pipeline
It is the traditional system of horizontal business organization.
marketing
Of the following competencies, which one is the most important in the introductory stage of the industry life cycle?
the late majority
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 ______.
continue to innovate
One way to counter a disruptive innovation is to ____
herding
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
FALSE `
True or false: Businesses evolve through each stage in the industry life cycle.
true
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.
architectural innovation
Using known components, based on existing technologies, in a new configuration to create a new market is known as
incremental radical disruptive architectural
Which of the following are types of innovation? 4
U.S. Patent and Trademark Office
______ determines whether an invention can be patented.
first
_______-mover advantage refers to the competitive benefits that accrue to the successful innovator.
architectural innovation
a new product in which existing technologies are used in a novel way to create new markets
growth shakeout introduction decline maturity
5 stages of the industry life cycle?
organizational inertia
A company that resists change and sticks to formalized business processes and structures is likely experiencing ______.
bottom-up
A disruptive innovation typically requires a(n) _____ approach to capturing the market.
patent
A form of intellectual property that grants an inventor a temporary monopoly on a new product or process in exchange for disclosing the details of how the product or process is made is called a(n)
the long tail
A large amount of revenue derived from a small number of units among almost unlimited choices
temporary
A patent holder typically has a______- monopoly
early adopters and the early majority
According to the crossing-the-chasm framework, the largest difference in consumer expectations is between _______- and _____.
incremental innovations
After a firm has gained market acceptance with a radical innovation, it will typically follow up with_______ `
standard
An agreed-upon solution about a common set of engineering features and design choices is known as a
standardq
An agreed-upon solution about a common set of engineering features and design choices is known as a
platform business
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)
radical
Because it targeted a new market and used new technologies, the first mass-produced automobile is considered a(n) _____ innovation.
shakeout
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.
consolidate
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?
early adopters
Customers who desire a product because it stokes their imagination and creativity are known as
1970s
Drag each industrial revolution wave to the period in which it occurred. Computers, electronics, automation
comparative
During the first industrial revolution, a(n) _________ advantage emerged which is when each nation has a lower opportunity cost in producing one good over a different good.
research and development
During the introductory stage of the industry life cycle, innovators will likely devote most of their time, money, and effort to
all but the most efficient firms
During the shakeout stage of the industry life cycle, profits degrade for ______.
information
During the third industrial revolution, inventions such as the personal computer and advances in communication technology signaled the start of the_______ age
growth
During which stage does a standard develop?
disruptive
Educational organizations, such as Coursera, offer massive open online courses on the web as an alternative to traditional universities. This is an example of a(n) ______ innovation.
growth
Establishing a solid strategic position that competitors cannot easily imitate is the key objective of a company in the ______ stage.
zero sum
Extensive imitation of Netflix's streaming innovations and the fact that there are a finite number of households in the United States has resulted in ______competition.
harvest
Firms that pursue a(n) _____ strategy minimize the amount of resources devoted to product support in order to maximize cash flow.
maturity
In the _____ stage of the industry life cycle, a few number of large firms compete for a share of a market that has reached its maximum size.
maturity
In the ______ stage of the industry life cycle, a few number of large firms compete for a share of a market that has reached its maximum size.
intrapreneurs
People who pursue entrepreneurship within an existing company are called
idea, invention, innovation, imitation
Place the four steps of the innovation process in order from first to last. Place the first step at the top.
new entrepreneurial ventures
Radical innovations are usually introduced by ______.
pipeline
The business structure that is linear and has producers at one end and consumers at the other is known as a(n)
technology enthusiasts
The customer segment known as _____ enjoy testing product prototypes and providing voluntary feedback that companies use to perfect their products.
early majority
The customers coming into the market in the shakeout stage are called _____.
S-curve
The development of most industries follows a(n)
architectural
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.
creative destruction
The negative effect of innovative ride-sharing services, such as Uber and Lyft, on traditional taxi cab companies is an example of ______.
creative destruction
The process by which word-processor manufacturer Wang Laboratories captured the market from typewriter manufacturers, and which explains how it was later replaced by PC manufacturers and mobile-phone companies, is known as ______.
entrepreneurship
The process in which change agents create new products or processes at significant economic risk is known as
production methods technology manufacturing
The second industrial revolution was marked by major breakthroughs in which three areas?
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 ____
incremental
The type of innovation that focuses on improving an existing product by using existing technology and targeting existing markets is a(n) ______ innovation.
laggards
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?
true
True or false: Once a standard is reached, process innovations occur more often than product innovations.
FALSE
True or false: Once an innovation has failed, it is a waste of time to try to apply it to other situations.`
fasle
True or false: Platform businesses are organized as traditional linear pipelines.
T
True or false: The chasm separating the early adopters from the early majority is the largest.
A trade secret
What is valuable proprietary information that is not in the public domain and where the firm makes every effort to maintain its secrecy called?
Does the innovation build on existing technologies or create new ones?
What question is asked along the horizontal axis of the markets-and-technology framework?
the platform ecosystem
What term is used to refer to the market environment in which all players participate relative to the platform?
innovation
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 ______.
laggards
Which customer segment will only adopt a new product when it becomes absolutely necessary?
innovation
Which of the following allows a firm to redefine a market in its favor by introducing change that other firms must respond to?
people planet profits
Which of the following metrics are used by social entrepreneurs to evaluate performance? 3
strategic
Which of the following types of entrepreneurship involves leveraging innovation for competitive advantage?
It has accelerated dramatically.
Which statement best describes the speed of innovation over the past hundred years?
Technology enthusiasts
Which term is used for the customer segment in the introductory stage of the industry life cycle?
the late majority the early majority
Which two customer segments make up the largest percentage of the market potential?
INCREMENTAL
Which type of innovation applies to existing markets and existing technologies?
disruptive
Which type of innovation uses new technologies to invade an existing market from the bottom up?
internet of things
_______ of _______ is the network of physical objects, such as cars and refrigerators, that contain sensors, software, and other technology that enable the objects to connect and exchange information over the internet.
innovation.
________ is a powerful weapon for gaining and maintaining competitive advantage.
