A service mark distinguishes the provider of a service rather than a product.
For a new technology to be successful in a market, it is enough for the new technology’s
stand-alone utility to exceed that of the incumbent standard.
If a firm willingly cannibalizes its existing products with more advanced products, the
firm can make it very easy for other firms to achieve a technological lead large enough
to prove persuasive to customers.
Discounted cash flow methods typically do not take into account the payback period.
Bundling relationships occur when firms encourage distributors to carry their products
by offering them guarantees (such as promising to take back unsold stock) or agreeing
to sell the product on consignment.
The learning curve indicates that the more units a company produces of an item, the
more each unit will cost.
A firm can signal its commitment to an industry by making substantial investments that
would be difficult to reverse.
Products that have a large installed base are likely to attract more developers of
complementary goods.
In industries characterized by network externalities, the value of a technological
innovation to users will be a function only of its stand-alone benefits and cost.
The terms research and development represent different kinds of investment in
innovation-related activities.
The “Buyer Utility Map” developed by Kim and Mauborgne cannot be applied to
industrial products.
According to Prahalad and Hamel, a company that has identified 30 capabilities knows
its core competencies.
Firms form alliances with competitors to jointly work on an innovation project or to
exchange information.
Upon calculation of its costs and cash inflows, if the net present value (NPV) of a
project is greater then zero then it generates wealth.
An innovation can be competence enhancing to one firm, while competence destroying
for another.
Joe’s Diner, a fast food restaurant, has recently added a children’s play area within its
premises that allows parents to dine in peace-while their children are safe in the playing
area. According to the Kim and Mauborgne’s model, Joe’s Diner is offering the _____
utility lever during the _____ stage of buyer experience cycle.
a. environmental friendliness, purchase
b. risk, supplements
c. convenience, use
d. simplicity, maintenance
Which of the following would be an example of a tacit resource?
a. An oddsmaker who works for a large casino in Las Vegas and is correct 95 percent of
the time
b. A boutique purchases hand-woven fabrics from local shops
c. A retail shoe chain that has prime locations in 200 malls across the country
d. A flashy ad campaign for a malt liquor
Which of the following is the correct sequence of steps for the science-push approach to
research and development?
a. Customers express an unmet need, R&D develops the product to meet that need, the
product is manufactured, and finally the marketing team promotes the product.
b. Scientific discovery leads to an invention, the engineering team designs the product,
it is manufactured, and finally the marketing team promotes it.
c. Marketing discovers a need, R&D comes up with the product concept which is
refined by engineering, the manufacturing team produces it, and finally the product is
sold.
d. Manufacturing sees a way to improve a product, the engineering team redesigns it,
and finally the marketing team creates awareness about the improved product.
Logan is a member of the marketing department of his company. His team deals only
with the operations related to marketing and the team members spend very little time,
approximately 7 percent, working on team-related activities. This is an example of the
_____ team structure.
a. cross-functional
b. functional
c. heavyweight
d. autonomous
According to Porter’s five-force model, if a buyer can threaten to backward vertically
integrate, it will:
a. decrease the buyer’s bargaining power.
b. increase the buyer’s bargaining power.
c. increase the supplier’s bargaining power.
d. lower the threat of entry into the industry.
The value of an electronic reader is related to the availability of books, journals,
magazines, etc. in a format that can be used in the electronic reader. For an electronic
reader, these are _____ goods.
a. complementary
b. substitute
c. Giffen
d. intermediate
Which of the following is true of contract manufacturing?
a. It enhances a firm’s in-house capabilities.
b. It allows firms to meet the scale of market demand by committing to long-term
capital investments.
c. It enables a firm to tap the greater economies of scale.
d. It decreases organizational responsiveness to the environment.
How can core competencies be leveraged more effectively?
a. By encouraging exchange of resources across strategic business unit boundaries
b. By binding managers too closely to their respective business units
c. By utilizing the same resources for all types of projects
d. By viewing individuals as being employed by a particular strategic business unit
Sally has come up with a unique recipe for cookies and has started selling them through
exclusive outlets all around Atlanta. The sales are skyrocketing and her friends tell her
to patent the recipe. However, she does not want to reveal her secret ingredients even to
any government agency. Is there anything she can do to keep the recipe legally
protected?
a. No, not unless she is willing to get her recipe patented.
b. Yes, her recipe can be considered a trade secret and she can legally prevent others
from benefiting from her recipe without her permission.
c. Yes, she can declare her recipe to be a trade secret and register it with the U.S. Trade
Secret Agency.
d. No, because the recipe, not being a tangible product cannot be protected.
The difference between copyrights and trademark protection is that:
a. trademark is an indicator used to distinguish the source of a good.
b. trademarks are a form of protection granted to works of authorship.
c. copyrights are established by legitimate use of the work.
d. copyrights can last as long as the copyright is in use.
Stevenson, a U.S. citizen, wrote a book called The Ten Commandments of Leadership.
He gave away copies of this book to the people who attended his workshops on
leadership. The copyright protection for this book:
a. is nonexistent unless Stevenson registers it with the Copyright Office.
b. is in effect from the time the book was created and fixed in a copy.
c. will be valid for only 20 years since the publication of the book.
d. will be valid till Stevenson dies.
