(p. 269)-Homogeneous teams should possess more information, on average, than
heterogeneous groups.
(p. 137)-Standard discounted cash flow analysis has the potential to severely
undervalue a development project’s contribution to a firm.
(p. 84)-Network externality returns refers to the value customers reap as a larger portion
of the market adopts the same good.
(p. 73)-Products that have a large installed base are likely to attract more developers of
complementary goods.
(p. 218)-If a firm codifies all of its activities with detailed procedures, it may stifle
employee creativity.
(p. 215)-A firm’s prior success in the market increases its ability to respond to new
technological generations. This is known as an Icarus Paradox.
(p. 171)-After licensing a technology, a firm typically has limited discretion over what
it can do with the technology.
(p. 194)-A service mark distinguishes the provider of a service rather than a product.
(p. 29)-The decline in the government share of spending on R&D is largely due to the
rapid increase in industry R&D funding rather than a real decline in the absolute
amount spent by the government.
(p. 136)-According to the net present value method of discounted cash flow analysis,
the time required to break even on a project using discounted cash flows is known as
period of return.
(p. 229)-The transnational approach to R&D leverages resources and capabilities that
exist anywhere within a firm and deploys them when and where any opportunity arises.
(p. 73)-In a market characterized by network externalities, the benefit from using a
good decreases with an increase in the number of other users of the same good.
(p. 223)-In a loosely coupled structure, development and production activities achieve
coordination through tight integration.
(p. 255)-In the context of design rules for fabricated assembly products, minimizing the
number of parts for a product reduces direct labor and material handling costs.
(p. 32)-Collaborative research is prohibited in high-technology sectors.
(p. 29)-Typically, the intellectual property policies of a university embrace both
patentable and unpatentable innovations.
(p. 111)-Formulating a technological innovation strategy first requires an accurate
appraisal of where the firm currently is.
(p. 36)-The degree to which innovative activities are geographically clustered is
independent of the national differences in the way technology development is funded or
protected.
(p. 256)-Using computer-aided design (CAD) to build and test product design increases
cycle time.
(p. 73)-Network externalities cannot arise in markets that do not have physical
networks.
(p. 294)-If a firm wishes to avoid giving away its own installed base or complementary
goods advantages to others, it may protect them by ensuring its products are
incompatible with those of future entrants.
(p. 256)-Computer-aided manufacturing (CAM) is faster and more flexible than
traditional methods of manufacturing.
(p. 138)-From a real options perspective, the value of a call stock option is zero as long
as the price of the stock is more than the exercise price.
(p. 272)-In heavyweight teams, the long-term career development of individual
members rests with their project managers rather than their functional managers.
(p. 50)-For a firm to adopt a component innovation, it requires architectural knowledge
about the way components link and integrate to form a whole system.
(p. 21)-Sometimes, monetary rewards undermine creativity by encouraging employees
to focus on extrinsic rather than intrinsic motivation.
(p. 71)-The learning curve indicates that the more units a company produces of an item,
the more each unit will cost.
(p. 138)-From a real options perspective, the exercise price associated with
commercializing a new technology would include the cost of manufacturing, marketing,
and distributing the technology.
(p. 222)-Quasiformal structures foster interactions based on hierarchy rather than on
interests.
(p. 27)-Firms often form alliances with competitors to jointly work on an innovation
project or to exchange information in pursuit of innovation.
(p. 96)-First movers typically invest more in exploratory research than late entrants.
(p. 256)-In the context of failure modes and effects analysis, which of the following
formulas is used to calculate the risk priority number?
A. Risk priority number = total profits from new products/total expenditures
B. Risk priority number = total profits from new products – total expenditures
C. Risk priority number = successful projects/total project portfolio
D. Risk priority number = severity × likelihood of occurrence × inability of controls to
detect
(p. 298)-Blue Water Publication Corp. 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 most accurately an example of:
A. disintermediation.
B. backward compatibility.
C. value added reselling.
D. bundling arrangement.
(p. 96)-Which of the following statements is true of a firm entering a market too early?
A. Distribution channels required for the firm’s products will be well established prior
to its entry.
B. Enabling technologies and complements available to the firm will be immature.
C. The firm’s competitors would have already captured controlling shares of the market.
D. The firm will not be able to reap the advantages of monopoly rent.
(p. 275)-Members of a virtual team:
A. must be located in the same office.
B. may live great distances apart.
C. are always collocated.
D. must belong to the same country.
(p. 27)-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 that 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.
(p. 102)-New innovations typically tend to:
A. be adopted very slowly at first.
B. eliminate incumbent inertia for late entrants.
C. eliminate monopoly rents when they are first introduced.
D. reduce the effectiveness of future enabling technologies.
(p. 78)-The U.S. Postal Service now offers a “Click-N-Ship” online service where users
can buy and print postage and labels online. According to the Buyer Utility Map, the
U.S. Postal Service is offering the _____ utility lever, during the _____ stage of buyer
experience cycle.
