CHAPTER 2

Question 1
Which of the following is a disadvantage of agglomeration economies?

Competitors serving a local market can lead to competition that reduces their pricing power in their
relationships with both buyers and suppliers.
Cluster of firms can attract other firms to the area.
Supplier and distributor markets grow to service the cluster.
Cluster of firms may make local labor pool more valuable by giving them experience.

Question 2
Which of the following does the likelihood of innovative activities being geographically clustered depend on?

Nature of underlying knowledge base

Mobility of the labor pool
Strength of protection mechanisms
Cultural context of the technology

Question 3
It refers to the benefits firms reap by locating in close geographical proximity to each other.

Knowledge Brokers
Agglomeration Economies
Technology Cluster
Technological spillover

Question 4
Technological clusters occurs when the benefits from the research activities of one firm (or nation or other entity) spill
over to other firms (or nations or other entities).
Select one:
True
False

Question 5
Collaborative research is important in high-technology sectors where individual firms rarely possess all necessary
resources and capabilities.
Select one:
True
False

Question 6
Bayh-Dole Act of 1980 allows universities to collect royalties on inventions funded with taxpayer dollars.
Select one:
True
False
Question 7
Institutions designed to nurture the development of new business that might otherwise lack access to adequate funding
or advice are called

government alliances.
science parks.
incubators.
research collaboration areas (RCAs).

Question 8
Incubators are regional districts, typically set up by government, to foster R&D collaboration between government,
universities, and private firms.

True
False

Question 9
Organizations that manufacture products such as light bulbs for lamps, or DVDs for DVD players are examples of
___.

moderators
complementors
incubators
lead users

Question 10
Regional districts that are set up by the government to foster R&D collaboration between government, universities,
and private firms are typically called ___.

free trade areas

science parks
complementors
technological trajectories

Question 11
______approach to research and development assumed that innovation proceeded linearly from scientific discovery,
to invention, to engineering, then manufacturing activities, and finally marketing.

Applied Research
Science push
Demand pull
Basic Research

Question 12
Leslie, a biologist, works in the research and development department of a chemical company. The company has
assigned her to study the reproduction processes of various insects to develop an effective technique to control insect
damage to crops. The type of research Leslie is engaged in is called ___ research.

Research and development

Science push approach
Basic research
Applied research

Question 13
Innovation often originates with those who create solutions for their own needs.

True
False

Question 14
User innovators typically create new product innovations in order to profit from the sale of the innovation to customers.

True
False

Question 15
The science- push approach to research and development argued that innovation was driven by the perceived demand
of potential users.

True
False

Question 16
The following are the most important intellectual abilities except:

Intelligence
Knowledge
Personality
Memory

Question 17
He noted that primary process thinking was most likely to occur while dozing, when distracted by music, doing
physical exercises and other activities.

Mathias Benedek
Aljoscha Neubauer
Sigmund Freud
Elon Musk

Question 18
An individual with only a moderate degree of knowledge of a field often succeed in producing more creative solutions.
 True
False

Question 19
An individual is more likely to be creative if he works on things he is genuinely interested in and enjoy.

True
False

Question 20
The primary engine of innovation is:

Individuals
Universities
Firms
Private Organizations

CHAPTER 3

Question 1
In the s-curve technological improvement, it typically shows slow initial improvement, then accelerated, and diminish
over time

True
False

Question 2
It is a technology that fulfills a similar market need by building on an entirely new knowledge base.

Discontinuous technology
Technology improvement
Technology trajectory
Incumbent technology

Question 3
Technological discontinuity may have lower performance than the current technology.

True
False

Question 4
Steeper s-curve of disruptive technology does not signify higher returns.

True
False

Question 5
Technology improvement is the spread of technology through the population.

True
False

Question 6
S-curves can be used to predict or assess the limit of a certain technology.

True
False

Question 7
Most often used to represent the technology’s rate of performance improvement or its rate of adoption in the
marketplace.

Technology improvement
Technology trajectory
Incumbent technology
Discontinuous technology

Question 8
Radicalness might be conceived as the combination of oldness and the degree of similarity.

True
False

Question 9
It is often oriented toward improving the effectiveness or efficiency of production.

Incremental Innovation
Process innovation
Radical innovation
Product innovation

Question 10
Embodied in the outputs of an organization—its goods or services, even if those products are services.

Incremental Innovation
Process innovation
Competence-enhancing Innovation
Product innovation

Question 11
A type of innovation that perspective of a particular firm if the technology does not build on the firm’s existing competencies
or renders them obsolete.

