innovation flashcards overall

according to Afuah, which statement best defines innovation?

the combination of invention and commercialization

which statement is CORRECT?

innovation requires commercialization

a radical innovation is best described as:

a fundamentally new technological approach

what is a key limitation of S-curve analysis?

it depends on chosen variables and may mislead decisions

why do firms delay switching to new technologies?

firms overestimate current technology potential

which statement about dominant designs is NOT correct?

it emerges during the fluid phase

what characterizes the fluid phase?

high uncertainty and many competing designs

the failure of the Comet illustrates that:

second movers can benefit from first mover failures

which is a disadvantage of first movers?

high technological and market uncertainty

what distinguishes early adopters?

they are opinion leaders reducing uncertainty

what primarily drives diffusion?

social interactions and individual decisions

which statement is CORRECT?

Schumpeter I emphasizes entrepreneurs as key innovators

what is the cannibalization effect?

innovation reduces profits from existing products

why do entrants often innovate more than incumbents?

they avoid cannibalization of existing products

which condition is REQUIRED for disruptive innovation?

initial inferior performance in niche or low-end markets

why is Uber not considered disruptive?

it targeted mainstream customers with strong performance

a strong appropriability regime implies:

difficult imitation and better profit capture

which are complementary assets?

manufacturing and distribution capabilities

why did EMI fail to profit from its CAT scanner innovation?

lack of complementary assets

which statement about patents is CORRECT?

they must be enforced by the patent holder

what is the purpose of an innovation strategy?

guide resource allocation for innovation

what is a key trade-off in NPD?

speed vs quality

what characterizes open innovation?

use of both internal and external knowledge

which statement is TRUE?

firms must both innovate and capture value

what is meant by “creative destruction”?

The fact that innovation creates winners and losers, and may destroy existing firms altogether

We consider the problem between an employer and a research employee who has not finished a research project in time. The decision to be made is whether or not the researcher gets a contract extension. What kind of problem is apparent in this example?

A principal-agent problem (in which the probability of success is determined by the research time allotted and the effort of the agent)

Which of the following is not a type of innovation discussed in the first module?

Market innovation

What was the business failure of Iridium mainly caused by?

Lack of customers due to high costs

Which of the following is NOT a consequence of a new techno-economic paradigm?

New political orientation of the governmen

The "sailing ship phenomenon" refers to...

...the performance increase of a technology toward the end of its life cycle when it faces competition from a new, substitutive technology – as sailing ships did.

The S-curve concept implies that the rate of technology performance improvements…

first increases with aggregate R&D spending, then peaks, and finally decreases.

Which of the following innovations constitutes a revolutionary innovation but NOT as a general-purpose technology?

Spinning Jenny

The differential equation dN/dt = (p + q N) (N_total – N) describes a model of diffusion of a new product. Which of the terms in this equation models diffusion through learning from others (word of mouth)?

q N

According to Rogers (2003), which of the following best describes the difference between innovators and early adopters?

Innovators actively search for information and help with the diffusion of an innovation activity shortly after market launch. Early adopters, often being opinion leaders, further decrease the uncertainty about a new idea by adopting it.

Which statement about Arrow’s model (1962) is wrong?

Compared to a monopolist and a firm in perfect competition, the Social Planner benefits least from a radical innovation because of the inefficiencies of a planning economy.

Which statement about Christensen’s concept of “Disruptive Innovation” is wrong? Disruptive innovations…

… are difficult for established firms because engineers familiar with the new technology prefer to work for start-ups.

Which of the following is NOT part of Porter’s Five Forces model?

Innovation rate of the industry.

Why might a “technology-push” innovation strategy fail?

It may create products without clear market demand.

Which condition most weakens a first-mover advantage?

Rapid technological change.

According to the lecture, which of the following is NOT a pillar of a firm’s innovation strategy?

All of the above are pillars of a firm’s innovation strategy

Patent applications at the EPO have been possible since the 1970s. Which of the following statements about such patent applications are correct? An EPO patent application leads to patent coverage …

… in those European countries that the applicant designates.

Which type of complementary asset would be most risky to source from external suppliers?

Co-specialized assets

The maximum lifetime of a patent is normally…

20 years from the day of application

What is a key risk when licensing innovations to incumbents (markets for ideas)?

Disclosure may allow incumbents to imitate without paying (paradox of disclosure)

Why is IP protection often stronger in pharmaceuticals than in software?

Pharmaceutical products can be precisely defined in patent claims

Which statement about copyright is NOT correct?

All of the other answers are correct.

What is NOT a common problem with a "Market Pull" strategy?

Focus on solutions proposed by the R&D department

Which statement is NOT correct?

Firms with low risk acceptance are more likely to benefit from first-mover advantages.