Question 1

The typical four-step innovation process begins with

Accepted Answer

A)   the modification and recombination of an existing product or process.
B)   the presentation of an idea as findings derived from basic research.
C)   the commercialization of an invention by entrepreneurs.
D)   a competitor's attempt to imitate an innovation.E) B) and D)
F) A) and C)

Question 2

Which of the following is a feature of the growth stage of the industry life cycle?

Accepted Answer

A)   The consumer demand increases.
B)   The prices of goods begin to rise.
C)   The basis of competition moves away from process innovation.
D)   The number of competitors decreases.E) A) and D)
F) None of the above

Question 3

While the domestic airline industry is in the maturity stage of the industry life cycle, the internet-enabled appliance industry is in its growth stage. Which of the following can be inferred from the given data?

Accepted Answer

A)   The number of competitors will be greater in the domestic airline industry than the internet-enabled appliance industry.
B)   The internet-enabled appliance industry is ahead of the domestic airline industry in the industry life cycle.
C)   While the domestic airline industry is mostly free from excess capacity, the internet-enabled appliance industry will have new entrants.
D)   The mode of competition will be price-based in the internet-enabled appliance industry and will be non-price-based in the domestic airline industry.E) A) and D)
F) A) and C)

Question 4

General Electric (GE)  disrupted itself in the healthcare industry by

Accepted Answer

A)   replacing the top levels of the executive hierarchy.
B)   introducing inexpensive and smaller diagnostic devices in developing countries.
C)   saturating the global market with multiple diagnostic devices.
D)   targeting the comparatively less price-sensitive sections of the market.E) All of the above
F) A) and C)

Question 5

Network effects always lead to a virtuous cycle in which an increasing number of customers improves the quality of a product or service, thereby attracting more customers and continuing the cycle.

Accepted Answer

A) True 
 B)False

Question 6

When does a firm fall into the large competitive chasm between early adopters and early majority?

Accepted Answer

A)   when it cannot attract technological enthusiasts to try the beta versions of its products
B)   when it creates strong network effects during the growth stage
C)   when it fails to successfully launch a mass-market version of its product
D)   when the early majority create herding effects for its productsE) All of the above
F) B) and D)

Question 7

Briefly discuss the four strategic options firms have during the decline stage of the industry life cycle.

Accepted Answer

At the decline stage, managers generally...

Question 8

While cell phones with holographic keyboards are currently in the introduction stage of the industry life cycle, tablet computers are in the growth stage. In the context of this scenario, which of the following statements is true?

Accepted Answer

A)   The industry for cell phones with holographic keyboards will face greater competition than the tablet industry.
B)   While the industry for cell phones with holographic keyboards will focus more on product innovation, the tablet industry will focus more on process innovation.
C)   While the industry for cell phones with holographic keyboards can reap the benefits of economies of scale, the tablet industry will experience no such benefits.
D)   The industry for cell phones with holographic keyboards will face price competition, whereas, in the tablet industry, the mode of competition will be non-price.E) All of the above
F) A) and B)

Question 9

A firm's resistance to changes in the status quo is referred to as

Accepted Answer

A)   organizational parity.
B)   organizational liquidity.
C)   organizational inertia.
D)   organizational efficacy.E) A) and B)
F) None of the above

Question 10

Which of the following statements accurately brings out the distinction between the introduction and growth stages of the industry life cycle?

Accepted Answer

A)   There is more strategic variety in the growth stage when compared to the introduction stage.
B)   The number of competitors is more in the introduction stage than the growth stage.
C)   The market size for a new product or service is larger in the introduction stage when compared to the growth stage.
D)   While achieving market acceptance is the strategic objective during the introduction stage, the objective in the growth stage is to pursue a harvest strategy.E) C) and D)
F) B) and D)

Question 11

In developed economies, the electric car industry is in the introduction stage, and the industry for MP3 players is in the shakeout phase. What does this imply?

Accepted Answer

A)   The mode of competition in the electric car industry will be based on price, whereas in the MP3 player industry, the mode of competition will be non-price based.
B)   The industry for electric cars will focus more on product innovation, whereas in the MP3 player industry, the focus will be on process innovation.
C)   The electric car industry will move to the growth stage, whereas the industry for MP3 players will enter the growth stage next.
D)   The industry for electric cars will primarily pursue an integration strategy, whereas in the MP3 players industry, the focus will be on differentiation.E) A) and B)
F) B) and C)

Question 12

GoodGear is a mobile platform that matches independent fashion designers with consumers who want a personalized wardrobe. Which of the following initiatives would best allow GoodGear to fine-tune its offerings to better meet the needs of its consumers?