Competence-enhancing Innovation
Product innovation
 Radical innovation
Competence-destroying Innovation

Question 12
If it entails changes to one or more components, but does not significantly affect the overall configuration of the system.

Component innovation
Competence-destroying Innovation
Competence-enhancing Innovation
Architectural innovation

Question 13
It entails changing the overall design of the system or the way that components interact with each other.

Architectural innovation
Competence-destroying Innovation
Competence-enhancing Innovation
Component innovation

Question 14
Type of innovation might not be particularly new or exceptional.

Process innovation
Competence-enhancing Innovation
Incremental Innovation
Product innovation

Question 15
Each of the above dimensions shares relationships with others.

True
False

Question 16
Schumpeter argued that it was the key driver of progress in a capitalist society.

Technological Discontinuity
Creative Destruction
Era of Ferment
Era of Incremental change

Question 17
Numerous studies of innovation have revealed recurring patterns in how new technologies emerge, evolve, are adopted, and
are displaced by other technologies.

True
False
Question 18
Technological discontinuity inaugurated a period of turbulence and uncertainty which Anderson and Tushman termed as?

Creative Destruction
Dominant Design
Era of Ferment
Era of Incremental change

Question 19
It establishes a stable architecture for the technology and enables firms to focus their efforts on process innovations that
make production of the design more effective and efficient or on incremental innovations to improve components within
the architecture.

Creative Destruction
Technological discontinuity
Dominant Design
Era of Incremental change

Question 20
Approach innovation with a skeptical air and may not adopt the innovation until they feel pressure from their peers.

Innovators
Early adopters
Late majority
Laggards

CHAPTER 4

Question 1
The platform ecosystem is a hierarchical organization.

True
False

Question 2
Modular is known as economies of substitution.

True
False

Question 3
Increasing returns to adoption means that the more a technology is adopted, the more valuable it becomes.

True
False

Question 4
The phenomenon in which firms accumulate knowledge that helps increase their future ability to assimilate
information is referred to as learning trajectory.

True
False

Question 5
Products that have a large installed base are likely to attract more developers of complementary goods.

True
False

Question 6
In 1980, Bill Gates introduced the CP/M-the dominant operating system for personal computers.

True
False

Question 7
A firm that is able to lock in its technology as a dominant design of a market usually earns huge rewards and may
dominate the product category through several product generations.

True
False

Question 8
A regulatory body decide when a firm become too dominant by comparing the value customers reap from network
externalities with the corresponding monopoly costs.

True
False

Question 9
Monopoly refers to the value customers reap as a larger portion of the market adopts the same good.

True
False

Question 10
When the value of a technology, product, or service depends upon the number of other entities using it, the
phenomenon is called network externality.

True
False

Question 11
It is a mutually dependent entity mediated by a stable core.
 Platform ecosystems
Modularity
Platform
Ecosystems

Question 12
An agreement binds the parties into a stickier and longer-term relationship.

Non-disclosure agreement
Exclusivity Contract
Agent Contract
Employment Contract

Question 13
All statements explain Modularity, except

Components can be separated and recombined

Increasing the range of possible product configuration
Offer more choices over function, design, scale, and other features
Difficult to customize, and there is no external compatibility

Question 14
The more a technology is adopted, ___.

The less possibilities for improvements are there in the technology and its applications.
The less valuable it becomes on account of (because of) market saturation.
The greater are the opportunities for development of complementary assets.
The more susceptible it becomes to decreasing returns of adoption.

Question 15
This refers to the benefit from using a good increase with the number of other users of the same good.

Network Externalities Value

Technology’s Stand-Alone Value
Network Externalities
Learning Effect

Question 16
Who developed the model that helps managers identify the different aspects of utility that a new technology offers to
its customers?

Nicolas Joseph Cugnot

W. chan Kim and Renee Mauborgne
Gary Kildall
Utterback and Abernathy

Question 17
The following are the stages of the buyer experience cycle except,
 Purchase
Convenience
Supplements
Disposal

Question 18
All statements explain Network Externality Value except

when the value of the product to users depends upon the number of product release by a certain company.
when the value of a technology, product, or service depends upon the number of other entities using it.
when a product's value to a user grows as more people use it in the same network.
the value of a technological innovation to users will be a function not only of its standalone benefits and cost, but also
of the value created by the size of its installed base and the availability of complementary goods.

Question 19
When users are comparing the value of a new technology to an existing technology, they are weighing a combination.
Which of the following is not part of that combination?

Subjective Information
Expectations for the future
Perceived Information
Objective Information

Question 20
This refers to the value customers reap as a larger portion of the market adopts the same good.

Network Externality Value

Network Externalities
Network External
Network Externality Returns

CHAPTER 5

Question 1
If the firm intends to refine an earlier entrant’s technology and beat the earlier entrant’s market, it must have:

Preemption of scarce assets

Brand loyalty and Technological leadership
Fast-cycle development processes
Parallel development process

Question 2
It is assumed that the timing of entry is a matter of

Assets
Choice
Market
Innovation
Question 3
Which of the following entrants is the first to sell in new product or service?

First movers
Earlier entrants
Early followers
Late entrants

Question 4
The company’s position as the ____ enables it to shape customer expectations about the technology’s form, features,
pricing, and other characteristics.

technology leader
first mover
market leader
early entrants

Question 5
Even if the technology characteristics are imitable, the first mover has an opportunity to build ____ before the entry
of other competitors.

reputation
brand image
market share
brand loyalty

Question 6
Firms that enter the market early can preemptively capture

scarce resources
customers
market share
capital

Question 7
Once buyers have adopted a good,

they must spend time becoming familiar with its operation.

they capture customers early.
they often face costs to switch to another good.
they can dominate the market.

Question 8
Which of the following does NOT belong to the first mover advantages?

Preemption of Scarce assets

Reaping increasing returns advantages
 Brand loyalty and technological leadership
Research and development expenses

Question 9
When firms develop technologies, they often rely on other producers of

different companies
market
enabling technologies
different products

Question 10
Which of the following does NOT belong to the first-mover disadvantages?

Undeveloped supply and distribution channels

Immature enabling technologies and complements
Research and development expenses
Exploiting buyer switching costs

Question 11
Firms that enter the market early can preemptively capture scarce resources.

True
False

Question 12
If buyers face switching costs, the firm that capture customers early may not be able to keep those customers.

True
False

Question 13
Even if the technology characteristics are imitable, the late mover has an opportunity to build brand loyalty.

True
False

Question 14
When new-to-the-world technologies are first developed, customers may have difficulty understanding the technology
and its role in life.

True
False

Question 15
Many innovations rely on complementary goods to ensure their performance.

True
 False

Question 16
A firm that has low capital resources can withstand a slow market off and can also invest in resources in accelerating
market takeoff.

True
False

Question 17
A first mover to the market may face considerable uncertainty about what product features customers will ultimately
desire and how much they will be willing to pay for them.

True
False

Question 18
The degree to which the technology represents an improvement over previous technologies increases a firm’s
likelihood of successful entry.

True
False

Question 19
All innovations require complementary goods.

True
False

Question 20
Many innovations rely on crucial enabling technologies to ensure their performance.

True
False

CHAPTER 6

Question 1
It is influenced by both the degree to which the industry is likely to attract new entrants and the height of entry barriers.

Bargaining power of suppliers

The threat of potential entrants
Bargaining power of buyers

Question 2
It is also influenced by the degree to which competitors are differentiated from each other.

Switching costs
 Complements
Rivalry

Question 3
It emphasizes the stakeholder management issues that are likely to impact the firm’s financial performance.

Normative stakeholder analysis

Internal analysis
Strategic stakeholder analysis

Question 4
It enable firms to quickly adapt to emerging markets or major technological discontinuities.

Dynamic intent
Core competency
Dynamic capabilities
Balanced scorecard

Question 5
What are the two commonly used tools for analyzing the external environment of the firm. (Select all that applies)

Porter’s five-force model and stakeholder analysis

Strategic and normative stakeholder analysis
External and internal analysis

Question 6
It involves identifying any entity with an interest in the firm, what it wants from the company, and what claims it can make
on the company.

Internal analysis
Stakeholder analysis
External analysis

Question 7
It is a measurement system that encourages the firm to consider its goals from multiple perspectives (financial, customer,
business process, and innovation and learning) and establish measures that correspond to each of those perspectives.

Balanced scorecard
Dynamic intent
Core competency
Dynamic capabilities

Question 8
It arises from a firm’s ability to combine and harmonize multiple primary abilities in which the firm excels into a few key
building blocks of specialized expertise.

Dynamic intent
Dynamic capabilities
Balanced scorecard
 Core competency

Question 9
It emphasizes the stakeholder management issues the firm ought to attend to due to their ethical or moral implications.

Internal analysis
Normative stakeholder analysis
Strategic stakeholder analysis

Question 10
If the supplier’s sales constitute a large portion of the firm’s purchases, the firm will be heavily reliant upon the supplier
and the supplier will have more bargaining power.

