A sequential process has an early warning system to indicate that planned features are
not manufacturable.
Titles and names can be copyrighted.
In the U.S., patents are valid for a period of 17 years.
Joint ventures are less appropriate than strategic alliances when a firm places great
importance on access to other firms’ competencies.
Project managers of heavyweight teams are typically junior managers.
The Weekly News bought the paper mill that supplied paper for printing its magazine.
This is an example of horizontal integration.
According to the concept of innovation funnel, the number of successful products
launched will be greater than the number of raw ideas generated.
When demand is increasing, there is less revenue to go around and firms will
experience more competitive pressure.
Strategic fit refers to the degree to which potential partners have resources that can be
effectively integrated into a strategy that creates value.
According to Porter’s five-force model, the degree to which a firm relies on one or a
few suppliers will influence its ability to negotiate good terms.
If customers require extensive education and service, selling through mail order or
online ordering may be the best option.
If you are a first mover in the market of a new technology, you may find that your
product offerings will have to be revised as consumers reveal their preferences.
Difficulty in transition between successfully selling to early adopters versus the early
majority results in a chasm in the product’s diffusion curve.
Early followers enter the market only after a product begins to penetrate the mass
market.
Most innovative ideas do not become successful new products.
S-curves of technology diffusion are in part a function of the s-curves in technology
improvement.
The value of a technological innovation is solely determined by what the technology
can do.
Firms intending to maximize market share, typically use market skimming pricing
strategy.
Prosthesis Inc. is developing a superior prosthetic leg and has world-renowned
researchers on its staff. It also has the financial and marketing resources to take the
product to the market as it has done in the past. Most likely, Prosthesis will not need
take on a partner.
High degrees of formalization and standardization in firms results in organic structures.
There are more chances for a technology to be underdeveloped and its fit with customer
needs unknown in the _____ market stage.
a. very early
b. late
c. maturity
d. mass
Walter is the new director of R&D at Good Health, a pharmaceutical company. Which
of the following statements, made by Walter, indicates that he believes in the concept of
the innovation funnel?
a. “Innovation is a freewheeling process that is unconstrained by rules and plans.”
b. “While there are many potential new product ideas going in the wide end, very few
make it through the development process.”
c. “I believe that Good Health should limit new idea generation to save time and other
resources.”
d. “I believe that Good Health should allow all new ideas generated in the company to
make it to the development process.”
Which of the following types of international virtual teams takes the lead role in R&D
activities while also coordinating the R&D activities of the decentralized divisions?
a. Decentralized self-coordination
b. System integrator as coordinator
c. Core team as system architect
d. Centralized venture team
Fabmark Consultancy was asked by a client to evaluate the attractiveness of a potential
project to develop a new product line. The data provided by the client included cash
flow estimates (in dollars), ranking of marketability by the sales force, and ranking of
different product attributes from a potential customer focus group. Which of the
following methods would allow Fabmark Consultancy to combine this information and
analyze it?
a. Q-sort
b. Data envelopment analysis
c. Attribute ranking
d. Break-even analysis
Not-invented-here syndrome occurs when:
a. a division of a firm is reluctant to adopt other divisions’ innovations.
b. a firm tends to always adopt innovations developed by competitors.
c. an innovation is openly accepted without testing its suitability.
d. developers of a failed innovation refuse to take responsibility for its failure.
Alpen Inc. is a manufacturing firm that holds a patent for a new food processing
machine, which is considerably more efficient and safe. Being the only firm that
manufactures that product, Alpen Inc. charges a very high price for its products. This is
referred to as _____.
a. monopoly rent
b. technology lag
c. incumbent inertia
d. absorptive capacity
Money Club and Money ball are online platforms which allow their members to get in
touch with people from various business backgrounds. They also facilitate business
contracts between their members. Money Club has 6000 members, whereas Money ball
has 3500 members. This indicates that:
a. Money Club has a greater network externality.
b. Money Club has a lower positive consumption externality.
c. Money ball has a larger actual installed base.
d. Money ball does not use a dominant design.
Alpha Cleaning Equipment Co. wants to use the house of quality matrix in designing
and developing a new vacuum cleaning machine. What is the first step that Alpha
should take?
a. Identify customer requirements.
b. Determine the relative value or weight of customer requirements.
c. Identify engineering attributes that determine the performance of the vacuum cleaner.
d. Evaluate competing products to determine how well they meet customer needs.
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.
Which of the following is true of design for manufacturing (DFM) methods?
a. Considering manufacturing at an early stage of the design process can lengthen
development cycle time.
b. It fails to structure the new product development 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.
Future Electronics’ body scanning machine has been adopted by the larger portion of
the healthcare market. As a result, the company charges a high price from its customers,
mainly hospitals. It is not investing much on innovation and its product variety is also
very low. This cost borne by the users is referred to as:
a. marginal cost.
b. social cost.
c. monopoly cost.
d. deferred cost.
What is the net present value (NPV) of a project if the present value of cash inflow is
$10,000 and the present value of cash outflows is $5,000?
a. $2,000
b. $5,000
c. $10,000
d. $15,000
To ensure that companies do not receive patents in countries where they do not intend
on setting up production of the invention, some countries have a “working requirement”
that says:
a. if the product does not work, it will not be granted a patent.
b. patents will only be granted to people who have been working in their country for at
least one year.
c. the invention must be manufactured in the country where the patent was granted
within a specified period of time.
d. the workers who manufacture the product must be from the country where the patent
was granted.
The drawback to data envelopment analysis (DEA) is that it does not allow
comparisons of projects using multiple kinds of measures.
Which of the following helps organizations collectively achieve both efficiency and
flexibility?
a. Mechanistic structure
b. Organic structure
c. Modular system
d. Formalization
Digital cameras replaced film cameras. This is an example of _____.
a. modular innovation
b. incremental technology
c. component innovation
d. discontinuous technology
_____ is a positive externality from R&D resulting from the spread of knowledge
across organizational or regional boundaries.
a. Technological convergence
b. Technological determinism
c. Technological spillover
d. Technological cluster
The benefits firms reap by locating in close geographical proximity to each other are
known collectively as _____ economies.
a. agglomeration
b. closed
c. virtual
d. shadow
Ruth works in the advertising department of her company. It was observed that she
interacted more frequently and more intensely with team members who shared her
interests and social background and ignored others. This phenomenon exhibited by
Ruth is referred to as:
a. free riding.
b. social loafing.
c. homophily.
d. groupthink.
Which of the following statements is true of partly parallel development processes?
a. It enhances the probability that R&D will design products that are difficult to
manufacture.
b. It requires costly iterations between design stages.
c. It shortens overall cycle time.
d. It initiates product design after concept development is complete.
The Sapphire Crystal Company wants to tightly control R&D activities and achieve
specialization and economies of scale. At the same time, it wants to protect its core
competencies and avoid significant redundancy in R&D activities. The _____ strategy
is best suited to achieve this goal.
a. center-for-global
b. local-for-local
c. organic structure
d. disaggregation
According to Porter’s five-force model, the more suppliers there are, providing similar
supplies to a particular industry:
a. the less powerful those suppliers will be.
b. the more powerful those suppliers will be.
c. the higher is the level of vertically integration in the industry.
d. the less powerful buyers will be.