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

Question 1

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 is likely to quickly become the dominant method used by diabetics and will replace the old blood sugar monitoring devices Jackson currently sells.Hence,Jackson should enter the market quickly.

Answer 1

True

Question 2

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

Answer 2

False

Question 3

The credibility of a firm and the rate of adoption are directly related.

Answer 3

True

Question 4

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

Question 5

All pioneers face customer uncertainty.

Question 6

If you are a first mover in the market of a new technology,you may find that your product offerings will have to be modified as consumers let their preferences be known.

Question 7

If a firm intends to refine an earlier entrant's technology and beat the earlier entrant to market with a new version of this technology,it must have enabling technologies.

Question 8

A firm with fast-cycle development processes has more timing of entry options.

Question 9

Irrespective of whether the characteristics of a technology are imitable or not,a first mover has an opportunity to build brand loyalty before the entry of other competitors.

Question 10

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.

Question 11

If you are certain of customer preferences and needs,you can enter the market earlier than if customer needs were unknown.

Question 12

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

Question 13

Although other companies in the gliding shoe market have come out with hydrogen based power units,the first company in this market,GlideShoe is sticking with the fossil fuel power units.This is likely an example of incumbent inertia.

Question 14

Late entrants usually enter the market only once the product has been adopted by the
mass market.

Question 15

Even though the technology for high definition DVD players is clearly superior to the old generation,it requires that users buy high definition television sets.This factor might reduce the adoption of new DVD players.

Question 16

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

Question 17

For a very new product technology,market research may be of significant help.

Question 18

A firm that has very fast-cycle development processes may be able to capitalize on both first and second-mover advantages.

Question 19

Early leaders are firms that are the first to enter the market.

Question 20

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

Question 21

Which of the following is not true regarding first movers?

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 22

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

A) has the opportunity to earn licensing royalties.
B) can yield sustained monopoly rents.
C) has lower bargaining power.
D) is more susceptible to incumbent inertia.

Question 23

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

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

Question 24

Which of the following is an advantage of being a later entrant into a market?

A) Firms can capture scarce resources.
B) Firms do not have to invest in exploratory research.
C) Firms have to develop their own supply and distribution channels.
D) Firms are unaffected by switching costs.

Question 25

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

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

Question 26

If you enter the market too early,the risk is that

A) the technology (or complements) will be underdeveloped.
B) legal aspects related to the product do not exist.
C) you will have large cash flow initially but it will deplete faster.
D) consumers will lock you out of the market.

Question 27

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.

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

Question 28

Which of the following statements is true regarding first movers?

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 29

In the video game console industry,Magnavox was the first mover but was not the winner.Atari and Nintendo came up with their respective gaming consoles soon afterwards.They were

A) also first movers.
B) early movers
C) laggards.
D) late movers.

Question 30

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:

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

Question 31

Which of the following statements is true regarding customer preferences?

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 32

A technology that makes a dramatic improvement over previous generations or different technologies that serve similar functions will

A) not be easily accepted by customers.
B) more rapidly gain customer acceptance.
C) not be accepted by customers at all.
D) experience lesser customer acceptance.

Question 33

When McDonalds first moved into Russia,it had to teach farmers how to grow better potatoes and cattle,and bakers how to make hamburger buns.This is an example of

A) corporate social responsibility.
B) an undeveloped supply channel.
C) development partnerships.
D) late-mover manipulation.

Question 34

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

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

Question 35

TechSense was the first company to introduce a GPS-enabled shoe into the market and shoe sales are rapidly increasing.Which of the following is most likely to be true for TechSense?

A) TechSense has incurred significant research and development expenses.
B) Consumers will be able to change to a competitor's product relatively easily.
C) TechSense's product is a perfect match with customer requirements.
D) Complementary goods producers are aplenty.

Question 36

In the personal computer operating system market Microsoft,who was a(n)_____ became the winner in the market place.

A) first mover
B) late mover
C) follower
D) laggard

Question 37

Which of the following scenarios describes the benefits of being a first-mover in the market?

A) A firm that has developed a watch that requires a microchip which is still in its nascent stage.
B) An automobile manufacturer that must undertake the task of developing radiator caps for the engines of its cars.
C) A maker of breakfast cereals whose customers are unaffected by switching costs.
D) A radio station that is given authority over large portion of radio spectrum.

Question 38

In which of the following scenarios would an earlier entry into the market be beneficial?

A) A firm that has developed a new line of video games for which the required graphics card is yet to become mainstream.
B) A cell phone manufacturer who has developed a touch phone without conducting any market research.
C) A firm that has developed a new line of vacuum cleaners that can be preprogrammed to function automatically without any user involvement.
D) A firm that has patented its technological innovation.

Question 39

A delayed entry into the market is preferred when

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 40

Intel pioneered microprocessor development in the 1970s and introduced its microprocessor well ahead of competitors.According to the classification scheme provided in the text,Intel would be classified as a(n)_____.

A) first mover
B) early mover
C) late entrant
D) premature developer

Question 41

Explain why sometimes the follower and not the first mover of a new technology is more successful in the market place.

Question 42

When S.C.Johnson Company came up with a new hair care product that repaired split ends,it spent money on market education and provided incentives to wholesalers and retailers to sell the product.This strategy will _____ the early adoption of this innovative product.

A) hinder
B) have no effect on
C) accelerate
D) delay

Question 43

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 this new product.He finally raised enough money to enter the market and began to experience some success.The product was not patentable because it was too similar to other existing technologies.Major corporations saw his success and have now entered the market with competing products.What will be the probable destiny of Lee Peterson's company?

Question 44

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) 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 45

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.

Question 46

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

Question 47

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 quickly become the dominant method used by diabetics and will replace the old blood sugar monitoring devices Jackson currently sells.However,competitors might be able to easily imitate the device.Jackson should enter the market

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

Question 48

Apex is the leader in the shoe glider market while Summit is a new startup company.Both have just released new generation shoe gliders.Which entry is likely to be adopted more quickly?

A) Apex
B) Summit
C) Both will be adopted at the same rate
D) Neither

Question 49

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?

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 50

Acme Products was late to enter the desk height adjuster market.However,Acme has vast financial resources compared to the 2 other small companies in this new market.Which of the following best represents Acme's chances of success?

A) Slim because it is a late entrant into the market.
B) Excellent because it can outspend the other companies in further development and marketing of the product.
C) Acme's chances of success cannot be determined.
D) Acme's chances of success are exactly equal to those of the other companies.

Question 51

A firm with fast cycle development processes

A) can introduce a refined version of a competitor's technology.
B) is susceptible to more quality problems.
C) can exit the market sooner.
D) has only a first mover advantage.

Question 52

Explain the reasons why more efficient keyboards were not able to replace the QWERTY keyboard.Which principle is illustrated in this scenario?