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76 Cards in this Set

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degree to which a firm is able to capture the rents from its innovation

Determined by how easily or quickly competitors can copy the innotvation


Legal rights granted by the government that exclude others from producing, using, or selling an invention

Must be useful, novel, and non obvious





Utility- protects new and useful processes, machines, manufactured items

Design- protects original designs

Plant- protect new varieties of plants

Patent Laws

Countries have their own laws

Some treaties seek to harmonize laws

Paris Convention for the Protection of Industrial Property

Forgeign nationals can apply for the same patent rights in member countries

Once applied can apply to different member countries and be treated as they applied on the same date

Patent Cooperation Treaty

Single PCT office and reserve the right to apply in more then 100 countries for up to 2.5 years

Establishes date of app. in all member countries

Covers must of the world


Trademarks and service marks; a word, phrase, symbol, design, or other indicator that is ised to distinguish the source of goods or services of one party from those of another


Copyright is a form of protection granted to works of authorship

Trade Secrets

info that belongs to a business that is generally unknown to others

Firms can protect info with disclosing info for a patent

Nature of Technology

Product vs. Process

Often it is difficult to protect process innovation

When an innovation is embedded in the process, trade secret could be a way to protect innovation

Tacit vs. Codified knowledge

Tacit knowledge: difficult to transfer: risk of imitation is low

Codified knowledge: easier to transfer : risk of imitation is high

Dominant Design Paradigm

Some situations, diffusing a technology may be more valuable that protecting it

Wholly Proprietary Systems

systems may be legally produced or augmented only by their developers

Wholly Open

may be freely accessed, augmented and distributed by anyone

Complementary Assets

Successful commercialization of an innovation requires a set complementary assets and capabilities

May include

Manufacturing Capabilities

Marketing capabilities

An innovation can be competence enhancing to one firm, while competence destroying foranother.


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


The time invested by buyers to become familiar with a product’s operation can be consideredas a switching cost.


New product development time increases when using strategic alliances and cross-functionalteams.


Late entrants typically bear the bulk of research and development expenses.


As firms’ routines and capabilities become more and more oriented around the dominantarchitecture, the firms become less able to identify and respond to a major architecturalinnovation


Late entrants typically bear the bulk of research and development expenses.


In the context of S-curve in technological improvement, plotting performance against time willresult in the same characteristic curve as plotting performance against effort, only if:

Effort is relatively constant over time

Iris is quite skeptical about new innovations and is likely to adopt something new after gettingsome pressure from her peers. However, she is not so risk averse that she will wait until alluncertainty of a new technology has been resolved; she’s willing to accept a little uncertaintyif her peers already use the product. Which of the following adopter categories does Irisbelong to?

Late majority

A CEO of a certain pharmaceutical company asked his consultant if it was a good idea toimplement the S-curve model to predict when a technology would reach its limits. Theconsultant identified a limitation with the use of the model. Which of the following is thelimitation identified by the consultant?

b. Unexpected changes alter the shape of a technology’s S-curve

Once a new product design becomes a dominant design:

The product design is adopted by the majority of producers

Which one of the following is the best indicator that a new business is learning?

Reliable forecast

Which one of the following is not an essential task to build a successful new business withinan established organization?

Breaking out

The term ___________ indicates that the product is novel to the individual who made it, butknown to everyone else.


. ____________ are individuals or organizations that transfer information from one domain toanother in which it can be usefully applied.

Knowledge brokers

Compared to single-discipline based collaboration, what is likely to be the mean and varianceof the output from multidisciplinary collaboration?

Lower mean - Higher variance

Within P&G, __________ are senior people who create external connections with universityand industry researchers and form supplier networks, often combining scientific literature,patent databases and other data sources with physical prospecting for ideas.

Technology Entrepreneurs

Which of the following is a statement for the success of the “Connect and Develop” model?

It requires a full-time, senior executive to run any connect-and-develop initiative.

. ______________ is a positive externality from R&D resulting from the spread of knowledgeacross organizational or regional boundaries.

Technological Spillover

If the aspects that customers have come to expect in a technology are difficult for competitorsto imitate, a technology leader:

Can yield sustained monopoly rents.

In the video game console industry, Magnitude was the first firm to introduce a console in themarket. However, consumers were uncertain about the product, and its high costs discouragedconsumers from purchasing it. Eventually, Magnitude withdrew the product from the market.A few years later, Mantel and Adventura came up with their respective gaming consoles andsuccessfully established their products. Mantel and Adventura will be considered as:

Early followers

1. Jupiter Inc., a software firm, is starting to face competition from the new entrant Coral Inc.Jupiter Inc. wants to prevent its existing customers from switching to Coral’s newly developedsoftware. Which of the following measures should Jupiter Inc. adopt?

Ensure that customers find its software more convenient and simpler to use, ascompared to that of Coral Inc.

2. Fashion Fair, the first mover in the “all year discount” stores market, lost its market share to alate entrant—Brand Fair. Brand Fair operated its discount stores solely over the Internet,which, in turn, saved a lot of expenses. However, Fashion Fair was unable to adopt the onlinestore business model due to its existing contracts with suppliers and investment in a physicalinfrastructure. This is an example of:

Incumbent inertia

Which one of the following is not a source of first-mover advantages?

