Process Innovation

Innovation Process Questions

1) When/Where ....... technology (...........) explains existing technology. (CIRCLE ONE ONLY)

a. It always has higher return than the old technology.

b. It is sometime referred to as disadvantage technology.

c. The existing technology has always .....

d. The newer technology has always higher performance than the existing technology.

2) The value of a technological innovation to their users represents with. (CIRCLE ONE ONLY)

a. The size of the installed base

b. The availability of complimentary goods

c.The .......................its ........................

d. All of the above

e. Only a and b

3) The biggest disadvantage that first movers face is customer uncertainty. (Circle Yes or No)

Customer uncertainty is not the biggest disadvantage that the first movers face. It is based on the fact that there are other factors such as free-rider effects. Free-rider effects stipulate that those who are considered as late movers may take advantage and learn about the first movers. The other disadvantage of first-rider effects is resolution of technological or market uncertainty. Resolution of technological or market uncertainty is likely to affect first movers as they are unlikely to influence the potential revenues and firm sizes. Other risk factors include the shifts in technology or customer needs as well as incumbent inertia further suggesting that customer uncertainty may not be the biggest disadvantage of first movers. The first disadvantage may be the backlash of free-rider effects, as late movers may learn more about the first movers and improve their strategy.

4) Causing any retargeting product to be thought of differently is called…; CIRCLE ONE ONLY.



c. Market segmentation

d. Penetration

e. Repositioning

5) An innovation that results in reduced production costs is

a. A component innovation

b. An architectural innovation

c. A competence destroying innovation

d. Process innovation

6) If a company introduce a new product at a very high price

a. Consumers are very sensitive to price

b. The company must closely monitor costs

c. Competitors can be discouraged

d. Developmental costs can be recovered

7) Which of the following is not a potential reason for a product to fail?

a. Underestimated market size

b. Poorly designed product

c. Incorrectly positioned product

d. Higher product development costs than anticipated

e. Ineffective advertising

8) In developing an improved recipe for chocolate cake, the type of innovation is


9) A single dominant design of a product is usually selected because

a. As understanding of the technology increases, it enables improvement

b. The less technology is adopted, the more valuable it becomes

c. Alternative designs can continue to be developed and considered

d. It increases inefficiency in manufacturing and marketing

12) An innovation that involves changing the type of windows of a house is

a. A component innovation

b. An architectural innovation

c. A competence destroying innovation

d. Process innovation

13) An innovation providing customers with faster package shipping is

a. A product innovation

b. An architectural innovation

c. A competence destroying innovation

d. Process innovation

14) Benefit from using a new product

a. Decreases with the increased number of users of the same product

b. Decreases with the increased number of products for the same users

c. Increases with the increased number of users of the same product

d. Increases with the increased number of products for the same users

15) ----the items below increase the success rate of innovation except

a. ------the number of ideas submitted

b. ------innovation projects with company resources and objectives

c. ------core competencies to achieve strategic intent

d. ------for implementing the innovation strategy

16) -------of a new product occurs when a business covers its fixed costs (True/False). Explain your answer.

A fixed cost is defined as the costs associated with a given product which has been paid for. It does not depend on the amount of products that one sells. On the other hand, product innovation refers to the creation and introducing new products or services in the market. A new product cannot therefore be initiated when a business covers its fixed costs. Although, one may argue that new products development occur when companies cover their fixed cost, which is false.

Product innovation occurs when businesses develop new ways to produce and release new features for the existing product; and the process of new product development is not necessarily tied to fixed cost.

17) Small organizations with typically less resources than large organizations usually have more difficulties for innovation (True/False). Explain your answer below. 

Small Size of Organization's Characteristic: (things to consider when you answer)

Small organizations are more innovative due to various characteristics within those businesses. Small organizations are more flexible and entrepreneurial. They are better equipped for innovation that does not require a lot of resources and virtually do not have to undergo layers of bureaucracy to deal with. In addition, small organizations can track employee and reward innovation easier, as well as out-perform large organizations when product changes and strategy have to be made frequently due to their adaptability and agility being the key

18) Energy Independence Inc. developed a new fact ------------------------

a. Poor product quality

b. Insignificant product differentiation

c. Lack of social responsibility

d. Underestimating market size

e. Penetrative market pricing

Penetrative market pricing offers organizations an opportunity to have competitive edge in the market by setting a relatively low entry price during the initial stages. The main aim of this approach is to attract new customers.

This is a modus operandi which introduces a competitive advantage over companies in the same industry through the adjustment of prices of products. In this context Energy Independence Inc. developed this approach to increase the customer base in form of sales, hence make them able to introduce new product in the market that appeals to customers’ taste and preferences.

19) When a CD audio replaced cassette tapes, this was an innovation categorized as

a. A continuing innovation

b. An architectural innovation

c. A competence destroying innovation

d. Process innovation

20) In offering disruptive technology to the market, what are some of the factors that a business could own as a basis of competition?

One of the factors that disruptive technology will have to take into account is the risky product introduction method. The concept may encounter barriers which can eventually hinder its progress. In addition, the ultimate goal of disruptive technology must be evaluated and headed in order to ensure members work towards achieving that goal. The other aspect of disruptive technology entails keeping license in an effective manner so as to be able to present an effective disruptive technology process. It is also important to note that there are some organizational structures that may not be able to support the organizational structure. If this is the case, then disruptive innovation may not be able to succeed. Some of the factors to be considered may include: the goals that the organization in the development of its products to meet the existing market competition, investing in the development of personnel ability in regard to organic organization structure for innovation: this tends to create a basis for cutthroat competition in marketing of parallel products in the same industry. In addition to this fact, there should be prior analysis of the market trend in which kind of product offer better value in return investment, that is to say, the risky product introduction technique, must be chiefly employed to ensure that there is slight probability of making losses once offers to use disruptive tech to a market are employed.

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