Question 1

Early followers typically bear the bulk of the research and development expenses.

Accepted Answer

A) True 
 B)False  False

Question 2

The text talks about the timing of entry strategies into the market for new products.What assumptions underlie the use of such strategies?

Accepted Answer

The assumption is that the company can come up with a new product or technology at any time it wants.To be able to take advantage of timing strategies for entry the firm must have a fast-cycle development process in place and it must have the financial resources to develop,produce,and market the product.

Question 3

U-Totem was one of the early entrants into the convenience market boom of the 1970s and enjoyed huge success in the Arizona market.However,these stores did not sell gasoline.When later entrants combined gasoline sales with convenience markets,U-Totem was slow to respond and lost market share.This is an example of

Accepted Answer

A)   incumbent inertia.
B)   technological retardation.
C)   an immature enabling technology.
D)   delayed market dominance. A

Question 4

Which of the following statements is true regarding first movers?

Accepted Answer

A)   First movers can build brand loyalty so long as technology characteristics are inimitable.
B)   Low switching costs work in favor of first movers.
C)   First movers are often more successful than later entrants.
D)   First movers can preemptively capture scarce resources.

Question 5

A delayed entry into the market is preferred when

Accepted Answer

A)   complementary goods are available.
B)   enabling technologies have matured.
C)   customer preferences are unknown.
D)   the ability to withstand early losses is high.

Question 6

Since SmoothShoe Inc.is the market leader in the gliding shoe industry,it enjoys an excellent reputation.It was the pioneer of this new market and currently holds 40 percent market share.Now SmoothShoe wants to introduce a new gliding shoe.Discuss how its reputation will affect its acceptance among distributors and consumers.

Accepted Answer

The answer of Since SmoothShoe Inc.is the market leader in...

Question 7

Which of the following statements is true regarding customer preferences?

Accepted Answer

A)   The importance of technological features to customers stays constant over time.
B)   Customers themselves are unsure about the importance of different features offered by a technology.
C)   All pioneers have faced customer uncertainty.
D)   Established customer preferences are undesirable by producers.

Question 8

All pioneers face customer uncertainty.

Accepted Answer

A) True 
 B)False

Question 9

Lee Peterson has invented a new product that detects water leaks due to broken pipes and sends out an alarm similar to a smoke alarm.However,Lee has very little personal money to invest in improving this new product.Seeing his initial technical success,major corporations have now entered the market with competing products.What will be the probable destiny of Lee Peterson's company?

Accepted Answer

A)   His company will most likely be overtaken by a larger company or it will go out of business.
B)   His company will remain in the top spot due to its head start.
C)   His company will enjoy commercial success because the entry of other companies will add more legitimacy to the product.
D)   His company will grow rapidly introduce several other related products.

Question 10

When Fisher Athletics wanted to provide better landing mats for gymnasts,it asked its supplier-North Carolina Foam Industries (NCFI)- to come up with a higher quality foam to use in its mats.NCFI represents a(n)_____ for Fisher Athletics.

Accepted Answer

A)   complementary competitor
B)   facilitative partnership
C)   enabling technology
D)   pioneer opportunity

Question 11

When enabling technologies are mature,you should wait to enter the market later.

Accepted Answer

A) True 
 B)False

Question 12

A technology that makes a dramatic improvement over previous generations or different technologies will take time to be accepted by customers on account of its radical differences.

Accepted Answer

A) True 
 B)False

Question 13

Joan had been using WordPerfect 5.1 for DOS for several years and was quite an expert in it.When her boss wanted her to change to a Windows-based system,Joan told him that it would slow her down and it would cost a lot of money to be trained on using such a new system.The is an example of

Accepted Answer

A)   consumer irrationality.
B)   high switching costs.
C)   technical influence.
D)   early entry continuation.

Question 14

Which of the following is not true regarding first movers?

Accepted Answer

A)   They can shape customer preferences.
B)   They can exploit incumbent inertia.
C)   They bear most of the R&D expenses.
D)   They can establish the precedent for product design.

Question 15

In the past,Apex Systems had successfully released 10 new products in the shoe gliding market.Today it is recognized as the market leader.It has just released a new shoe glider called SmoothShoe.How difficult will it be for Apex to get distributors to take on this new product?

Accepted Answer

A)   Very difficult because they will be reluctant to carry so many products of the same company.
B)   Somewhat difficult because it will just cannibalize current products.
C)   Not very difficult because they will trust in Apex's past record.
D)   Cannot be determined.

Question 16

A later entrant can produce a product that achieves a closer fit with market preferences.

Accepted Answer

A) True 
 B)False

Question 17

Jackson Laboratories has come up with a new diabetic blood sugar monitoring device that does not require patients to prick their fingers.It has determined that this new technology will offer a great advantage to customers,that no other competitors possess the capabilities to deliver it,and that the product will not be easily imitated by others.Jackson should enter the market

Accepted Answer

A)   early.
B)   late.
C)   in the middle of the pack.
D)   whenever it wants to.

Question 18

The tendency of firms to be slow to respond to changes in the industry environment due to their large size,established routines,or prior strategic commitments to existing suppliers and customers is known as:

Accepted Answer

A)   organizational passivity.
B)   organizational lethargy.
C)   incumbent inertia.
D)   incumbent apathy.

Question 19

Once buyers have adopted a good,they can easily switch to another good.

Accepted Answer

A) True 
 B)False

Question 20

In industries that have increasing returns to adoption,allowing competitors to get a head start in building installed base can be a safe strategy.

Accepted Answer

A) True 
 B)False

Exam 5: Timing of Entry Part Two Formulating Technological Innovation Strategy

Early followers typically bear the bulk of the research and development expenses.

The text talks about the timing of entry strategies into the market for new products.What assumptions underlie the use of such strategies?

Which of the following statements is true regarding first movers?

A delayed entry into the market is preferred when

Which of the following statements is true regarding customer preferences?

All pioneers face customer uncertainty.

When Fisher Athletics wanted to provide better landing mats for gymnasts,it asked its supplier-North Carolina Foam Industries (NCFI) - to come up with a higher quality foam to use in its mats.NCFI represents a(n) _____ for Fisher Athletics.

When enabling technologies are mature,you should wait to enter the market later.

A technology that makes a dramatic improvement over previous generations or different technologies will take time to be accepted by customers on account of its radical differences.

Joan had been using WordPerfect 5.1 for DOS for several years and was quite an expert in it.When her boss wanted her to change to a Windows-based system,Joan told him that it would slow her down and it would cost a lot of money to be trained on using such a new system.The is an example of

Which of the following is not true regarding first movers?

In the past,Apex Systems had successfully released 10 new products in the shoe gliding market.Today it is recognized as the market leader.It has just released a new shoe glider called SmoothShoe.How difficult will it be for Apex to get distributors to take on this new product?

A later entrant can produce a product that achieves a closer fit with market preferences.

The tendency of firms to be slow to respond to changes in the industry environment due to their large size,established routines,or prior strategic commitments to existing suppliers and customers is known as:

Once buyers have adopted a good,they can easily switch to another good.

In industries that have increasing returns to adoption,allowing competitors to get a head start in building installed base can be a safe strategy.