Question 1

In the markets for digital products, "platforms"-the principal type of interface within two-sided markets is an operating system.

Accepted Answer

A) True 
 B)False  True

Question 2

The market share leadership in smartphone operating systems possessed by Google's Android operating system reveals:

Accepted Answer

A)  It's generally better to be a follower than a first mover
B)  In digital markets where network externalities are present, Google's huge user base typically gives it a huge advantage over rivals
C)  Where network externalities are present, an open source strategy can often be effective in undermining a competitor's market share lead
D)  Strength in complementary resources and capabilities can allow a strong company to overcome the initial lead of an early innovator. C

Question 3

In video cassette recorders (VCRs), Matsushita's VHS format won against Sony's Betamax format because:

Accepted Answer

A)  VHS was technically superior to Betamax
B)  VHS VCRs were cheaper than Betamax VCRs
C)  Matsushita's licensing of its VHS format to other manufacturers of VCRs led to its gaining a lead in market share
D)  Sony entered the market too early C

Question 4

Research shows that across firms, R&D intensity and frequency of new product introductions is positively correlated with profitability

Accepted Answer

A) True 
 B)False

Question 5

In deciding when entering a new product market with an innovative product, an established company should be influenced mainly by :

Accepted Answer

A)  The principle that early-mover advantage is the key to success in new markets
B)  Reducing risk by waiting to see how technology and customer requirements will shape the emerging industry
C)  Identifying the optimal tradeoff between early-mover and follower advantages such that the firm's resources and capabilities can be most effective
D)  The potential to exploit network externalities in order to establish a dominant standard

Question 6

Monsanto's NutraSweet artificial sweetener, Pfizer's Viagra, and Pilkington's float glass process are innovations that are examples of:

Accepted Answer

A)  Weak regimes of appropriability because the innovations could not be patented
B)  Strong regimes of appropriability because of the effectiveness of patent protection
C)  Strong regimes of appropriability because the innovators possessed strong complementary resources
D)  Network externalities leading to a winner-take-all market

Question 7

If technological breakthroughs increase the feasibility of fuel cells as a means of propulsion for vehicles, the profits that can be earned from the developers of the fuel cell technology will be limited by:

Accepted Answer

A)  The greater environmental attractiveness of battery-powered electric vehicles
B)  The dependence of fuel cell technology on specialized investments by auto makers in designing new cars and fuel suppliers in supplying hydrogen refueling facilities
C)  The likely ineffectiveness of patents relating to fuel cells
D)  Lack of interest in vehicle owners in fuel cell technology

Question 8

It is difficult to be successful as a first mover unless your innovation has strong patent protection.

Accepted Answer

A) True 
 B)False

Question 9

Willie Wonka's (Charlie and the Chocolate Factory) commitment to secrecy suggests that his innovative candies probably lacked patent protection.

Accepted Answer

A) True 
 B)False

Question 10

The best strategy for exploiting an innovation depends on two major factors: first, the strength of the firm's intellectual property in the innovation and, second, the resources and capabilities available to the firm.

Accepted Answer

A) True 
 B)False

Question 11

'Freedom to design' refers to firms' ability to use each other's patents through a comprehensive cross licensing agreement

Accepted Answer

A) True 
 B)False

Question 12

Recognition tends to be more effective at motivating innovation than financial rewards.

Accepted Answer

A) True 
 B)False

Question 13

Cooperation with lead users is a useful tool of innovation management because:

Accepted Answer

A)  Lead users set the trend for the mass market
B)  Due to their price insensitivity, lead users tend to be the most profitable customers
C)  Lead users provide both information feedback and revenues that can assist ongoing product development
D)  Because lead users are so discerning, they provide both discipline and incentives

Question 14

"Network externalities" refer to:

Accepted Answer

A)  The benefits that firms derive from using social networks (such as Facebook and Google+)  in their marketing
B)  The value that the user of a product derives from the number of other users of the same product
C)  The costs and benefits that are borne by or received by society as a result of the actions of a business enterprise
D)  The consequences of platform-based competition

Question 15

When network externalities are present in a market, the typical outcome is:

Accepted Answer

A)  A winner-take-all market
B)  Monopolistic abuse requiring antitrust intervention
C)  More rapid technological innovation
D)  Lack of consumer choice

Question 16

The following industry offers a strong regime of appropriability for innovators:

Accepted Answer

A)  Financial services
B)  Processed food products
C)  Pharmaceuticals
D)  Handheld mobile devices.

Question 17

Being the leader in introducing an innovation to the market is usually better than being a follower.

Accepted Answer

A) True 
 B)False

Question 18

An organization's capacity for innovation depends primarily on the innate creativity of the people within the organization rather than the organization's internal environment.

Accepted Answer

A) True 
 B)False

Question 19

The main advantage of licensing as a means of exploiting an innovation is that the innovator can profit from the innovation without the need to invest in the complementary resources and capabilities required for commercialization

Accepted Answer

A) True 
 B)False

Question 20

The intellectual property of a firm comprises:

Accepted Answer

A)  Copyright and patents
B)  Patents, trademarks, copyrights, trade secrets, and goodwill
C)  The total of its intangible assets
D)  Patents, trademarks, copyrights, and trade secrets

Exam 9: Technology-Based Industries and the Management of Innovation

In the markets for digital products, "platforms"-the principal type of interface within two-sided markets is an operating system.

The market share leadership in smartphone operating systems possessed by Google's Android operating system reveals:

In video cassette recorders (VCRs) , Matsushita's VHS format won against Sony's Betamax format because:

Research shows that across firms, R&D intensity and frequency of new product introductions is positively correlated with profitability

In deciding when entering a new product market with an innovative product, an established company should be influenced mainly by :

Monsanto's NutraSweet artificial sweetener, Pfizer's Viagra, and Pilkington's float glass process are innovations that are examples of:

If technological breakthroughs increase the feasibility of fuel cells as a means of propulsion for vehicles, the profits that can be earned from the developers of the fuel cell technology will be limited by:

It is difficult to be successful as a first mover unless your innovation has strong patent protection.

Willie Wonka's (Charlie and the Chocolate Factory) commitment to secrecy suggests that his innovative candies probably lacked patent protection.

The best strategy for exploiting an innovation depends on two major factors: first, the strength of the firm's intellectual property in the innovation and, second, the resources and capabilities available to the firm.

'Freedom to design' refers to firms' ability to use each other's patents through a comprehensive cross licensing agreement

Recognition tends to be more effective at motivating innovation than financial rewards.

Cooperation with lead users is a useful tool of innovation management because:

"Network externalities" refer to:

When network externalities are present in a market, the typical outcome is:

The following industry offers a strong regime of appropriability for innovators:

Being the leader in introducing an innovation to the market is usually better than being a follower.

An organization's capacity for innovation depends primarily on the innate creativity of the people within the organization rather than the organization's internal environment.

The main advantage of licensing as a means of exploiting an innovation is that the innovator can profit from the innovation without the need to invest in the complementary resources and capabilities required for commercialization

The intellectual property of a firm comprises: