, 1. Virtual Inc., a manufacturing company, has recently entered the cell phone industry.
This industry is characterized by rapid technological innovations. Which of the following
is most likely to be true for Virtual?
a. The life cycle of its cell phones will be very long.
b. It will face rapid products obsolescence.
c. It will face low market segmentation in the cell phone industry.
d. It will have a lower need for product differentiation.
2. Erison Group, an advertising company, wants to hire someone as its creative head. Who
among the following would be best suited for this position?
a. An Individual who completely adheres to the existing logic and paradigms and
has extensive knowledge of the field
b. An individual who has low tolerance for ambiguity and avoids taking risks
c. An individual who has a moderate degree of knowledge of the field but is
intrinsically motivated
d. An individual who prefers to look at problems in conventional ways
3. The demand-pull approach to research and development refers to research and
development that:
a. Focuses on developing products that are expected to increase demand in a
particular market segment
b. Begins by examining the outcomes of the firm’s basic research and the potential
commercial applications that may be constructed form those outcomes
c. Focuses on developing products that are expected to decrease the demand for
their substitute products
d. Originates as a response to the specific problems or suggestions of customers
4. Which of the following statements is true of the different types of innovations?
a. An innovation is considered a component innovation if it significantly affects the
overall configuration of the system of which it is a component
b. Process innovations are more visible than product innovations
c. Architectural innovation is also called modular innovation
d. An innovation that was once considered radical may eventually be considered
incremental as the knowledge base underlying the innovation becomes more
common
5. The innovation process is often conceived of as a funnel because:
a. Most innovative ideas become successful new products
b. It decreases the amount of output achievable form a given quantity of labor and
capital
c. It increases the importance of production economies of scale
d. There are many potential new product ideas and only a few make it through the
development process
6. Increasing returns to adoption imply that technology trajectories are characterized by
___, meaning that relatively small historical events may have a great impact on the final
outcome.
a. The ratchet effect
b. The funnel effect
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