Instructor’s Manual
ANSWERS TO OPENING CASE QUESTIONS
1. Is the Tesla Model S a radical innovation or an incremental innovation?
Competence enhancing or destroying, and from whose perspective? Is it a
component or an architectural innovation?
May students will argue that the Model S is an incremental innovation in that
a) electric vehicles already existed, and b) the main changes have been in
things like the range, the speed, the layout of the batteries, and the
2. What factors do you think influence the rate at which consumers have
adopted (or will adopt) the Tesla Model S?
Some of the major factors that have influenced adoption of electric vehicles
generally are:
-Cost (electric vehicles are signi&cantly more expensive than internal
combustion comparable cars, because the price of batteries is thus far
signi&cantly higher than the price of an internal combustion system)
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Instructor’s Manual
3. Where do you think electric vehicle battery technology is on the
technology s curve?
Ideally the instructor should have a few different sets of students draw their
curves on the board and where they think electric vehicles are on them – that
will encourage a discussion about why some students may perceive the
vehicles as being further along the curve than others. Many will perceive
4. Do you think Tesla Motors will be pro&table? Why or why not?
This often turns into a lively and heated debate. To organize the conversation,
the instructor could divide the board into four quadrants:
Pro Con
Currently…
In the future…
ANSWERS TO DISCUSSION QUESTIONS
1. What are some of the reasons that established firms might resist the adoption of a new
technology?
Early on the decision not to invest in a new technology can be financially justified (on the
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Instructor’s Manual
1. Their focus on improving the processes supporting the current technology has decreased
their ability to identify and respond to a technological discontinuity. In other words, the
2. The complexity of the knowledge underlying new technologies is also part of the answer,
particularly if the knowledge needed is tacit in nature. Acquiring tacit knowledge often
3. In addition, the degree to which firms must develop new complementary resources also
plays a role. If firms must make large investments in time, money, or both, in the
4. It may also be the case that firms, like individuals, also have traits that lead them to be
2. Are well-established firms or new entrants more likely to a) develop and/or b) adopt new
technologies? What are some reasons for your choice?
Simply put, new firms do not have the “baggage” that incumbent firms have. They have not
made any financial or learning investments in the incumbent technology. In addition they are
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Instructor’s Manual
3. Think of an example of an innovation you have studied at work or school. How would
you characterize it on the dimensions described at the beginning of the chapter?
Students will bring a wide variety of experience to answering this question. They should address
4. What are some of the reasons that both technology improvement and technology
diffusion exhibit s-shaped curves?
The dynamics underlying the s-curve shape of technology performance improvement and rate of
diffusion are related but also different. For example, improvements in a technology’s
performance are likely to translate into faster adoption rates. In both processes, performance
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Instructor’s Manual
5. Why do technologies often improve faster than customer requirements? What are the
advantages and disadvantages to a firm of developing a technology beyond the current
state of market needs?
Industries identified in the text as improving their underlying technologies faster than customer
requirements include microprocessors, software, motorcycles, and electric vehicles. The driving
6. Are their some industries in which you would expect to see particularly short technology
cycles? Are their some industries in which you would expect to see particularly long
technology cycles? What might be some of the factors that influence the length of
technology cycles in an industry?
Students are likely to come up with a variety of answers to this question; some of the more likely
might revolve around factors such as fixed costs, competitive rivalry, the degree of
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Instructor’s Manual
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Education