STRATEGIC MANAGEMENT CHAPTER 7
In order for a product or service to be considered patentable, it must be ___________
-useful -non-obvious -novel
Place the S-curve developement of most industries in order, with the first step at the top.
1. Demand for a new product is slow to take off. 2. Demand accelerates. 3.Demand decelerates 4. Demand turns to zero 5. Demand becomes negative as a market contracts.
Taking on an economic risk in order to innovate is known as ___________
entrepreneurship
Apple famously ignores feedback from customers because ___________
it is focused on producing disruptive innovations rather than incremental innovations based on the needs of existing customers
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?
laggards
Which customer segment will only adopt a new product when it becomes absolutely necessary?
laggards
In the __________ stag of the industry life cycle, a moderate number of large firms compete for a share of a market that has reched its maximum size
maturity
which of the following statements about platform business is true?
they can grow faster than pipeline businesses
Which of the following are important core competencies for competitive advantage in the growth stage?
-R&D -Manufacturing capabilities -Marketing capabilitites
Which are the four steps of the innovation process
1. Innovation 2. Invention 3. Imitation 4. Idea
True or Falst: Platform Businesses are organized as traditional linear pipelines.
False
The success of Netflic can be attributed to which of the following?
It disrupted the TV industry more than once to gain a competitive advantage
True or False: Most industries often tend to follow a predictable industry life cycle.
True
The introductory stage of the industry life cycle is a __________ intensive process
capital
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.
Herding
The one key advantage of the effective us of technology for business platforms is that _______________
the barriers of time and space are reduced
According to the crossing-the-chasm framework, the largest difference in consumer expectations is between _____________
the early adopters and the early majority
The key objective for firms in the growth stage of the industry life cycle is __________
to establish a strong strategic position so that rivals cannot immitate it easily
Which of the following characteristics change as the industry life cycle progresses?
-Types of customers - Type and level of innovation - Number and size of competitors
What can incumbent firms do to counter disruptive innovations
-continue to innovate -disrupt themselves -protect the low end of the market
Which of the following are strategic options in the decline stage of the industry life cycle?
-harvest -consolidate -exit -maintain
Which of the follwoing is an example of invention?
Apple combining smart phone and wristwatch technologies to create the Apple Watch
Which customer segment dominates the market growth stage of the industry life cycle?
Early adopters
Which of the following statements about a business pipeline is true?
It is the traditional system of horizontal business organizations
Radical innovations are usually introduce by __________
New entrepreneaurial ventures
Which of the following statements about the maturity stage of the idustry life cycle is true?
Only a few large firms remain.
Match the type of innovation (on the left) with an example (on the right).
Product - Electric Vehicle Process - Biotechnology
In which stage of the industry life cycle does competition become more intense, forcing weaker firms out of the industry?
Shakeout
Attempting to address social or ecological issues when building a for-profit business is know as ________
Social entrepreneurship
The customer segment known as _________ enjoy testing product prototypes and providing voluntary feedback that companies use to perfect their products.
Technology Feedbacks
A patent holder typically has a ____________
Temporary monopoly
It is challenging for firms to "cross the chasm" because _________
each stage of the industry life cycle features a different group of customers with different preferences and demands
A significant difference between technology enthusiasts and early adopters is that __________
early adopters are interested in how a new technology will iprove their lives
The innovation process is a four-step process that consists of idea, invention, innovation. and ____________
imitation
the type of innovation that focuses on improving an existing product by using existing technology and targeting existing markets is a ___________________
incremental
Which of the following allows a firm to redefine a market in its favor?
innovation
the commercialization of an invention by entrepreneurs is called ______
innovation
A manufacturer that relies on established network of suppliers to produce its goods is part of a _________ and is less likely to produce radical innovations
innovation ecosystem
Which of the following is a primary factor in avoiding creative destruction.
innovations
People who pursue entrepreneurship within an existing company are called ______________
intrapreneurs
Creating new poructs out of new or existing ideas is known as
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 ____________
invention
Business model innovations that use technology to interactively connect organizations, information, resources, and people in value-generating transactions are ____________
platforms
After a standard is established in an indusatry, firms tend to focus more on _________ innovations
process
Applying concepts from strategic management to the innovation process is known as _____________
strategic entrepreneurship
The fundemental question of ________ is how to combine entrepreneurship with the concepts of strategic management in order to acheive a competitive advantage.
strategic entrepreneurship
Which is the most common customer segment in the introductory stage of the industry life cycle?
technology enthusiasts
A significant difference between the early majority and the late majority is that ____________
the late majority is not confident in using new technologies
The primary Reason incumbent firms are vulnerable to disruptive innovations is that _______________
they are too committed to existing products to make rapid changes in the face of disruptive innovations
First-mover disadvantages can include which of the following
- The need to educate potential customers about the products benefits -The need to continuously perfect a product. -the need to find distribution channels
Innovations can __________
-make existing products or businesses obsolete -provide firms with a competitive advantage.
