NETW583 MidTerm (all correct answers) Week 4 2018 May

Question 1

(TCO A) The Solow Residual refers to

the increased amount of output achievable from a given quantity of labor and capital due to technological innovation.

the less developed nations of the world being left behind due to their slower development of technology.

obsolete products left on the market due to the accelerated product life cycle.

the reduction in the amount of inventory needed by manufacturing firms due to technological improvements in inventory management.

the extra leisure time consumers now enjoy as a result of technological innovation.

Question 2

(TCO A) Out of all the innovative ideas that come forth, how many become successful products?

Very few

Most

About half

Seventy-five percent

Question 3

(TCO B) When both Nintendo and Sega claimed to have over 60 percent market share of the video game console market, both were trying to influence _____________.

users perceptions and expectations about the installed base.

perceived technical utility.

pre-order demand.

technology bias.

Question 4

(TCO B) One advantage cell phone customers in the European Union (EU) had over U.S. customers early in the adoption of cells phones is that_______________.

they had a greater variety of cell phone technology to choose from

they had a single standard cell phone format that would work in different countries such as Germany, France, and the U.K.

they always had cheaper rates than in the U.S.

phones were always free if you paid for service contracts.

Question 5

4 / 4 pts

(TCO C) Honda’s core competencies lie in manufacturing and innovation which it has used to create its world renowned engines. These engines are also used in Honda’s portable generators, lawn mowers, motorcycles, automobiles, and several other products. According to the comparison made by Prahalad and Hamel, Honda’s portable generators are ________.

the fruits.

the trunk of the tree.

the branches.

the roots.

Question 6

(TCO D) If a firm has the option of investing in R&D, the cost of implementing the technology is the _______.

exercise price

nature of the option

benefit of exercising the option

the value of the option

Question 7

(TCO A) Explain the reasons why more efficient keyboards were not able to replace the QWERTY keyboard and what principle this illustrates for other products.

Question 8

(TCO A) If you were in charge of a Research and Development (R&D) department for a large pharmaceutical company, would you encourage your researchers to do basic research or applied research? Provide the rationale for your answer.

Question 9

(TCO B) Why is the installed base of users of a technology that requires complementary goods so important to a company’s future success?

Question 10

(TCO B) What factors might make some industries harder to pioneer with technological advancements than others? Name an industry that experienced a disruptive technology where there was no penalty for late entry?

.

Question 11

(TCO C) Legal mechanisms for protecting innovation are more effective in some industries than others. In some industries, inventing around a patent or copyright is relatively easy. Provide an example. Similarly, in some industries it is nearly impossible to protect innovation by using trade secrets because commercializing innovation reveals its underlying technologies. Provide an example.

Question 12

(TCO D) Johnston Products has gathered data to evaluate the attractiveness of a potential project. It knows the cash flows expected under different scenarios. It has conducted a focus group that ranks various product attributes, and it has the ranking of various marketing techniques provided by a consulting company. What method should Johnston use to evaluate this project? Why is this method the best one to use?