Question 1

Which of the following is NOT an example of an industry standard or dominant design?

Accepted Answer

The DSK simplified keyboard was never adopted as an industry standard.

Question 2

A core competency which is capital-intensive but critical for a firm creating and launching a new innovation is:

Accepted Answer

In the introductory stage, the core competency is R&D, which is necessary to create a new product category that will attract customers.

Question 3

The type of customers vital to a firm introducing a new innovation are the _________,who are willing to pay higher prices and like to tinker with new products.

Accepted Answer

Early adopters are vital to a firm introducing a new innovation because they are willing to pay higher prices and like to tinker with new products.

Question 4

When management modifies strategic objectives based on which stage an industry is in they are responding to a(n):

Accepted Answer

Management modifies strategic objectives in response to which stage of the industry life cycle the firm is competing in.

Question 5

Which of the following is NOT an important aspect of innovation?

Accepted Answer

Innovation is a novel and useful idea that is successfully implemented.

Question 6

After an industry has established a dominant design and the industry is in the growth stage,the basis of competition turns to:

Accepted Answer

Once an industry standard has been established and the industry enters the growth phase, the basis of competition turns to process innovations.

Question 7

A(n)____________ is the dominant design established during the growth stage of an industry life cycle once the market comes to agreement about the prevailing set of engineering features and design choices.

Accepted Answer

A standard or dominant design is established during the growth stage and is the agreed-upon set of engineering features and design choices for the industry.

Question 8

Six Sigma,lean manufacturing,and genetic engineering are examples of ___________ that deliver new ways to produce or deliver existing products or services.

Accepted Answer

Six Sigma, lean manufacturing, and genetic engineering are all examples of process innovations.

Question 9

Intel and Apple are innovators who entered the market during the introduction stage of an industry life cycle.All of the following are characteristics of this stage EXCEPT:

Accepted Answer

Keeping costs low is not a main objective when a firm initially introduces a new product or idea.

Question 10

As noted in Strategy Highlight 7.1,_______________ has created part of the growth of the Apple iPhone due to the apps that are available to users.These apps increase the value of the iPhone and thus more people want to own an iPhone with apps.

Accepted Answer

The availability of apps has led to large network effects for Apple.

Question 11

Generally,as the level of _________ innovation declines,the level of _________ innovation increases.

Accepted Answer

Generally, as the level of product innovation declines, the level of process innovation increases.

Question 12

Each of the following are important reasons to understand the strategic implications of an industry life cycle EXCEPT:

Accepted Answer

While competing in different stages, a firm should not copy the industry leader but rely on its own competencies.

Question 13

As evidenced by the European Union determining that GSM should be the industry standard for cell phones,dominant designs can be driven by top-down decisions made by:

Accepted Answer

Government bodies can set industry standards as evidenced by the European Union determining that GSM should be the standard for cell phones.

Question 14

During the growth phase of an industry life cycle,demand is strong and:

Accepted Answer

During the growth phase, both inefficient and efficient firms thrive.

Question 15

Although there are "first-mover advantages" when it comes to bringing a new innovation to the market,there are also disadvantages.Which of the following is NOT one of these disadvantages?

Accepted Answer

The firm building a reputation as an innovator is an advantage.

Question 16

The group of customers referred to as the ___________ lead the wave of increased demand as the industry moves from the introduction stage to the growth stage.

Accepted Answer

The early majority leads the wave of increased demand as the industry moves from the introduction stage to the growth stage.

Question 17

Innovation used as a sustained competitive weapon must be:

Accepted Answer

For innovation to be used as a competitive weapon, it must be continuous and commercialized.

Question 18

Each of the following are a distinct phase in an industry life cycle EXCEPT:

Accepted Answer

Plateau is not a distinct phase in an industry life cycle.

Question 19

After the Internet was introduced,its value increased exponentially as the number of users increased.This is the positive effect of a(n):

Accepted Answer

Network effects occur when the value of a product or service increases, often exponentially, with the number of users, as evidenced by the Internet.

Question 20

When a firm successfully commercializes a new product or service,it is able to extract temporary ______________ but must continue to innovate to sustain competitive advantage(s).

Accepted Answer

When a firm successfully commercializes a new product or service, it is able to extract temporary monopoly profits but must continue to innovate.

Quiz 7: Business Strategy: Innovation and Strategic Entrepreneurship