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?
Consolidate
True or False: Innovation can create value for one firm while destorying value for another.
True
True or False: The chasm seperating the early adopters from the early majority is the largest.
True
Which of the following is most likely to produce a radical innovation
a new sportswear company with a handful of employees that perform a number of loosely defined rolls
The explosive growth of the Apple Iphone was due in part to the network effects created by _____________
complementary apps
The process by which word-processor manufacturer Wang Laboratories captured the market from typewriter manufacturers, and which ecplains how it was later replaced by PC manufacturers and mobile-phone companies, is known as ____________
creative destruction
Introducing a new technology to an existing market to better address consumer needs is known as ____________ innovation
disruptive
At which stage of the industry life cycle does the size of the market expand rapidly?
growth
Establishing a solid stragegic position that competitors cannot easily imitate is the key objective of a company in the ________ stage.
growth
Firms that pursue a __________ strategy minimize the amount of resources devoted to product support in order to maximize cash flow.
harvest
A company that resists change and sticks to formalized business processes and structures is likely experiencing
organizational inertia
The business structure that is linear and has producers at one end and consumers at the other is know as ________
pipeline
A firm that successfully leverages network effects can _________
push its industry into the growth stage
During the introductory state of the indursty life cycle, an innovator will likely devote most of his time, money, and effort to ____________
research and developement
Which of the following metrics are used by social entrepreneurs to evaluate performance
-people -profits -planet
The process in which change agents create new products or processes at significant economic risk is known as ____________
entrepreneurship
The primary objective of firms during the introductory stage of the industry life cycle is to ___________
establish themselves as a market participant themselves for furture growth.
During the decline stage of the industry life cycle, which strategic option requires firms to declare bankruptcy or undergo liquidation?
exit
Incumbent firms that are part of an innovation ecosystem are less likely to produce radical innovations because ___________
radical innovations disrupt established relationships within the ecosystem
Innovation helps firms acheive a competititve advantage by _______
Redifining the market in their favor
During the growth stae of the industry life cycle, firms focus on process innovation in order to _____________
-increase production volume -reduce per-unit production costs
Which of the following statements about the industry life cycle are true?
-not all industires go through the entire life cycle -industries can be rejuventated, even during the decline stage.
Which of the following are characteristics of the early majority?
-they rely on reviews by reputable magazines -They weigh benefits and cost carefully -They have a strong sense of practicality
Which of the following are advantages of platform businesses compared to pipeline businesses.
-they unlock new sources of value creation and supply -they scale more efficiently by eliminating gatekeepers
Which of the following are ways in which standars can emerge?
-through market competition -by being impose by government or other agencies
Place the S curve development of most industries in order, with the first step at the top.
1. Demand for a new product is slow to take off 2. Demand accelerates 3. demand decelerates 4. demand turns to zero 5. demand becomes negative as a market contracts
Which of the following are types of innovation?
1. Disruptivef 2. archetectural 3. radical 4. incremental
Which of the following are stages of the industry life cycle?
1. Growth 2. Introduction 3. Maturity 4. Decline 5. Shakeout
During the decline stage of the industry life cycle, some firms choose to consolidate, meaning that they ___________
Purchase rival firms in order to acheive near-monopolistic control of the industry
An incumberent firm in a winner -take-all market will typically seek to extend the time in can extract profits through ________
a focus on incremental innovations
An innovation that targets a new market with existing technologies is called a __________ innovation
architectural
The invention of small desktop copiers using the same technology as large, stand-alone copiers is an example of a __________ innovation
architectural
During the shakeout stage of the industry life cycle, process innovation __________
becomes more important
A disruptive innovation is more likely to be successful if it __________
captures the low end of the market first
During the decline state of the industry life cycle, product innovation efforts ___________
come to a halt
Using a ________ strategy, a firm continues to market its products at the same level despite a decline in consumer demand.
maintain
Which of the following is an example of creative destruction
mobile phones replacing traditional telephones
Increase in the value of a product or service that result from a coreesponding increase in the number of users are known as ____________
network effects
PixelPower is a small app developer seeking to enter the highly competititive mobile games idustry. In order to overcome the industry's barriers to entry and compete against incumbent firms, Pixel Power has an economic incentive to _____________
pursue radical innovations
Innovations that taret NEW markets and represent a major break from existing technologies or ways of thinking, such as the digital cameram the touch-screen smart phone, or the decoding of the human genome, are examples of ___________ innovations.
radical
Winners in the shakeout stage are generally ___________
the cost leaders
