Question 1

Why is it easier for new entrants to involve in radical innovations when compared to incumbent firms?

Accepted Answer

A)   Unlike incumbent firms, new entrants do not have to face the high entry barriers, initially.
B)   New entrants are embedded in an innovation ecosystem, while incumbent firms are not.
C)   Unlike incumbent firms, new entrants do not have formal organizational structures and processes.
D)   Incumbent firms do not have the advantages of network effects that new entrants have.E) A) and D)
F) All of the above

Question 2

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

Accepted Answer

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 productsE) B) and D)
F) A) and D)

Question 3

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

Accepted Answer

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) C) and D)
F) B) and C)

Question 4

Which of the following is a competitive benefit experienced by the first mover firm in an industry?

Accepted Answer

A)   The first mover will be able to achieve a less steep learning curve.
B)   The first mover will be able to reduce the switching costs.
C)   The first mover will not have to patent its products or technology.
D)   The first mover will be able to reduce costs through economies of scale.E) B) and D)
F) None of the above

Question 5

Norce Autos Inc.allows its customers,suppliers,researchers,and the community in general to contribute their ideas toward new product developments.Customers and other interested stakeholders can let the company know what new features they want to see in their next car.If the company faces any technical complexities that its internal R&D team cannot solve,it posts the problem on its website and allows people from the external community to provide solutions.In this scenario,Norce Autos Inc.is primarily leveraging its

Accepted Answer

A)   economies of scope.
B)   open innovation model.
C)   razor-razor-blade business model.
D)   experience-curve effects.E) A) and B)
F) None of the above

Question 6

Which of the following is true of a disruptive innovation?

Accepted Answer

A)   It targets existing markets.
B)   It initially provides high-cost solutions to existing problems.
C)   It introduces a radical idea and creates a new industry.
D)   It attacks the market through a top-down process.E) A) and D)
F) A) and C)

Question 7

Digital photography replacing film photography would be an example of a(n)

Accepted Answer

A)   regressive innovation.
B)   radical innovation.
C)   architectural innovation.
D)   disruptive innovation.E) B) and C)
F) A) and C)

Question 8

First movers often have several competitive benefits including

Accepted Answer

A)   incremental effects.
B)   shakeout effects.
C)   network effects.
D)   experience effects.E) A) and B)
F) A) and C)

Question 9

Incumbent firms favor incremental innovation over radical innovation because

Accepted Answer

A)   their business decisions are independent of the other parties in their innovation ecosystem.
B)   radical innovation will disturb the existing power distribution within the firms.
C)   incumbent firms do not have formal organizational structures and processes like the way new entrants do.
D)   incremental innovations help firms sustain a permanent competitive advantage, whereas radical innovations only help gain a temporary advantage.E) A) and C)
F) A) and D)

Exam 7: Business Strategy: Innovation and Entrepreneurship

First movers often have several competitive benefits including

Correct Answer
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Incumbent firms favor incremental innovation over radical innovation because

Correct Answer
verified

Which of the following is true of a disruptive innovation?

Correct Answer
verified

Digital photography replacing film photography would be an example of a(n)

Correct Answer
verified

Which of the following is a competitive benefit experienced by the first mover firm in an industry?

Correct Answer
verified

Why is it easier for new entrants to involve in radical innovations when compared to incumbent firms?

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Exam 7: Business Strategy: Innovation and Entrepreneurship

First movers often have several competitive benefits including

Correct AnswerverifiedShow Answer

Incumbent firms favor incremental innovation over radical innovation because

Correct AnswerverifiedShow Answer

Which of the following is true of a disruptive innovation?

Correct AnswerverifiedShow Answer

Digital photography replacing film photography would be an example of a(n)

Correct AnswerverifiedShow Answer

Which of the following is a competitive benefit experienced by the first mover firm in an industry?

Correct AnswerverifiedShow Answer

Why is it easier for new entrants to involve in radical innovations when compared to incumbent firms?

Correct AnswerverifiedShow Answer

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

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Correct AnswerverifiedShow Answer

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

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