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Answer: FALSE
Answer: TRUE
3) Between 33% and 60% of all new products that reach the market fail to make a
profit.
Answer: TRUE
4) Research reveals that firms that focus inward on their core competencies as a
way to generate
Answer: FALSE
5) Focusing one's scanning efforts too closely on one's current product line are
dangerous.
Answer: TRUE
Answer: TRUE
7) Lead users are companies, organizations, or individuals that are well ahead of
market trends
and have needs that go far beyond those of the average user.
Answer: TRUE
8) The first phase of the lead user process is identifying lead users.
Answer: FALSE
9) Market research is used to survey current users as to what they would like in a
new product.
Answer: TRUE
10) Market research is a good source to provide the information needed for radical
innovation.
Answer: FALSE
11) Leading firms often fail to switch to the new technology available because
management is
ignorant of the new development.
Answer: FALSE
12) Some successful companies are developing their products by probing potential
markets with
early versions of the products, learning from the probes, and probing again.
Answer: TRUE
13) Microsoft follows an embrace and extend strategy of imitating new products
developed by
Answer: TRUE
Answer: TRUE
12 to 15 years.
Answer: FALSE
Answer: TRUE
strategy.
Answer: FALSE
operating in the United States and many more were operating throughout Europe
and Asia.
Answer: TRUE
Answer: FALSE
20) Absorptive capacity is a firm's ability to value, assimilate, and utilize new
external
knowledge.
Answer: TRUE
21) The product/market evolution matrix depicts the types of developing products
that cannot be
22) With the product/market evolution matrix, the circles represent the sizes of the
industries
involved, and the pie wedges represent the market shares of the firm's business
product lines.
Answer: TRUE
Answer: FALSE
24) The final stage of new product development is new business development.
Answer: TRUE
Answer: TRUE
26) A sponsor is usually a department manager who recognizes the value of the
idea, helps
Answer: TRUE
27) A product champion is a person who generates a new idea and supports it
through many
organizational obstacles.
Answer: TRUE
Answer: TRUE
Answer: TRUE
30) The managers of Corning report that the stage-gate process increases
development time and
products.
Answer: FALSE
31) One of the thirteen best practices for improving R&D is that corporate and
business unit
Answer: FALSE
32) According to research conducted by Forbes and others, the most important
driver of
A) mass customization.
B) innovation.
C) synergy.
D) logistics.
E) flexible manufacturing.
Answer: B
33) Approximately how much of the profits of all U.S. companies come from
products launched
A) 50%
B) 100%
C) 80%
D) 20%
E) less than 1%
Answer: A
34) A study of 111 successful and 86 unsuccessful product innovations found that
the successful
C) They saved money, met customer needs, and supported existing practices.
Answer: D
35) A study by Kuczmarski & Associates revealed that ________ of all newly
introduced
A) 21%
B) 35%
C) 56%
D) 80%
E) 95%
Answer: C
36) Information that assesses where breakthroughs are likely to occur can be
depicted on a
A) technology chart.
C) technology roadmap.
D) technology highway.
E) technology monograph.
Answer: C
37) Most new developments that threaten existing business practices and
technologies come
from
Answer: B
38) The corporation ________ was able to establish itself as the industry standard
for browsers.
A) Netscape
B) Sun Systems
C) Apple Computers
D) Cisco Systems
E) Corel Works
Answer: A
39) Software firms know that in order to remain on the leading edge of technology,
they must
B) Austin, Texas.
C) Fayetteville, Arkansas.
40) Research by Von Hippel indicates that 77 percent of the innovations in the
scientific
Answer: C
41) Besides the users of the products, helpful advances toward innovations are
derived from
A) suppliers.
B) employees.
C) shareholders.
D) government regulators.
E) lobbyists.
Answer: A
A) lead technology.
B) co-development.
C) technology customization.
D) developmental manufacturing.
E) technological continuity.
Answer: B
43) Companies, organizations, or individuals that are well ahead of market trends
and have needs
B) traditionalists.
C) lead users.
D) strategic pursuers.
E) technological maneuvers.
Answer: C
E) hosting seminars.
Answer: C
45) Lead user teams are typically composed of employees from the
A) accounting department.
B) marketing department.
C) technical department.
D) finance department.
Answer: E
46) Based on the lead user team process, what company was able to successfully
implement this
A) 3M
B) Corning
C) Microsoft
D) America Online
E) General Electric
Answer: A
47) For a lead user team, what is the minimum duration of each phase in the
process?
A) one day
B) one week
C) three weeks
D) four weeks
E) eight weeks
Answer: D
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48) The effort to talk with users at the leading edge of the target and related market
to understand
E) hosting seminars
Answer: B
D) of government regulations.
E) they did studies which revealed that the new technology was inferior to the
current
technology.
Answer: C
50) What company has been able to successfully use market research in its survey
of current
A) 3M
C) BMW
D) General Motors
E) Chrysler
Answer: B
51) According to the textbook, the watch maker that introduces hundreds of new
models of
watches into the marketplace then makes more of the models that sell, dropping
those that don't
sell is
A) Timex.