NewDigger Inc. makes backhoes for digging ditches and trenches. It has developed an
acid which when poured on the ground, digs trenches of various depths depending on
how much is applied. The firm has recently started using this product commercially.
This would probably be considered a(n) _____ project for NewDigger.
a. derivative
b. platform
c. breakthrough
d. advanced R&D
Oswen Technologies Inc., a software developing company, spent a lot of money in
advertising software products that were not in the market. However, the firm hoped to
bring these products to the market at a later date. This is termed as _____.
a. puffery
b. vaporware
c. first refusal
d. advertising roll out
Scripts & Scrolls Co. supplies printing paper to select publishing houses. When its
customers asked for a discount in the cost of supplies, the company had to oblige
fearing that the customers might withdraw pending contracts. This shows the increased:
a. bargaining power of buyers.
b. bargaining power of sellers.
c. threat of substitutes.
d. vertically integration of buyers.
In the context of a firm’s product diffusion curve, when there is a chasm between the
early adopters and early majority customers:
a. the firm must reduce its production capacity.
b. the firm should improve its efficiency to target the mass market.
c. the early majority market becomes saturated.
d. the early majority market is ready to buy the product.
Which of the following statements is true regarding different types of innovations?
a. Process innovations are more visible than product innovations.
b. A radical innovation may over time become an incremental innovation.
c. Component innovations significantly affect the overall configuration of systems.
d. Architectural innovation is also called modular innovation.
Karen’s supervisor, while discussing about her participation in a new product
development team, tells her that she has been engaging in social loafing. This indicates
that Karen:
a. has been involved in whistle blowing activities.
b. has been discriminating against colleagues belonging to minority groups.
c. has not been putting much effort into the team’s work.
d. has stolen office property.
Angelo has designed a license plate holder for automobiles that makes theft of the
license plate practically impossible. He has filed an application for a patent through the
Patent Cooperation Treaty (PCT) office and it has been approved. How long does this
application protect his right to file for patent protection in the member countries?
a. 3 days
b. 6 months
c. 1 year
d. 2 ½ years
After much experimentation and trial and error, TechSmart launched a GPS-enabled
shoe into the market. It was the first company to introduce such footwear. Later, several
other firms also began to offer similar shoes. Which of the following is most likely to be
true for TechSmart?
a. TechSmart had incurred significant research and development expenses.
b. TechSmart’s ability to exploit monopoly rents will be low.
c. TechSmart will be able to exploit incumbent inertia of the late entrants.
d. TechSmart had to invest less on establishing distribution channels and generating
consumer awareness, compared to firms that entered the market after it.
A(n) _____ price strategy prices goods to cover variable costs and some fixed costs.
a. market skimming
b. penetration
c. survival
d. economy
Iris is quite skeptical about new innovations and is likely to adopt something new after
getting some pressure from her peers. However, she is not so risk averse that she will
wait until all uncertainty of a new technology has been resolved; she’s willing to accept
a little uncertainty if her peers already use the product. Which of the following adopter
categories does Iris belong to?
a. Early adopters
b. Innovators
c. Late majority
d. Laggards
Blue Water Publication is planning to sell its books solely through its Web site
BlueWaterbooks.com. By doing so, it ceases to require wholesalers and retailers. This is
an example of:
a. disintermediation.
b. backward compatibility.
c. value added reselling.
d. bundling arrangement.
Since a large company tends to have more bureaucracy, fixed costs, and commitments
to large numbers of employees, customers, and suppliers than smaller firms, you can
expect it to _____.
a. gamble more on big changes
b. be less responsive to technological changes
c. find it much simpler to monitor employees and reward them for their effort or success
at innovation
d. experience higher rates of new product success
TechToTeach Co. developed and sold a product which can be used by students to take
faster notes in a classroom as the teacher speaks. The device automatically records the
teacher’s voice and converts it into a text format. This new technology was widely
accepted by various universities and has been appreciated by students, thus increasing
the company’s inflow. This technology can be called a(n) _____ project by
TechToTeach.
a. advanced R&D
b. platform
c. breakthrough
d. derivative
Explain how computer-aided design and flexible manufacturing technologies help
create small niches in the market place. Provide an example to illustrate your answer.
What are the risks of championing?
Explain why sometimes the follower and not the first mover of a new technology is
more successful in the marketplace.
Dayton Regional Medical Center has decided to build a new wing for its outpatient
services. Dayton wants to know which services are important to its patients in this new
wing. Do they prefer large waiting rooms for family members or small rooms adjacent
to recovery rooms? Do they prefer patient advocates to keep them informed or would
nurses be better? What technique would be appropriate to come up with weights and
tradeoffs for these types of services? Explain why you consider the technique to be
most appropriate.
If you are looking for a location for your software development company why will you
consider Silicon Valley? What are the drawbacks to this location?
Explain how the real options method using stock options. Are there any drawbacks to
this method?
Why do technology start-ups face a much higher cost of capital than larger competitors?
Discuss the sources from which new technology start-ups can obtain external financing.
What are core competencies?
Explain the advantages and disadvantages of rewarding and promoting development of
the core competency.
What are the characteristics of collective research organizations?