(p. 226)-The customization of products and processes to a local market makes them
particularly difficult to transfer to divisions serving different markets.
(p. 57)-Firms cannot influence the shape of the s-curve through their development
activities.
(p. 242)-A company with a short development cycle can quickly revise or upgrade its
offering as design flaws are revealed or technology advances.
(p. 302)-Viral marketing is based on the fact that people are more receptive to, or have
greater faith in, information that comes through personal contacts.
(p. 272)-Heavyweight teams are suitable for platform projects.
(p. 101)-In industries that have increasing returns to adoption due to network
externalities, allowing competitors to get a head start in building an installed base is the
safest strategy.
(p. 165)-Firms can use strategic alliances to exploit their own capabilities by leveraging
them in another firm’s development efforts.
(p. 304)-In marketing a new product to the late majority and laggards, a company
should emphasize the advanced technological features of the new product.
(p. 52)-In the context of s-curves in technological improvement, performance
improvement in the early stages of a technology is rapid if the fundamentals of the
technology are poorly understood.
(p. 72)-The ability of an organization to recognize, assimilate, and utilize new
knowledge is referred to as learning trajectory.
(p. 2)-Technological innovation decreases the amount of output achievable from a given
quantity of labor and capital.
(p. 173)-A firm’s effectiveness at managing its collaborations will increase with the
number of collaborations to which it is committed.
(p. 93)-Early followers enter the market only after a product begins to penetrate the
mass market.
(p. 77)-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.
(p. 100)-When a market is characterized by mature enabling technologies, a firm should
enter the market late.
(p. 271)-Functional teams typically have a project manager or dedicated liaison
personnel.
(p. 3)-GDP does not directly relate to the amount of goods consumers can purchase.
(p. 223)-Modular products become more valuable when customers have heterogeneous
demands and there are diverse options for meeting them.
(p. 55)-S-curves of technology diffusion are in part a function of the s-curves in
technology improvement.
(p. 137)-Calculating the internal rate of return of a project typically must be done by
trial and error.
(p. 140)-While the value of a stock is independent of the call holder’s behavior, the
value of a R&D investment is not independent of the investor’s behavior.
(p. 195)-If you live in a country that is a member of the Madrid Union and you register
a trademark in your country, that trademark is protected throughout the world.
(p. 248)-Suppliers can contribute ideas for product improvement or increased
development efficiency.
(p. 304)-Marketing channels that enable high content and selective reach are
appropriate for innovators and early adopters.
(p. 35)-Proximity and interaction can directly influence firms’ ability and willingness to
exchange knowledge.
(p. 140)-The investor is an active driver of the value of an investment.
(p. 96)-Late entrants typically bear the bulk of the research and development expenses
for their product or service technologies.
(p. 1)-Globalization of markets has reduced the importance of innovation.
(p. 131)-The allocation of a finite quantity of resources over different possible uses is
known as research rationing.
(p. 116)-According to Porter’s value chain model, firm infrastructure is a primary
activity.
(p. 52)-When a technology’s performance is plotted against the amount of effort and
money invested in the technology, it typically shows slow initial improvement, then
accelerated improvement, then diminishing improvement.
(p. 76)-The influence of a dominant design can extend beyond its own technology
cycle.
(p. 5)-According to the concept of the innovation funnel, one new idea is usually
responsible for several new products.
(p. 275)-A contract book must be developed before a project charter can be written.
(p. 1)-Flexible manufacturing technologies have increased the importance of production
economies of scale.
(p. 27)-The science-push approach to research and development argued that innovation
was driven by the perceived demand of potential users.
(p. 218)-It is possible for organizations to have a highly decentralized mechanistic
structure.
(p. 272)-Heavyweight teams are typically permanent in nature.
(p. 247)-Astech Inc. has been developing a new graphic design software. The firm has
released a functional version of the software and has sent it to several lead users for
testing. Based on the feedback from the lead users, the firm is going to improve the
design of the product and begin commercial production. This initial version of the
product is referred to as the _____.
A. spiral model
B. substitute product
C. beta version
D. theta model
(p. 268)-At Tech Edge Inc., a special team is set up for making a robot capable of
assisting blind people in going about their daily activities. The members of the team are
taken from various areas of the firm, including R&D, marketing, manufacturing, and
distribution. The new team is put under the charge of a senior manager. This team is
most accurately an example of a:
A. cross-functional team.
B. laggard team.
C. homogenous team.
D. self-directed work team.
(p. 4-6)-Why is it important for a company to have a well-defined process for
strategically managing its new product development process?