B) Wittnauer.
C) Swatch.
D) Seiko.
E) Pulsar.
Answer: D
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B) no change strategy.
D) hold strategy.
E) refinement strategy.
Answer: A
53) What company was cited in the textbook as using the embrace and extend
strategy as a way
A) Seiko
B) Microsoft
C) Maytag
D) Trilogy
E) 3M
Answer: B
54) The consulting firm Arthur D. Little found that the use of standard market
research
A) over 92%.
B) only 8%.
C) around 75%.
D) 50%.
E) around 25%.
Answer: B
testing.
Answer: C
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56) What percentage of sales is spent on R&D for the computer software and drug
industries?
B) between 2% and 5%
Answer: A
Answer: D
58) According to one study cited in the textbook, what is the innovation rate of
small businesses?
Answer: D
A) incremental innovation.
B) novel innovation.
C) incentive innovation.
D) strategic innovation.
E) radical innovation.
Answer: A
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60) What is the term that refers to the development of completely new products?
A) incremental innovation
B) radical innovation
C) innovative technology
D) manufacturing technology
E) flexible manufacturing
Answer: B
61) Research by Hitt, Hoskisson, and Harrison indicates that the maximum
innovator in an
industry tends to be
Answer: C
62) Confirming that R&D spending can be wasted, between 1950 and 1979, which
country's
steel industry spent 20% more money on plant maintenance and upgrading for each
ton of
production capacity added or replaced than did the Japanese steel industry?
A) United States
B) Sweden
C) Germany
D) France
E) Korea
Answer: A
63) What technology(ies) was the catalyst for the United States to lose its market
share of the
world steel market when they were not recognized and adopted?
A) flexible manufacturing
B) reengineering
Answer: E
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64) What term refers to the time from inception to profitability of a specific R&D
program?
A) duration of innovation
B) time to market
C) time to shelf
E) span of R&D
Answer: B
C) 60% of successful patented innovations are imitated within four years at 65% of
the cost of
the innovation.
D) R&D budgets are becoming a higher proportion of total revenues in most large
corporations.
Answer: C
66) In the early stages of a product's life cycle, ________ are most important.
A) process innovations
B) product innovations
E) faster distribution
Answer: B
distribution, are
A) logistical innovations.
B) product innovations.
Answer: D
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A) logistical innovations.
B) product innovations.
D) process innovations.
Answer: B
A) logistical innovation
B) product innovation
D) process innovation
A) logistical innovation
B) product innovation
D) process innovation
Answer: D
71) What percent of their R & D budgets do U.S. firms spend on product R&D?
A) 30%
B) 50%
C) 60%
D) 70%
E) 90%
Answer: D
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Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall
72) What percent of their R&D budgets do U.S. firms spend on process R&D?
A) 30%
B) 50%
C) 60%
D) 70%
E) 90%
Answer: A
73) What percent of their R&D budgets do German firms spend on product R&D?
A) 30%
B) 50%
C) 60%
D) 70%
E) 90%
Answer: B
74) What percent of their R&D budgets do Japanese firms spend on process R&D?
A) 30%
B) 50%
C) 60%
D) 70%
E) 80%
Answer: D
A) technology sourcing
B) technology continuity
C) technology discontinuity
D) process innovation
E) product innovation
Answer: A
76) The traditionally heavy emphasis by U.S. major home appliance manufacturers
on ________
is one reason they have such a strong position in the North American market.
A) technology sourcing
B) technology continuity
C) technology discontinuity
D) process innovation
E) product innovation
Answer: D
77) The innovations which dominate the major home appliance industry are
A) financial innovations.
B) product innovations.
C) technological innovations.
D) process innovations.
Answer: D
78) Following the resource-based view of the firm, a company should ________
technologies
that are commonly available but ________ those that are rare, valuable, and hard to
imitate and
B) buy; make
C) make; license
Answer: B
D) a low-tech environment
Answer: B
80) What term describes the situation where a corporation finances the costs of
developing a new
B) vertical integration
C) R&D outsourcing
E) corporate entrepreneurship
Answer: D
Answer: D
D) the technology development process requires new people and new resources.
Answer: E
D) the technology development process requires new people and new resources.
Answer: E
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84) Which term is used to describe a firm's ability to recognize, to assimilate and to
utilize new
external knowledge?
A) anticipated benefit
C) planned potential
D) absorptive capacity
E) competitive advantage
Answer: D
A) technological competence.
B) absorptive capacity.
C) technological continuity.
D) technology transfer.
Answer: A
B) allocating resources
Answer: B
B) represents the amount of assets deployed by the company to the product or SBU.
Answer: E
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88) A matrix that depicts the types of developing products according to their
competitive
A) BCG Matrix.
B) GE Business Screen.
Answer: C
C) the product life cycle does not always hold for every product
Answer: C
A) idea generation
B) concept evaluation
C) preliminary design
Answer: A
A) idea generation
B) preliminary design
Answer: E
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92) What stage of new product development is occurring when a venture team is
formed to
A) idea generation
B) preliminary design
Answer: B
A) complexity.
B) interconnectedness.
