Question 1

Firm entry rates tend to be highest during the growth stage of an industry life cycle because:

Accepted Answer

Firm entry rates tend to be highest during the growth stage of an industry life cycle because there is a shortage of production capacity that keeps margins attractive, which attracts entrepreneurs and investors to invest in the industry, and also because of the growing legitimacy of the industry that attracts more resources to the industry. Thus, option (D) is the correct choice as it highlights both of these reasons.

Question 2

The transition from the introduction to growth phase of the industry life cycle features:

Accepted Answer

The transition from the introduction to growth phase is characterized by a shift in focus from product innovation to process innovation. This is because companies already have a basic product or service and now need to focus on improving their operations to meet growing demand. The other options are not necessarily associated with this specific transition.

Question 3

Organizational ambidexterity refers to the ability of a single organization to possess more than one organizational capability

Accepted Answer

The answer of Organizational ambidexterity refers to the ability of...

Question 4

Organizations are like people: their essential characteristics-including their capabilities-are formed in their early stages of development.

Accepted Answer

Just like individuals, organizations also undergo development and their essential characteristics are formed during their early stages of existence.

Question 5

A dominant design is best described as:

Accepted Answer

A dominant design refers to a common product architecture that emerges as a standard in an industry, often after a period of competition among different designs.

Question 6

Steve Jobs' insistence that Apple's development teams commit to "insanely great products" that combined seemingly-impossible performance attributes is an example of how "stretch goals" can combat organizational inertia.

Accepted Answer

Steve Jobs' commitment to "insanely great products" that pushed the limits of performance is a classic example of a stretch goal, which can help overcome organizational inertia by inspiring teams to aim higher than they might have thought possible.

Question 7

Which of the following developments is not a typical feature of the transition from the "introductory" to the "growth" phase of the industry life cycle?

Accepted Answer

The shift of production from advanced to emerging countries is not a typical feature of the transition from the "introductory" to the "growth" phase of the industry life cycle. The other options are typical developments during this transition, such as the emergence of a dominant design, the shift from product to process innovation, and rapid market penetration.

Question 8

A technical standard tends to emerge in an industry if:

Accepted Answer

The answer of A technical standard tends to emerge in...

Question 9

The duration of the industry life cycle:

Accepted Answer

The duration of the industry life cycle has become compressed as the pace of technological change has accelerated. This is due to increased competition, globalization, and innovation that have made the lifespan of a typical industry shorter than it used to be. The average lifespan of a company on the S&P 500, for example, has fallen from 67 years in the 1920s to just 15 years today.

Question 10

The different stages of the industry life cycles are defined primarily on the basis of:

Accepted Answer

The industry life cycle stages are primarily defined by the rate of growth of industry sales, which typically include introduction, growth, maturity, and decline phases.

Question 11

IBM's decision in the late 1970s to establish its new personal computer division in Florida,rather than close to its headquarters in New York state is an example of "contextual ambidexterity."

Accepted Answer

Contextual ambidexterity refers to an organization's ability to balance exploitation (refining existing capabilities) and exploration (innovating new capabilities) simultaneously, within the same business unit or team. IBM's decision to locate its personal computer division in Florida, away from its New York headquarters, is more related to strategic location choice and organizational structure rather than an example of contextual ambidexterity.

Question 12

Knowledge management is the application of information technology to management processes.

Accepted Answer

While information technology can certainly be used to support knowledge management, it is not the sole focus. Knowledge management involves the creation, sharing, and application of knowledge, including through organizational culture, training, and communication.

Question 13

The main forces driving industry evolution are:

Accepted Answer

Industry evolution is primarily driven by changes in technology and shifts in consumer demand, which influence how industries develop and adapt over time.

Question 14

Multiple scenario analysis is an approach to forecasting that relies heavily upon applying advanced statistical analysis to "big data."

Accepted Answer

Multiple scenario analysis involves creating and analyzing a range of possible future events or conditions to understand the potential impacts on decision-making, rather than relying heavily on advanced statistical analysis of big data.

Question 15

The steam engine was a disruptive innovation for the builders of ocean-going sailing ships because steam ships were initially slower and less reliable than sailing ships.

Accepted Answer

The steam engine was a disruptive innovation for the builders of ocean-going sailing ships because initially steam ships were slower and less reliable than sailing ships. However, as technology improved, steam ships eventually surpassed the speed and reliability of sailing ships.

Question 16

A major challenge for businesses that rely upon individual,tacit knowledge is that,unless that knowledge can be systematized and embodied in standardized processes,the growth prospects of the business are limited.

Accepted Answer

Tacit knowledge refers to knowledge that is difficult to formalize, codify, or transfer to others. This type of knowledge often resides in the minds of individual employees and is not easily captured or systematized. Therefore, businesses that rely on tacit knowledge face the challenge of how to transfer that knowledge to others within the organization or to new hires. If this knowledge cannot be systematized and embodied in standardized processes, the growth prospects of the business are limited.

Question 17

Dynamic capabilities are "higher order" capabilities that orchestrate change among operational capabilities.

Accepted Answer

Dynamic capabilities are like meta-capabilities that manage and integrate the routine operational capabilities of an organization to enable it to adapt and renew itself in response to changing environments and demands. They help firms to innovate and create new competitive advantages by coordinating, aligning and reconfiguring its resources, processes, structures, and systems.

Question 18

Which statement best describes the extent to which different industries conform to the same life cycle pattern?

Accepted Answer

While there may be similarities in the stages of the life cycle across industries, the duration of each stage can vary significantly. Some industries may experience longer periods of growth, while others may progress quickly from introduction to decline. Additionally, some industries may experience multiple cycles of growth and decline, while others may have a shorter overall life cycle. Therefore, the extent to which different industries conform to the same life cycle pattern is limited.

Question 19

The characteristic profile of an industry life cycle has an 'S' shaped curve because:

Accepted Answer

The 'S' shaped curve in an industry life cycle reflects the changes in rates of growth of market demand. Initially, the demand for a new industry/product is slow, but as it gains acceptance and popularity, the demand grows rapidly, leading to a period of rapid growth. Eventually, the market becomes saturated, and the growth rate slows down, reaching a mature stage where demand stabilizes. This generates an 'S' shaped curve. The other choices (A, B, and C) are not accurate explanations.

Question 20

If a firm pays closely to the needs of its existing customers,it is unlikely to be blindsided by disruptive technologies.

Accepted Answer

Focusing solely on existing customers can lead to overlooking emerging technologies and market shifts, potentially making the firm vulnerable to disruption by new entrants who leverage those technologies.

Quiz 8: Industry Evolution and Strategic Change