Which of the following is a defining characteristic of prospector firms?
A) Such firms adopt strategies that focus on deepening their capabilities through technologies that extend rather than replace their current ones.
B) They tend to adopt an early-follower strategy to grab a dominant position more from their strengths in marketing and manufacturing than from technological innovation.
C) Executives in such firms tend to be more concerned about the opportunity costs of not taking action than they are about the potential to fail.
D) Such firms are risk averse and tend to operate in environments that are stable and predictable.
E) They are less innovative than defender firms because they tend to let others demonstrate solid demand in new arenas before responding.

Question

Quizplus · Accepted Answer

Prospector firms are known for their willingness to take risks and pursue opportunities in new markets or technologies. This often involves making significant investments in research and development, as well as being open to experimentation and failure. Executives in such firms are more concerned about missing out on potential opportunities than they are about the possibility of failure. Choice A is incorrect because prospectors tend to adopt strategies that involve developing new technologies, not just extending existing ones. Choice B is incorrect because early-follower strategies are more commonly associated with defender firms, not prospectors. Choice D is incorrect because prospectors are generally not risk averse and often operate in dynamic or uncertain environments. Choice E is incorrect because prospectors are typically more innovative than defender firms, as they are more likely to invest in new technologies or markets before they are proven to be profitable.

Which of the Following Is a Defining Characteristic of Prospector