Deck 13: Creating New Business

Question 1

Curses that plague new businesses include success and substantial availability of resources.

Answer 1

True

Question 2

The highest rated brand on perceived innovativeness was iPod.

Answer 2

False

Question 3

Low-end disruptive innovation is where industries are altered by emerging products that feature a price that appears dramatically low. Incumbent firms often employ this strategy.

Answer 3

False

Question 4

True market pioneers often survive because they enter the market first and build position and are able to withstand technological advances.

Question 5

Innovation can create what is often termed as __________.

Question 6

Barriers to long term success in existing product-markets do not include which of the following:

A) Markets are so dynamic that this is easy to bet behind and become less relevant.
B) Overcapacity in existing markets.
C) Transparency issues.
D) Fast responses by competitors
E) Low cost benefit ratio for incumbent organizations.

Question 7

Many blue ocean businesses can take one of two approaches to lower price points: ____________ or ____________.

Question 8

Successful early market leaders tend to get traction in a smaller market before looking to the mass market.

Question 9

Kirin was unable to compete with Asahi in part because of the authentic label.

Question 10

Innovator's advantage provides the competitive advantages such as competitors' inability to respond in a timely manner, competitors' inability to respond at all, or that the innovator cultivates a customer loyalty with its position in the market.

Question 11

Transformational new business arenas can be based on offering a dramatically lower price point, analyzing alternative industries to find white space, offering a systems rather than components, building on customer insights or market trends and by collaborating with other people and firms.

Question 12

Successful early market leaders survive the difficulties of a first mover advantage by envisioning the mass market, maintaining managerial persistence, financial commitment, _____________ and _____________.

Question 13

The book suggests that one of six ways that new business is typically formed involves new distribution channels.

Question 14

Drucker advises innovators to try to innovate for the future.

Question 15

Blue ocean businesses and red ocean businesses both generally allow for above average earnings.