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Although Mountaintop Electronics still sells its DVD players, a product in its decline stage, the investments made by the company on improving or marketing the product are very low. The company has allocated the least amount of human and financial capital to this department. Which of the following strategies has Mountaintop Electronics adopted in this scenario?


A) harvest strategy
B) maintain strategy
C) consolidation strategy
D) differentiation strategy

E) None of the above
F) B) and C)

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Which of the following businesses is most likely to disrupt an existing industry?


A) Closer Connex developed an earphone that receives emails and text messages and converts them to voice messages. The first models had poor reception, but they rapidly improved over time.
B) Mega Technologies reconfigured the components used in its touchscreen tablets to create a new type of wearable device for use in restaurants and other service industries.
C) Particle Inc. developed a teleportation technology that can transport physical materials instantaneously across great distances.
D) Altrea added advanced camera technology to its premium line of smartphones so that they would take the highest-quality photos of all phones on the market.

E) A) and B)
F) All of the above

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Ira can be categorized under the late majority customer segment. Which of the following behaviors is he most likely to exhibit?


A) He will be confident in her ability to master any new technology.
B) He will prefer to buy from well-established brands rather than unknown new ventures.
C) He will not rely on endorsements by the early majority or early adopters.
D) He will buy beta versions of new products and technology.

E) A) and C)
F) A) and B)

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How has Apple been able to sustain its competitive advantage in the smartphone industry?


A) by reducing its network effects
B) by targeting its new products and services toward laggards
C) by driving the price for the end user to zero
D) by regularly introducing incremental improvements in its products

E) C) and D)
F) A) and B)

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Which of the following most accurately describes a difference between incremental innovation and radical innovation?


A) Incremental innovation researches new materials; radical innovation researches new processes.
B) Incremental innovation targets new markets and technologies; radical innovation reinvents markets and technologies.
C) Incremental innovation builds on an established knowledge base; radical innovation uses an entirely different knowledge base.
D) Incremental innovation draws on novel methods; radical innovation draws on proven methods.

E) B) and C)
F) A) and C)

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CordKing Electronics has entered a stage in which the demand for their innovative fax machines has declined. Now most customers are buying replacement parts or buying their second fax machine from the firm. What stage in the industry life cycle does this scenario describe?


A) growth stage
B) maturity stage
C) shakeout stage
D) decline stage

E) A) and B)
F) All of the above

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On which of the following tenets is the crossing-the-chasm framework, suggested by Geoffrey Moore, based?


A) The number and size of competitors remain constant throughout the industry life cycle.
B) Each stage of the industry life cycle is dominated by a different customer group.
C) Industries tend to follow an unpredictable industry life cycle.
D) The supply and demand sides of the market remain constant irrespective of the phase of the industry life cycle.

E) A) and D)
F) B) and C)

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Which of the following is a drawback of using the industry life cycle as a framework to guide strategic choice?


A) The framework believes that the life cycle of industries is unpredictable.
B) The framework does not explain everything about changes in industries.
C) The framework is based on the tenet that industries can be rejuvenated even in the declining stage.
D) The framework believes that the number and size of competitors remain constant throughout the life cycle.

E) B) and C)
F) A) and B)

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In a radical innovation, a firm targets


A) existing markets by using new technologies.
B) new markets by using existing technologies.
C) new markets by using new technologies.
D) existing markets by using existing technologies.

E) A) and D)
F) B) and C)

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Why do incumbent firms favor incremental innovation over radical innovation?

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Incumbent firms favor incremental innova...

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At the time when Ellen decided to purchase a tablet computer, the product had just become accessible to the mass market. She did not purchase the tablet until after she was convinced that the benefits it would offer her would far exceed its price. Also, she waited for her friends to try the product and popular gadget television shows to endorse it. Which of the following customer segments does Ellen best represent?


A) laggards
B) technology enthusiasts
C) early adopters
D) early majority

E) A) and B)
F) None of the above

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Which of the following scenarios would be characteristic of an entrepreneur?


A) Rachel implemented a new and more efficient way to produce pottery.
B) Mary imitated a new, more efficient method of producing pottery.
C) Alissa scaled back the production of pottery because it wasn't cost effective.
D) Ursula used a proven marketing method to advertise her pottery.

E) B) and C)
F) A) and D)

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Which of the following is a feature of the shakeout phase of the industry life cycle?


A) There is rapid industry growth during this stage.
B) Market demand in this stage primarily consists of first-time adopters.
C) Competitive intensity within the industry increases.
D) The mode of competition shifts from price to non-price in this stage.

E) C) and D)
F) A) and D)

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The demand for flip phones has drastically reduced, and there are only a few consumer electronics companies selling them at extremely low prices. Also, the current buyers of flip phones are mainly categorized under laggards. Which of the following stages of the industry life cycle is the flip phone industry in currently?


A) growth stage
B) maturity stage
C) decline stage
D) commercialization stage

E) A) and D)
F) A) and B)

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To be successful and to survive the shakeout stage of the industry life cycle, a firm should


A) charge higher prices than its competitors.
B) focus on product innovation rather than process innovation.
C) gain economies of scale.
D) shift from price to non-price competition.

E) A) and B)
F) All of the above

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Potomac Industries is a manufacturer of high-definition televisions. The industry has gone through a period of rapid growth and expansion, and has started to experience a decline in the rate of growth. Several smaller firms have been bought out by larger competitors, and competition for market share is intensifying. Which of the following strategies is most likely to give Potomac a competitive advantage?


A) Implement process innovations that lower per-unit costs.
B) Introduce product innovations that differentiate Potomac televisions from the competition.
C) Imitate the features of the highest-selling television on the market.
D) Increase spending on marketing and attempt to acquire a high-profile celebrity spokesperson.

E) A) and B)
F) A) and C)

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The best way for a firm to keep its proprietary technologies, recipes, or formulas secret is to obtain a patent.

A) True
B) False

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Which of the following is an example of social entrepreneurship? The committee approved the new formula for an all-purpose cleaner because it


A) cleaned better than other cleaners and used easy-to-obtain ingredients.
B) cleaned better than other cleaners and did not cost more to produce.
C) cleaned as well as other cleaners and could be produced more efficiently.
D) cleaned as well as other cleaners and used organic ingredients.

E) All of the above
F) A) and B)

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Explain some of the features of the introduction stage of the industry life cycle.

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When an individual inventor or company l...

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What is an invention?


A) the transformation of an idea into a new product or process
B) a unique idea that has not been thought of before
C) the transformation of an idea into a successful product
D) a unique idea that has been patented

E) B) and C)
F) A) and B)

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