A. risk; use
B. fun and image; maintenance
C. convenience; purchase
D. environmental friendliness; disposal
(p. 5)-Jordan, the CEO of Early Bird Corp., believes that it is important to focus on the
quantity of new product ideas generated rather than the quality of ideas generated. He
encourages everyone in the company to come up with product ideas, and those that
seem feasible are further developed. According to him, it takes several raw ideas to
develop one successful new product. Jordan’s views reflect the concept of:
A. innovation adolescence.
B. innovation diffusion.
C. innovation readiness.
D. innovation funnel.
(p. 71)-The more a technology is adopted:
A. the less valuable it becomes on account of market saturation.
B. the more susceptible it becomes to decreasing returns of adoption.
C. the greater are the opportunities for development of complementary assets.
D. the lesser are the possibilities for improvements in the technology and its
applications.
(p. 271)-Albert has put together a new product development team based on the
functional team structure. Which of the following statements is most likely to be true
about this team?
A. Team members will spend up to 50 percent of their time on team-related activities.
B. The team will typically require dedicated liaison personnel.
C. The team will have a high degree of cross-functional integration.
D. The team structure will be straightforward to implement.
(p. 221)-Which of the following statements is true of skunk works?
A. They are isolated from the mainstream organization to which they belong.
B. They have a mechanistic structure.
C. They are bound by the demands of the rest of the organization.
D. They are teams that face high degrees of centralization of authority and bureaucracy.
(p. 215)-In the 1980s and 1990s, Neon Corp. was the most successful firm in the
television market. The firm believed that its competitors would never be able to produce
televisions comparable to its quality and cost. As a result, it was unable to respond to
the new generations of television with which its Japanese competitors had begun to
infiltrate the market. Eventually, Neon lost its market leadership to its competitors. This
scenario most clearly exemplifies the _____.
A. Giffen effect
B. Hawthorne effect
C. Idiosyncrasy Credit
D. Icarus Paradox
(p. 29)-Institutions designed to nurture the development of new businesses that might
otherwise lack access to adequate funding or advices are called _____.
A. complementors
B. research collaboration offices
C. incubators
D. technology clusters
(p. 165)-Gerden Price Corp. and New Ware Systems Inc. formed an alliance to develop
a new line of technologically advanced cooking stoves. Which of the following would
be the most likely outcome of this alliance?
A. Faster product delivery to the market
B. Increased market development and penetration times
C. Lesser opportunities to pursue other projects
D. Reduced overall flexibility
(p. 37)-_____ is a positive externality from R&D resulting from the spread of
knowledge across organizational or regional boundaries.
A. Technological discombobulation
B. Technological determinism
C. Technological spillover
D. Technological dissonance
(p. 148)-Data envelopment analysis (DEA) utilizes linear programming.
(p. 302)-_____ marketing is an attempt to capitalize on the social networks of
individuals to stimulate word-of-mouth advertising.
A. Ambush
B. Viral
C. Test
D. Real-time
(p. 76)-Which of the following statements is true of dominant design?
A. It is not possible to have legally induced adherence to a dominant design.
B. When a firm’s technology is locked in as the dominant design of a market, it earns
low rewards.
C. A firm that supports a technology that is chosen as the dominant design is in a poor
position to shape the evolution of the industry.
D. A firm may find itself locked out of the market if it is unable to adopt the dominant
technology.
(p. 193-194)-Joe’s Burgers Corp. is a famous fast-food chain that uses a picture of a
cook in a red hat as its symbol. It would not be legal for you to sell hamburgers with the
same identification picture as that of Joe’s Burgers because that would be a(n):
A. patent violation.
B. trademark violation.
C. embargo violation.
D. trade secret violation.
(p. 164)-Allured Architecture Inc. collaborated with Maze & Matiz Corp. to form a new
architecture firm called AllureAmaze Inc. Both the firms had a significant equity stake
in the new entity. This collaboration would most accurately be termed a(n) _____.
A. licensing project
B. joint venture
C. outsourcing maneuver
D. contract alliance
(p. 85)-When are winner-take-all markets good for consumers?
A. When monopoly costs exceed the value of network externality returns
B. When monopoly costs exceed the value of technological utility
C. When the monopoly cost curve is extremely steep
D. When the value of technology utility and network externality returns exceeds
monopoly costs
(p. 114)-Scripts & Scrolls Corp. 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 suppliers.
C. threat of substitutes.
D. vertical integration of buyers.
(p. 93)-The first entrants to sell in a new product or service category are referred to as
_____.
A. pioneers
B. early leaders
C. early followers
D. laggards
(p. 103)-_____ require multiple stages of a new product development process to occur
simultaneously.
A. Incumbent development processes
B. Parallel development processes
C. Monopoly development processes
D. Slow-cycle development processes
(p. 296)-Speeding Horse Inc., a leader in the video game console market, is making its
new generation consoles backward compatible with its previous games. This means
that:
A. it is giving away its own installed base or complementary goods advantages to
competitors.
B. it is providing a significant incentive to the owners of its previously developed
consoles to buy the new console.
C. the transition of customers through product generations will become impossible.
D. a large range of complementary goods of the previous generations, mainly the
games, will lose its existing value and utility.
