Chapter 11 Multiple Choice Questions

. Innovation is defined as:

the commercialization of a new product or process.

the invention of a new product or process.

a new product or process idea.

the implementation of a new production method.

. Process innovation refers to:

the development of a new service.

the development of a new product.

the implementation of a new or improved production method.

the development of new products or services.

. Innovation can help to provide a temporary competitive advantage when:

barriers to entry are high.

barriers to imitation are low and intellectual property rights are difficult to enforce.

there are few other competitors.

barriers to entry are low.

. Following establishment of a dominant design in the product life cycle, what would you expect to happen?

Emphasis on product innovation rather than process innovation.

Emphasis on process innovation rather than product innovation.

Competition to increase as new firms enter the industry.

Competition to decrease as more firms exit than enter the industry.

. Established firms relative to new firms are better at:

all types of innovation.

innovation which is competence-enhancing.

innovation which is competence-destroying.

Innovation which is disruptive.

. In which markets are network effects likely?

Markets subject to increasing returns

'Tippy' markets

Hi-tech product markets

All of the above

. Which of the following are valuable in a standards war?

Competitive advantage

Late mover advantage

Early mover advantage

Technological advantage

. The fundamental challenge of knowledge transfer in multinational firms is:

transferring explicit knowledge across borders.

transferring tacit knowledge across borders.

creating tacit knowledge in overseas subsidiaries.

transferring tacit and explicit knowledge across borders.

. What potential advantages can be gained from involving overseas subsidiaries in R&D activities?

Local subsidiaries offer financial advantages such as lower land and labour costs.

Local subsidiaries offer access to local companies.

Local subsidiaries offer access to technical knowledge and skills.

Local subsidiaries offer financial advantages as well as access to local markets, technical knowledge and skills.

. Outsourcing of innovation globally is more likely where:

Innovations are autonomous

Innovations are systemic

Innovations are systemic or autonomous

Innovations are made by service sector firms

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