(p. 72)-Clear Vision Inc. has been the market leader for vision care products such as
eyeglasses and lenses. It has also recently developed the use of laser technology to
correct eye defects. Due to its prior related experiences, it has been successful in
recognizing the value of new information and using it to develop new technologies
ahead of others. This phenomenon is called:
A. absorptive capacity.
B. disintermediation.
C. technology determinism.
D. technology retardation.
(p. 2)-If a country’s GDP stands at $4,867 billion, it means that the country’s _____ is
worth $4,867 billion.
A. total annual output
B. investment on technological innovation
C. savings with the World Bank
D. negative variance in budget
(p. 145)-Which of the following statements is true of conjoint analysis?
A. It is a simple method for ranking objects or ideas on a number of different
dimensions.
B. It is used by managers to compare their desired balance of projects with their actual
balance of projects.
C. It requires the creation of a hypothetical efficiency frontier.
D. -It is most commonly used to assess the relative importance to customers of different
product attributes.
(p. 247)-In the context of project development, an “antichampion” is:
A. a person who wishes to sabotage a new project.
B. a person who plays the role of the “devil’s advocate.”
C. a person who uses subjective criteria to evaluate a new project.
D. a person in a competing firm who sabotages market tests by promoting his
company’s products more heavily than normal.
(p. 195)-Stevenson, a U.S. citizen, wrote a book called The Ten Commandments of
Leadership. He gave away copies of the 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.
(p. 172)-Which of the following statements is true of a collective research organization?
A. It does not help firms to leverage their competencies.
B. It is a short-term commitment.
C. It is an effort to rapidly access capabilities or technology.
D. It allows a firm to share the cost and risk of basic research.
(p. 306)-Preadvertised products that are not actually on the market yet and may not
even exist are referred to as _____.
A. substitute products
B. value-added products
C. consignments
D. vaporware
(p. 254)-Omega Cleaning Corp. wants to use the house of quality matrix in designing
and developing a new vacuum cleaner. The use of house of quality is most likely to:
A. provide a common language and framework for members of a project team to use.
B. blur the relationship between product attributes and customer requirements.
C. conceal the competitive shortcomings of the company’s existing products.
D. hide design trade-offs.
(p. 259)-Which of the following measures assesses the ratio of a firm’s total profits from
new products to its total expenditures?
A. Return on innovation
B. Average cycle time of the innovation
C. Percentage of development projects meeting deadlines
D. Percentage of development projects within the estimated budget
(p. 50)-Dalton discovered that using garlic salt on a regular hamburger made the
hamburger taste more like steak. He could then use a less expensive meat in the
“smoked steak” sandwiches that he sold. This is an example of a(n) _____ innovation.
A. radical
B. discontinuous
C. architectural
D. component
(p. 194)-David and Sons Corp., a firm that manufactures home appliances, uses a
symbol resembling a lightning strike to distinguish its products from other similar
products in the market. This symbol is an example of a(n):
A. patent.
B. embargo.
C. statute.
D. trademark.
(p. 2)-Technological innovations increase:
A. the gross domestic product of an economy.
B. product life cycles.
C. the time required for product development and introduction.
D. the production costs of multiple product variations.
(p. 94)-Alpen Inc. is a manufacturing firm that holds the patent for a new food
processing machine that is considerably safer and more efficient than the others
available in the market. Being the only firm that manufactures this product, Alpen
charges a very high price for it. This is referred to as _____.
A. monopoly rent
B. technology lag
C. incumbent inertia
D. absorptive capacity
(p. 27)-Organizations that manufacture products such as light bulbs for lamps or DVDs
for DVD players are examples of _____.
A. moderators
B. lead users
C. complementors
D. incubators
(p. 93)-Doven Inc. pioneered software development in the 1970s and introduced its
range of office tools well ahead of its competitors. According to the classification
scheme of entrants, Doven would be classified as a(n) _____.
A. first mover
B. early follower
C. early leader
D. laggard
(p. 3)-Silk Work Inc., a manufacturer of silk garments, is planning to replace hand
weaving with some modern machines that run on fuel. Which of the following
consequences of this measure can be categorized as a negative externality?
A. Increased amount of output achievable from the given quantity of labor
B. Increase in the quality of the silk garments
C. Increased pollution as a result of the new technology
D. Increased need for investment to finance the modernization
(p. 96)-Which of the following is an advantage of being a late entrant into a market?
A. Late entrants are the first to capture scarce resources.
B. Late entrants often do not have to invest in exploratory research.
C. Late entrants often are most likely to capitalize on monopoly rents.
D. Late entrants are unaffected by switching costs.
(p. 80)-Oswen Technologies Inc., a software development 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. The software products
advertised before their availability are termed _____.
A. puffery
B. vaporware
C. first refusal units
D. advertising rollouts
(p. 36)-_____ are individuals or organizations that transfer information from one
domain to another in which it can be usefully applied.