(p. 3)-Which of the following is true of externalities?
A. All externalities are negative in nature.
B. They are only borne by individuals responsible for creating them.
C. Technological innovation results in complete eradication of negative externalities.
D. Externalities can be in the form of benefits reaped by individuals.
(p. 254)-Which of the following statements is true of design for manufacturing (DFM)
methods?
A. It lengthens the development cycle time for products.
B. It increases the cost of production by reducing the number of parts involved in the
manufacturing process.
C. It is a method of facilitating integration between engineering and manufacturing.
D. It is a method by which firms identify potential failures in a system and classify
them according to their severity.
(p. 189)-Felix has designed a pair of sunglasses that can be folded and put into a case
that easily fits into a shirt or pant pocket. Felix wants to know if he can receive a patent
on this invention. Which of the following responses would be most accurate according
to U.S. patent law?
A. He cannot receive a patent as the invention is only eligible for a copyright
protection.
B. He cannot receive a patent since he is merely making the sunglasses more portable.
C. He cannot receive a patent as the invention is not useful.
D. He can receive a patent as the invention is a tangible product.
(p. 53)-When gutter shields were developed, they replaced gutter cleaning services
hired by homeowners to keep leaves and debris out of their gutters. In other words, the
same need was met by an entirely new technology. This is an example of a(n) _____
technology.
A. complementary
B. component
C. discontinuous
D. incremental
(p. 272)-Which of the following is an advantage of lightweight teams?
A. Lightweight teams are more stable as they are permanent in nature.
B. Lightweight teams do not have dedicated liaison personnel, and the members have
more decision-making authority.
C. The team structure of lightweight teams increases the possibility of homophily.
D. It is easier to coordinate activities in a lightweight team than in a functional team.
(p. 137)-If the net present value of a project is greater than zero, then the:
A. project cannot be carried out as the cash outflow is too high.
B. present value of cash outflows is higher than present value of cash inflow.
C. project will require 5 years to break even.
D. -project generates wealth.
(p. 164-165)-Greyer Corp. has developed a method of killing cancer cells with light in a
process called Photodynamic Therapy (PDT). While their scientists have the medical
knowledge, they are short on equipment, money, and marketing know-how. As a
consultant, what would you advise Greyer to do?
(p. 26)-Explain the terms basic research and applied research.
(p. 20)-What are the most important intellectual abilities for creative thinking? What is
the impact of knowledge on creativity?
(p. 58)-Briefly define Everett M. Roger’s five adopter categories and explain how a
marketer might use this knowledge.
(p. 228)-Oxygenic Corp. uses photodynamic therapy to treat cancer and has major
divisions in Germany, Russia, and the United States. The scientists in Russia develop
the cancer treatment methods, treatment clinics are organized in Germany, and the U.S.
division gathers the finance and markets the treatment methods. What type of strategy is
being employed by Oxygenic, and what are the advantages and disadvantages of this
type of strategy?
(p. 5)-Explain how an understanding of the innovation funnel might influence a
company’s view of research and development.
(p. 271)-Write a short note on functional teams.
(p. 80)-What is vaporware? What are its advantages?
(p. 93-94)-Why were other keyboards that claimed to be more efficient not able to
replace the QWERTY keyboard? Explain how this illustrates the need to consider
switching costs when introducing new technologies.
(p. 102-103)-Since SmartShoe Inc. is the market leader in the gliding shoe market, it
enjoys an excellent reputation. It is the pioneer of this new market and currently holds
40 percent market share. Now, SmartShoe wants to introduce a new range of orthopedic
shoes. Discuss how its reputation might affect the new product’s acceptance among
distributors and consumers.
(p. 138)-Explain how the real options method uses stock options. Are there any
drawbacks to this method?
(p. 103)-What assumptions underlie the use of timing of entry strategies into the market
for new products?
(p. 223-224)-Phoenix Motor Corp. is considering using a loosely coupled organizational
structure. They have asked for your evaluation of such a structure and if you would
recommend it for an automobile manufacturer. What will your answer be?
(p. 121-123)-What is the danger of not having a strategic intent? In your answer,
assume your company operates a hospital in a city with a population of 30,000 people,
located about 50 miles away from a large city.
(p. 147)-General Sys Inc. has gathered data to evaluate the attractiveness of a potential
project. It knows the cash flows expected under different scenarios. It has conducted a
focus group that ranks various product attributes, and it has the ranking of various
marketing techniques provided by a consulting company. What method should General
Sys use to evaluate this project? Why is this method the best one to use?
(p. 248)-Delta Cleaning Equipment Corp. is experimenting with a faster and quieter
machine to polish floors. To develop this concept, the company is contemplating using
the lead user method of concept development. How does this method work? What are
its advantages?
(p. 277)-In the forming of virtual teams, what criteria must be used to select team
members?
(p. 216)-Biotrue Inc. produces tissues and diagnostics substances for three market
segments: hospitals, universities, and pharmaceutical companies. The firm is trying to
decide whether to decentralize its R&D activities by division or not. You have been
called in as a consultant to explain the advantages and disadvantages of such a move.
What will your opinion be?