Accepted Answer

A)   allowing users to provide feedback to producers on the style and fit of clothing
B)   conducting anonymous phone surveys about consumers' fashion preferences
C)   hiring an outside consultant to evaluate the offerings of GoodGear's producers
D)   studying the financial records of various fashion design companies to determine trendsE) None of the above
F) All of the above

Question 13

Discuss the drawbacks of the industry life cycle.

Accepted Answer

Although the industry life cycle is a us...

Question 14

A new product often has a high price when it is launched because of a

Accepted Answer

A)   large investment in designing a product while producing small quantities.
B)   large investment in marketing a product while producing small quantities.
C)   large investment in designing a product while producing large quantities.
D)   large investment in marketing a product while producing large quantities.E) A) and B)
F) A) and C)

Question 15

As the inventor of hypertension medication, OneSure Pharmaceuticals (OSP)  Inc. was able to reap the benefits of economies of scale due to a large consumer demand for the drug. Even when competitors later developed similar drugs after the expiry of OSP's patents, regular users did not want to switch because they were concerned about possible side effects. Which of the following benefits does this scenario best illustrate?

Accepted Answer

A)   first-mover advantages
B)   social benefits
C)   network externalities
D)   fringe benefitsE) All of the above
F) A) and D)

Question 16

Define entrepreneurship. Who are entrepreneurs?

Accepted Answer

Entrepreneurship describes the process b...

Question 17

Which of the following statements is true of the early majority section of consumers?

Accepted Answer

A)   They come into the market during the introduction stage.
B)   They are unaware that many hyped new product introductions will fade away.
C)   They weigh the benefits and costs carefully when adopting a new product.
D)   They make up the smallest market segment.E) All of the above
F) B) and D)

Question 18

Which of the following scenarios best exemplifies a platform business?

Accepted Answer

A)   Devin purchases electronic parts from a variety of vendors and assembles them into inexpensive MP3 players that he sells to consumers.
B)   Myra operates an industrial test kitchen in which local growers bring their produce to local chefs, who use the kitchen to try new recipes and determine which produce to buy.
C)   Raul operates a consulting firm in which businesses hire him to assess deficiencies in their organizational culture.
D)   Gena founded a bike-based transportation company that offers environmentally-friendly rides to customers within a 25-mile radius.E) A) and B)
F) C) and D)

Question 19

It is important for a firm to win over the early majority section of the market to ensure the commercial success of an innovation because they

Accepted Answer

A)   are driven by technology concerns rather than the practicality of a new product.
B)   influence the purchase decisions of early adopters.
C)   enter into the market in large numbers, creating a herding effect.
D)   have the highest purchasing power when compared to the other customer segments.E) A) and B)
F) None of the above

Question 20

When the market for standalone Global Positioning System (GPS)  devices declined with the arrival of GPS-enabled mobile phones, Magnet Inc., a manufacturer of GPS devices, bought out most of its rivals that were planning to exit. This allowed the company to get rid of all the excess capacity and acquire a monopolistic market power in the declining industry. Which of the following strategies has Magnet adopted in this scenario?

Accepted Answer

A)   harvest strategy
B)   maintain strategy
C)   consolidation strategy
D)   differentiation strategyE) A) and B)
F) All of the above

Exam 7: Business Strategy: Innovation, Entrepreneurship, and Platforms

When does a firm fall into the large competitive chasm between early adopters and early majority?

Correct Answer
verified

While cell phones with holographic keyboards are currently in the introduction stage of the industry life cycle, tablet computers are in the growth stage. In the context of this scenario, which of the following statements is true?

Correct Answer
verified

It is important for a firm to win over the early majority section of the market to ensure the commercial success of an innovation because they

Correct Answer
verified

Which of the following statements accurately brings out the distinction between the introduction and growth stages of the industry life cycle?

Correct Answer
verified

While the domestic airline industry is in the maturity stage of the industry life cycle, the internet-enabled appliance industry is in its growth stage. Which of the following can be inferred from the given data?

