A joint venture between two companies often results in a new separate company.
A firm’s strategic intent helps in the development of new businesses and markets.
Quasiformal structures foster interactions based on hierarchy rather than on interests.
The majority of effort and money invested in technological innovation comes from
non-industrial firms.
A firm that supports a technology that is not chosen as the dominant design will have
better potential to earn near-monopoly rents in the short run than a firm that develops a
dominant design.
Network externality returns refers to the value customers reap as a larger portion of the
market adopts the same good.
If a business discharges untreated chemical waste into local water bodies, it imposes a
negative externality on the community members.
While a maven with a valuable piece of information is likely to expose it to a great
number and diversity of people, the connector is likely to convey the information to
fewer people but in more detail.
The initial cost of a good itself can be a switching cost.
Cannibalization is the process by which a firm’s sales of one product diminishes as a
result of a substitute product offering by a competitor.
The degree to which innovative activities are geographically clustered is independent of
the national differences in the way technology development is funded or protected.
According to Bartlett and Ghoshal, for the transnational approach to R&D to work,
reciprocal interdependence among the divisions of a firm must be discouraged.
Proximity and interaction can directly influence firms’ ability and willingness to
exchange knowledge.
The credibility of a firm can influence the rate of adoption of its technology.
First movers typically invest more in exploratory research than late entrants.
For a very new product technology, market research will be of great help.
Low exit barriers intensify rivalry by making firms reluctant to abandon the industry.
A large perceived installed base can lead to a large actual installed base.
In an industry characterized by increasing returns to adoption, there can be powerful
advantages to being an early provider.
FaxWork Inc. wishes to start manufacturing compact and portable fax machines.
Though the initial investments and the risks associated with the project are quite high,
the anticipated future benefits are high too. With which of the following quantitative
methods can FaxWork assess and evaluate the new project to justify the expenditure?
a. Q-sort
b. Screening
c. Discounted cash flow analysis
d. The project map
Firms that develop new technologies ahead of others often try a number of unsuccessful
techniques before finding a solution that works well. This experimentation:
a. lowers the firm’s ability to recognize the value of new information.
b. lowers the firm’s ability to develop and enhance technologies.
c. makes it difficult for the firm to develop related technologies.
d. enables the firm to find related solutions and alternatives that work well.
Breaking Ventures Inc. realized that most parents are worried about their teenage
children going out on their own. Based on this information, the company developed a
device that could be fixed into the concerned person’s cell phone, and this device helped
parents keep track of their children’s location. This approach to research and
development is referred to as _____.
a. demand-pull
b. supply-push
c. science-push
d. research-pull
The Rocketingbusiness.com Web site offers large volumes of business research
information for free. If the 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
_____ 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
Which of the following is an example of an enabling technology for the computer
hardware industry?
a. Laptops gradually replacing desktops at workplace
b. Computer hardware has zero utility without a microprocessor
c. Employees using anti-glare eyeglasses to increase readability from computer screens
d. Availability of special chairs with back support for people who work for long hours
on computers
Pioneer Systems Inc. has a high degree of formalization. Employees in Pioneer Systems
are more likely to:
a. exhibit high levels creativity and experimentation.
b. feel empowered to implement new solutions.
c. face morale and motivation problems.
d. face ambiguity as a result of the lack of formal rules and procedures.
The replacement of eyeglasses by contact lenses is an example of a(n):
a. incremental technology.
b. component innovation.
c. discontinuous technology.
d. modular innovation.
Virtual teams are best defined as the teams in which the members:
a. are situated at a great distance from each other and collaborate intensively via
advanced information technologies.
b. are drawn from multiple functional areas in the firm such as R&D, marketing,
manufacturing, and distribution and they work at the company headquarters.
c. have the tendency to cooperate only with people whom they perceive as being similar
to themselves.
d. have the tendency of shirking their responsibilities and blaming one another for poor
performance.
The Vice President of Sunflower Computers is trying to decide on the composition of a
new product development team. If he chooses members who are from different
backgrounds, he can reap the benefits of:
a. a broader knowledge base.
b. lesser cross-fertilization of ideas.
c. homophily.
d. social loafing.
A delayed entry into a market with a new technology is preferred when:
a. support by complementary goods providers is initially high.
b. enabling technologies are initially less mature.
c. customer uncertainty is low in the beginning.
d. the scope for improving over previous technologies is high.
Perfecto Espresso is a coffeehouse located opposite Ching’s Kitchen, a restaurant.
According to Porter’s five-force model, the services and products provided by both are
most likely to be classified as:
a. complements.
b. competitors.
c. substitutes.
d. intermediates.
_____ refers to the degree to which partners have compatible objectives and styles.
a. Resource fit
b. Strategic fit
c. Capability complementation
d. Contractual fit
When the first personal computers were introduced, Bill started using a spreadsheet
program to maintain his accounts. Bill discovered that due to this new method his work
had become much slower and that if he typed in the wrong data, it led to more mistakes.
This illustrates that:
a. effort invested in an existing technology will reap higher returns than effort invested
in a new technology.
b. effort invested in the incumbent technology is much higher than effort invested in the
new technology.
c. initially, technological discontinuity may have lower performance than the incumbent
technology.
d. component innovations are more effective than architectural innovations.
David and Sons, a firm that manufactures home appliances, uses a symbol resembling a
lightening strike to distinguish their products from similar products in the market. This
symbol is an example of a(n):
a. patent.
b. embargo.
c. statute.
d. trademark.
Typically collocation of team members:
a. provides opportunities for rich face-to-face communication.
b. ensures that whistle-blowers are well protected.
c. reduces the cross-fertilization of ideas.
d. reduces opportunities for informal interaction.
Jupiter Systems is planning to develop a new telescope. The initial cost of the project is
estimated to be $600,000 with an anticipated recovery of $300,000, till perpetuity. The
payback period for this project is _____.
a. 6 months
b. 2 years
c. 4 years
d. 6 years
In the context of s-curve in technological improvement, plotting performance against
time will result in the same characteristic curve as plotting performance against effort,
only if:
a. speed, a function of performance, is relatively constant over time.
b. effort is relatively constant over time.
c. power, a function of performance, is relatively inconsistent over time.
d. effort varies over time.