Question 1

Over time,industry life cycles have become increasingly compressed.

Accepted Answer

This statement is true. With the accelerating pace of technological developments and globalization, industry life cycles have become shorter, leading to quicker changes, innovations, and disruptions in various sectors. Companies must adapt and evolve rapidly to survive and succeed.

Question 2

The firm which sets the dominant product design usually goes on to be the most profitable firm in the industry.

Accepted Answer

While the firm that sets the dominant product design may gain early advantages, long-term profitability depends on various factors such as innovation, cost management, market competition, and the ability to adapt to changing consumer preferences. Other firms can surpass the original innovator in profitability through better execution, marketing, or further innovation.

Question 3

Long-term change within most industries is achieved through the birth and death of companies rather than through adaptation by existing companies.

Accepted Answer

This statement aligns with the theory of creative destruction, where new companies and innovations constantly disrupt existing industries and eventually replace older companies. Therefore, long-term change in most industries often occurs through the birth and death of companies rather than just the adaptation of existing ones.

Question 4

Organizations tend to prefer exploration for new opportunities over exploitation of existing knowledge.

Accepted Answer

Organizations generally prioritize innovation and discovery of new opportunities to ensure their long-term growth and sustainability. Exploiting existing knowledge may lead to incremental improvements but may not be sufficient to keep up with the rapidly changing business landscape. Therefore, exploring new opportunities is considered essential for the success of organizations.

Question 5

Technical standards are usually associated with network effects,dominant designs are usually not.

Accepted Answer

Technical standards are typically chosen to achieve network effects, meaning the more people adopt them, the more valuable they become. Dominant designs, on the other hand, emerge through a competitive process and do not necessarily benefit from network effects.

Question 6

Ford's assembly-line,mass production system and Toyota's system of lean production were the two process innovations that transformed the manufacture of automobiles during the 20^th century.

Accepted Answer

This statement is true. Ford's assembly-line, mass production system and Toyota's system of lean production were two major process innovations that revolutionized automobile manufacturing in the 20th century.

Question 7

During the introduction phase of the industry life cycle,different technologies and design configurations compete for market acceptance.

Accepted Answer

During the introduction phase, there is a high degree of uncertainty, and various technologies and design configurations compete for market acceptance.

Question 8

The industry life cycle follows different phases from the product life cycle.

Accepted Answer

The answer of The industry life cycle follows different phases...

Question 9

For aircraft manufacturers,the jet engine was a threat since it was a "competence destroying" innovation.

Accepted Answer

The answer of For aircraft manufacturers,the jet engine was a...

Question 10

The establishment of a dominant design in an industry requires convergence around a common technical standard.

Accepted Answer

The answer of The establishment of a dominant design in...

Question 11

"Punctuated equilibrium" refers to the tendency for organizations to follow a gradual process of transition from one equilibrium to another

Accepted Answer

"Punctuated equilibrium" actually refers to a theory in evolutionary biology regarding the sudden bursts of change that occur in a species' development, rather than a gradual process of transition.

Question 12

According to Charles Darwin it is the strongest of a species that survives.

Accepted Answer

Charles Darwin actually suggested that it is not the strongest of the species that survives, nor the most intelligent, but the one most adaptable to change.

Question 13

The establishment of a dominant design is usually associated with an industry's transition from the maturity phase to the decline phase.

Accepted Answer

The establishment of a dominant design is usually associated with an industry's transition from the introduction phase to the growth phase, as it signals a clear path forward for producers and consumers alike. It is rare for a dominant design to emerge during the maturity or decline phases of an industry.

Question 14

Start-up companies tend to be better at exploiting architectural innovations than established companies.

Accepted Answer

Start-up companies are often more agile and have fewer bureaucratic obstacles that can hinder the implementation of new architectural innovations. They also have a greater willingness to take risks and explore new opportunities. On the other hand, established companies may be more resistant to change and have invested heavily in existing infrastructure, making it more difficult to adopt new architectural innovations.

Question 15

The main drivers of industry evolution are growth of demand and the production and diffusion of knowledge.

Accepted Answer

The growth of demand and the production and diffusion of knowledge are two main factors that drive the evolution of industries over time. As demand for goods and services increases, companies must adapt to meet the needs of consumers, which can lead to changes in production processes, product design, and business models. Similarly, advances in technology and knowledge can drive innovation and create new opportunities for businesses to grow and evolve.

Question 16

With the onset of maturity,industries often experience a "shake-out" period.

Accepted Answer

The shake-out period is a common phenomenon in mature industries where there is intense competition and consolidation. This period often involves the exit of weak competitors and the emergence of dominant players.

Question 17

With the onset of maturity,industries often migrate from advanced industrial countries to emerging countries.

Accepted Answer

This phenomenon is known as the "flying geese pattern" in which industries move from countries with high labor costs and mature economies to countries with lower labor costs and emerging economies. This allows for lower production costs and increased profitability for companies.

Question 18

The emergence of a dominant product design tends to coincide with a shift from process innovation to product innovation

Accepted Answer

The emergence of a dominant product design typically leads to a shift from product innovation to process innovation, as companies focus on improving manufacturing efficiency and reducing costs for the now-standardized product.

Question 19

The field of organizational ecology (a.k.a.organizational demography)proposes that a key factor encouraging the entry of new firms during an industry's early phases of development is the increasing legitimacy of the industry.

Accepted Answer

Organizational ecology theory argues that increasing legitimacy of an industry, as well as decreasing resource availability and niche opportunities, create a favorable environment for new firm entry during the early phases of an industry's development.

Question 20

Firms that develop high levels of capability tend to find change easy because they are also able to develop new capabilities.

Accepted Answer

While firms with high levels of capability are often better positioned to adapt, change inherently involves challenges and uncertainties, making it not necessarily "easy" even for highly capable firms. Capability development does not automatically translate to ease in adapting to new changes.

Quiz 8: Industry Evolution and Strategic Change