A. Knowledge brokers
B. Incubation workers
C. Complementors
D. Category captains
(p. 299)-Super Alarm Inc. makes customized door security systems, which it sells under
its own brand name. These security systems require installation, extensive customer
education, and regular services. _____ would be the most appropriate selling method
for Super Alarm Inc.
A. Employing a direct sales force
B. Creating an online ordering system
C. Using a mail-order catalog system
D. Using a cannibalization strategy
(p. 269)-June is a member of a new product development team. Her supervisor asks her
about her experience in the team, and she replies, “Our team seems to be suffering from
homophily.” This statement means that:
A. team members are not exerting the expected amount of effort.
B. team members spend all their time chatting about their personal issues.
C. team members are only interested in talking to people who are senior to them.
D. team members only like other people whom they perceive as being similar to
themselves.
(p. 100)-Which of the following calls for an early entry into a market?
A. Immature enabling technologies
B. Unavailability of complementary goods
C. High customer uncertainty
D. Low entry barriers
(p. 119)-Which of the following statements is true of core competencies?
A. A firm’s core competency refers to a single ability.
B. A firm’s core competency is more than just a core technology.
C. An individual business unit has only one core competency.
D. A firm’s core competency is usually easy to imitate.
(p. 29)-The president of Mountain Home University has been asked by the board of
trustees to set up a separate unit to facilitate the commercialization of technology
developed by the research students at the university. Such a unit is typically called a
_____.
A. strategic business unit
B. commercialization office
C. technology transfer office
D. science park
(p. 94)-Jupiter Inc., a software firm, is starting to face competition from the new entrant
in its market, Coral Inc. Jupiter wants to prevent its existing customers from switching
to Coral’s newly developed software. Which of the following measures should Jupiter
adopt to achieve its objective?
A. Ensuring that customers find its software simpler and more convenient to use than
that of Coral
B. Keeping the initial cost of its software higher than that of Coral’s
C. Keeping the prices of the complements required for its software higher than that set
by Coral
D. Ensuring that fewer complementary products are available for its products in
comparison to that for the products of Coral
(p. 96)-Component technologies that are necessary for the performance or desirability
of a given innovation are referred to as _____.
A. architectural technologies
B. diffused technologies
C. primary technologies
D. enabling technologies
(p. 296)-The Rocketingbusiness.com Web site offers large volumes of business research
information for no cost. If a user is interested in more comprehensive information and
business consultation, the site offers these services for a premium fee. This is typically
an example of _____ pricing model.
A. penetration
B. market skimming
C. survival
D. freemium
(p. 271-272)-Which of the following statements is true of functional teams?
A. Functional teams consist of members from multiple areas in the firm such as R&D,
marketing, manufacturing, distribution, and so on.
B. The functional team structure provides little opportunity for cross-functional
coordination.
C. Functional teams are not appropriate for derivative projects that affect only a single
function.
D. Functional teams are usually permanent.
(p. 297)-Gerald Rupert is a retired race car driver. He is writing a book and planning a
video release to share his racing experiences. He is trying to decide whether to market
these items directly to consumers over the Internet or to use intermediaries. To make
this decision, he needs to know the pros and cons of each route. Provide the necessary
information and make a recommendation to him.
(p. 57)-Explain what Schumpeter meant by the term creative destruction.
(p. 37)-Explain the concept of technology spillovers. What are the factors affecting the
likelihood of technological spillovers?
(p. 217)-Explain why a mechanistic organizational structure stifles creativity.
(p. 71)-Explain how the more a technology is adopted, the better it becomes.
(p. 272)-The CEO of Bright Electronics Inc. has put together an autonomous new
product development team. He is now trying to decide the type of leader who should be
appointed to head the team. What should he look for in the leader of this team to
improve its chances of success?
(p. 199)-George has come up with a new computer program to help sellers manage
online auctions at sites such as eBay. It is more efficient than just using a spreadsheet to
track auctions. He would like his program to become the dominant design, but he also
wants to earn a profit from all his hard work. What can George do to most effectively
meet both these objectives?
(p. 120-121)-Explain the advantages and disadvantages of rewarding and promoting the
development of core competencies.
(p. 145)-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 the weights and trade-offs for these types of services? Explain why you consider
the technique to be most appropriate.
(p. 137)-What is the internal rate of return of a project? How is it calculated? What are
the drawbacks of using this method?
(p. 195)-What is a copyright? Discuss the provisions of the section 106 of the 1976
Copyright Act.
(p. 245)-What is a partly parallel development process? Is it universally used?
(p. 72)-What is absorptive capacity? Why do firms that fall behind the technology
frontier find it difficult to catch up?