Environmental uncertainty

Which one of the following is not a source of late-mover advantages?

Faster innovation due to competitive pressure

Which one of the following combination of the paces of technological evolution and marketevolution will most likely lead to first-mover advantages in both short term and long term?

Slow technological evolution and fast market evolution

. Knowledge that cannot be readily codified is called __________ knowledge


A bicycle manufacturing company adopted a new type of inventory management system.This inventory system improved the productivity of its manufacturing unit and the quality ofthe bicycles. This is an example of ______________ innovation.


_______ approach to research and development assumed that innovationproceeded linearly from scientific discovery, to invention, to engineering, then manufacturingactivities, and finally marketing.


Technology trajectory

The path that a technology follows through time

Absorptive capacity

The ability of an organization to recognize, assimilate, and utilize new knowledge.

For a new technology to be successful in a market, it is enough for the new technology’sstand-alone utility to exceed that of the incumbent standard


The learning curve indicates that the more units a company produces of an item, the more eachunit will cost.


Just as the value of a stock is independent of the call holder’s behavior, the value of an R&Dinvestment is also independent of the investor’s behavior.


After licensing in a technology, the firm typically has limited discretion over what it can dowith the technology


FootsTrend Co. and AmazeDeals entered into an alliance. FootsTrend wanted access to onlinesales but did not have the same expertise in this field as AmazeDeals. AmazeDeals wanted tosell FootsTrend exercise mats from its online Web site. This is an example of individualalliance with capability transfer.


According to the net present value (NPV) method of evaluation of projects, if there are cashoutflows for multiple periods, then:

Those cash outflows will have to be discounted back to the current period.

Which one of the following best captures the mode of collaboration in which a company canpost a problem, anyone can propose solutions, and the company chooses the solutions it likesthe best?

Innovation Mall

. When technology is progressing rapidly, firms are more likely to:

c. Use linkages with other specialized firms to access resources they do not possess

In the ______________method, in order to establish scales of customer preferences,individuals in a group are each given a stack of cards with an object or idea on each card.


Which of the following is true of quantitative methods of analyzing new projects, particularlyin rapidly changing environments?

They enable managers to statistically compare projects.

Henry calculated that the net present value of his investment would be zero with a 15 percentinternal rate of return. This means that

Henry can compare the 15 percent internal rate of return to the required rate ofreturn to determine if the investment should be made.

According to Christensen, Kauffman and Shih (2008), which one of the following statementsis not true?

The projected value of an innovation must be assessed against a range of scenarios, theleast likely of which is often deteriorating the competitive and financial future.

Which one of the following statements is not true for the formula for valuing a project usingreal options approach?

If revenue volatility exceeds cost volatility, project volatility should be adjusted up

Which of the following is an advantage of collaborating?

It gives firms more flexibility.

Which of the following is true of contract manufacturing?

It enables a firm to tap the greater economies of scale.

Dynamix Developers Co. wants to develop its technology very fast, with low cost and lowcontrol. It would also like to leverage its existing competencies without developing newcompetencies, and may need to access the competencies of other firms. Which of thefollowing is the best mode of development for Dynamix Developers to meet these criteria?

License out

When each partner contributes capital and owns a specified right to a percentage of theproceeds from the alliance, the collaborative relationship is referred to as _____

Equity ownership

Which one of the following is incorrectly explaining the advantages of the correspondingcollaboration structure?

Flat – requires all parties to arrive at mutually beneficial solutions

Which one of the following types of synchrony (Davis, 2013) best represents the followingapproach: a firm engages first with other companies of a higher coordination priority and thensignals its intention to a select group of other companies to respond.

Hybrid synchrony

Neon Inc. is an electronics manufacturing company. It has adopted a dominant design for itstelevision audio speakers. Which of the following is the firm most likely to experience, as aresult of this decision?

Neon Inc. will face increasing returns to adoption

When can winner-take-all markets be good for consumers?

d. When the value of technology utility and network externality returns exceedsmonopoly costs.

Arica Software Inc. is trying to estimate the “installed base” for its software. It is trying toassess the number of:

Users of its software.

Between two technologies competing for dominance, when customers attain their desiredlevel of network externality benefits at lower market share levels:

The network externality returns curves flatten out sooner.

Which one of the following is not an appropriate strategy or tactic in standards wars?

Survival pricing

Which one of the following is not an environmental factor that influences the outcome of abattle for technological dominance?

Entry timing

In collaboration strategies, self-enforcing norms based on the goodwill, trust, and reputationof the collaboration partners are known as ___________________

relational governance

. The ratio of R&D expenditures to sales is known as ________________

R&D intensity

. If a firm has the option of investing in R&D (a real option), the cost of commercializing anew technology that is developed can be considered the _______ _______

exercise price

Dominant design

A single product or process architecture that dominates a product category, typically 50percent or more of the market.

Network externalities

When the value of a good to a user increases with the number of other users of the sameor similar good. Also called positive consumption externalities.