True
False

Question 11
The first step of a stakeholder analysis is to identify all the parties that will be affected by the behavior of the firm.

True
False

Question 12
Socially complex resources are resources of an intangible nature (such as knowledge) that cannot be readily codified.

True
False

Question 13
Mauborgne and Chan argue that effective performance measurement must be more than simple reliance on financial
indicators; it must be a coherent and integral part of the management process.

True
False

Question 14
Innovation and learning perspective goals include “accelerate and improve new product development” or “improve
employee skills.

True
False

Question 15
Sometimes core competencies can become core rigidities that limit the firm’s ability to respond to a changing environment.

True
False

Question 16
Dynamic capabilities enable firms to slowly adapt to emerging markets or major technological discontinuities.

True
False

Question 17
A company’s strategic intent is a long-term goal that is ambitious, builds upon and stretches the firm’s existing core
competencies.

True
False

Question 18
A dynamic capability arises from a firm’s ability to combine and harmonize multiple primary abilities in which the firm
excels into a few key building blocks of specialized expertise.

True
False

Question 19
Red Ocean Strategies create and capture new demand.

True
False

CHAPTER 7

Question 1
It is provided by firms that wish to take a minority equity stake in another firm’s technology development, often to gain
access to cutting-edge technology that they may wish to develop further should it prove technically and commercially
promising.

Independent Venture Capital

Capital Rationing
New Technology Ventures
Corporate Venture Capital

Question 2
These are emerging business entities during their early development and growth with exploitation of technologies and
transforming such technologies into new products or services for rapid business growth and development.

Corporate Venture Capital

Capital Rationing
Independent Venture Capital
New Technology Ventures

Question 3
This budget strategy that is focused on the Research and Development department is called _________.
 Capital Rationing
New Technology Ventures
Corporate Venture Capital
Independent Venture Capital

Question 4
This kind of venture capital manage a pool of Funds that they invest in projects they believe to have rapid Growth potential.

Independent Venture Capital

Old Technology Ventures
New Technology Ventures
Dependent Venture Capital

Question 5
Are private investors who fund projects without utilizing a venture capital limited partnership structure.

Angel Investors
Small Investors
Big Investors
Demon Investors
Question 6
It enables managers to use rigorous mathematical and statistical comparisons of projects, though the quality of the
comparison is ultimately a function of the quality of the original estimates.

Qualitative Method
Quantitative Method
Combine Method
Conjoint Analysis

Question 7
Are quantitative methods for assessing whether the anticipated future benefits are large enough to justify expenditure, given
the risks

Internal Rate of Return

Q-sort
Discounted Payback Period
Discounted Cash Flow

Question 8
The time required to break even on a project using discounted cash flows

Discounted Cash Flow

Discounted Payback Period
Internal Rate of Return
Q-sort

Question 9
It identifies the discount rate that makes the net present value of the investment zero and is difficult to calculate when cash
flows arrive in varying amounts per period because there can be multiple rates of return.

Discounted Payback Period

Q-sort
Discounted Cash Flow
Internal Rate of Return

Question 10
The application of stock option valuation methods to investments in nonfinancial assets

Internal Rate of Return

Unreal Options
Capital Rationing
Real Options

Question 11
Advanced R&D projects: pay off the quickest, and help service the firm’s short-term cash flow needs.

True
False

Question 12
Breakthrough projects: incorporate revolutionary new technologies into commercial application.

True
False

Question 13
Platform projects: not revolutionary, but offer fundamental improvements over preceding generations of products.

True
False

Question 14
Derivative projects: can take a long time to pay off (or may not pay off at all), but can position the firm to be a technological
leader.

True
False

Question 15
Screening Questions may be uses for different dimensions of the project decision including the Role of customer, Role of
capabilities, and Project timing and cost.

True
False
Question 16
Data Envelopment Analysis (DEA) uses linear programming to combine measures of projects based on different units (e.g.,
rank vs. dollars) into an efficiency frontier.

True
False

Question 17
Qualitative Analysis estimates the relative value individuals place on attributes of a choice which can then be used in
development and pricing decisions.

True
False

Question 18
Use qualitative methods to estimate the cash flows anticipated from a project when balancing their R&D portfolio on a
project map.

True
False

Question 19
Conjoint Analysis estimates the relative value individuals place on attributes of a choice.

True
False

Question 20
Multiple regression used to assess the degree to which an attribute influences rating. These weights quantify the trade-offs
involved in providing different features.

True
False