C) formal structure.
D) large size.
E) decentralized decision-making.
Answer: C
94) According to the textbook, companies with entrepreneurial cultures have two
characteristics
in common:
B) employees are dedicated to a particular project outcome and are responsible for
all functional
wish.
E) total management control of all new project budgets coupled with the dart board
approach to
Answer: B
95) A department manager who recognizes the value of an idea, helps obtain
funding to develop
A) orchestrator.
B) conductor.
C) sponsor.
D) product champion.
E) angel.
Answer: C
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96) What is the term for a person who generates a new idea and supports it through
many
organizational obstacles?
A) orchestrator
B) conductor
C) sponsor
D) product champion
E) innovative champion
Answer: D
Answer: B
98) What term describes the birth of new businesses within an existing
organization?
A) spin-off project
B) corporate entrepreneurship
C) enterprise creation
D) venture origination
E) industry growth
Answer: B
A) entrepreneurship.
B) mentoring.
C) corporate entrepreneurship.
D) joint ventures.
E) strategic alliances.
Answer: C
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100) According to Burgelman, what are the two interacting factors which result in
the nine
C) the strategic importance of the new business to the organization and the
relatedness of the
unit's operations to those of the corporation
Answer: C
101) Which organizational design for corporate entrepreneurship occurs when the
new business
has a great deal of strategic importance and operational relatedness and must be a
part of the
corporation's mainstream?
A) direct integration
Answer: A
102) Which organizational design for corporate entrepreneurship occurs when the
new business
has uncertain strategic importance and is only partly related to present corporate
operations?
A) direct integration
Answer: E
103) Which organizational design for corporate entrepreneurship occurs if the new
business has
E) complete spin-off
Answer: B
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104) Which organizational design is appropriate when the strategic importance and
operational
A) complete spin-off
Answer: A
operations and top management might help the entrepreneurial unit to spin-off
from the
corporation?
Answer: A
capabilities and skills of the new business are less related to those of the
corporation, but the
E) contracting
Answer: E
107) Developed at Mitsubishi's Kobe shipyards, the tool to help project teams
make important
design decisions by getting them to think about what users want and how to get it
to them most
effectively is
A) stage-gate process.
B) house of quality.
D) outsourcing.
E) reengineering.
Answer: B
B) dividing the percentage of total revenue spent on R&D into new product
profitability.
D) averaging the amount of time it takes for all new products to move from the lab
to the
marketplace.
Answer: B
A) Corporate and business unit strategies are well defined and clearly
communicated.
Answer: C
110) What are lead users? Discuss the four phases of the lead user process.
Answer: Lead users are "companies, organizations, or individuals that are well
ahead of market
trends and have needs that go far beyond those of the average user". They are the
first to adopt
a product because they benefit significantly from its use even if it is not fully
developed.
The four phases of the lead user process are: laying the foundation (identifying
target markets
and the type and level of innovations desired), determining the trends (researching
the field and
talking with experts with a broad view of emerging technologies), identifying lead
users (talking
with them to understand their needs), and developing the breakthrough (hosting a
workshop with
26
Answer: In the early stages of the product life cycle, product innovations are most
important
because the product's physical attributes and capabilities most affect financial
performance.
The supplier's technology is better and/or cheaper and reasonably easy to integrate
into the
current system
The technology development process requires new people and new resources.
product lines to new customers and markets without requiring major change in
current
capabilities.
and loyalty to the brand or product line by adding new organizational capabilities
without
transcend current product lines or brands to make fundamental changes in both its
strategic scope
27
Decentralized decision-making
Complexity
Informal structure
Interconnectedness
Organizational slack
Large size
System openness
Direct integration: A new business with a great deal of strategic importance and
operational
New product business department: A new business with a great deal of strategic
importance and
entrepreneurial project in the division where skills and capabilities can be shared.
Special business units: A new business with a great deal of strategic importance
and low
operational relatedness should be a special new business unit with specific
objectives and time
horizons.
New venture division: A new business with uncertain strategic importance that is
only partly
might help the entrepreneurial unit to spin off from the corporation.
Contracting: As the required capabilities and skills of the new business are less
related to those
of the corporation, the parent corporation may spin off the strategically
unimportant unit, yet
keep some relationship through a contractual arrangement with the new firm.
Complete spin-off: If both the strategic importance and the operational relatedness
of the new
business are negligible, the corporation is likely to completely sell off the business
to another
117) What are the 13 best practices of successful R&D operations that can be used
as a
Answer: The 13 best practices of successful R&D operations that can be used as a
benchmark
Corporate and business unit strategies are well defined and clearly communicated.
world.
Funding for basic research comes from corporate sources to ensure a long term
focus; funding
Basic and applied research are performed either at a central facility or at a small
number of labs.
Formal cross-functional teams are created for basic, applied, and developmental
projects.
Formal mechanisms exist for regular interaction among scientists, and between
R&D and other
functions.
The transfer of technology to business units is the most important measure of R&D
performance.
Recruiting of new people is from diverse universities and from other companies
when specific
Some basic research is performed internally, but there are also many university and
third-party
relationships.