Correct Answer
verified

A firm's resistance to changes in the status quo is referred to as

Correct Answer
verified

Which of the following scenarios best exemplifies a platform business?

Correct Answer
verified

Which of the following is a feature of the growth stage of the industry life cycle?

Correct Answer
verified

General Electric (GE) disrupted itself in the healthcare industry by

Correct Answer
verified

Network effects always lead to a virtuous cycle in which an increasing number of customers improves the quality of a product or service, thereby attracting more customers and continuing the cycle.

Correct Answer
verified

Define entrepreneurship. Who are entrepreneurs?

Correct Answer
verified
Entrepreneurship describes the process b...
View Answer

GoodGear is a mobile platform that matches independent fashion designers with consumers who want a personalized wardrobe. Which of the following initiatives would best allow GoodGear to fine-tune its offerings to better meet the needs of its consumers?

Correct Answer
verified

Discuss the drawbacks of the industry life cycle.

Correct Answer
verified
Although the industry life cycle is a us...
View Answer

Briefly discuss the four strategic options firms have during the decline stage of the industry life cycle.

Correct Answer
verified
At the decline stage, managers generally...
View Answer

In developed economies, the electric car industry is in the introduction stage, and the industry for MP3 players is in the shakeout phase. What does this imply?

Correct Answer
verified

Correct Answer
verified

Which of the following statements is true of the early majority section of consumers?

Correct Answer
verified

The typical four-step innovation process begins with

Correct Answer
verified

Correct Answer
verified

A new product often has a high price when it is launched because of a

Correct Answer
verified

Exam 7: Business Strategy: Innovation, Entrepreneurship, and Platforms

When does a firm fall into the large competitive chasm between early adopters and early majority?

Correct AnswerverifiedShow Answer

While cell phones with holographic keyboards are currently in the introduction stage of the industry life cycle, tablet computers are in the growth stage. In the context of this scenario, which of the following statements is true?

Correct AnswerverifiedShow Answer

It is important for a firm to win over the early majority section of the market to ensure the commercial success of an innovation because they

Correct AnswerverifiedShow Answer

Which of the following statements accurately brings out the distinction between the introduction and growth stages of the industry life cycle?

Correct AnswerverifiedShow Answer

While the domestic airline industry is in the maturity stage of the industry life cycle, the internet-enabled appliance industry is in its growth stage. Which of the following can be inferred from the given data?

Correct AnswerverifiedShow Answer

A firm's resistance to changes in the status quo is referred to as

Correct AnswerverifiedShow Answer

Which of the following scenarios best exemplifies a platform business?

Correct AnswerverifiedShow Answer

Which of the following is a feature of the growth stage of the industry life cycle?

Correct AnswerverifiedShow Answer

General Electric (GE) disrupted itself in the healthcare industry by

Correct AnswerverifiedShow Answer

Network effects always lead to a virtuous cycle in which an increasing number of customers improves the quality of a product or service, thereby attracting more customers and continuing the cycle.

Correct AnswerverifiedShow Answer

Define entrepreneurship. Who are entrepreneurs?

Correct AnswerverifiedEntrepreneurship describes the process b...View AnswerShow Answer

GoodGear is a mobile platform that matches independent fashion designers with consumers who want a personalized wardrobe. Which of the following initiatives would best allow GoodGear to fine-tune its offerings to better meet the needs of its consumers?

Correct AnswerverifiedShow Answer

Discuss the drawbacks of the industry life cycle.

Correct AnswerverifiedAlthough the industry life cycle is a us...View AnswerShow Answer

Briefly discuss the four strategic options firms have during the decline stage of the industry life cycle.

Correct AnswerverifiedAt the decline stage, managers generally...View AnswerShow Answer

In developed economies, the electric car industry is in the introduction stage, and the industry for MP3 players is in the shakeout phase. What does this imply?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements is true of the early majority section of consumers?

Correct AnswerverifiedShow Answer

The typical four-step innovation process begins with

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A new product often has a high price when it is launched because of a

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
Entrepreneurship describes the process b...
View Answer

Correct Answer
verified

Correct Answer
verified
Although the industry life cycle is a us...
View Answer

Correct Answer
verified
At the decline stage, managers generally...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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