Session 6 - innovation and entrepreneurship Flashcards
formulation stage (23 cards)
____ describes the process by which change agents undertake economic risk to innovate (to create new products, processes, and sometimes new organizations
entrepreneurship
__ uses *strategic management principles *to innovate for the purpose of achieving competitive advantage
strategic entrepreneurship
innovation invovles discovering and developing new knowledge through a four-step process:
- idea
- invention
- commercialization/innovation
- imitation
4 stages of the product life cycle
- introduction stage
- growth stage
- maturity stage
- decline stage
Characteristcs of which stage of the product life cycle:
- companies use price skimming if ocmpetition is limited or penetration ppricing in a competitive market
- initial sales are low, and slotting fees to retailers are common
- building awareness is key to adoption
- companies invest in advertising
for early adopters - early adopters will pay a premium
- only a few innovators in the market
- network effects - positive effect one user has on another
introduction
Characteristcs of which stage of the product life cycle:
- rapid customer adoption and high advertising costs
- companies may lower prices in response to competition and seek exclusive distribution arrangement
- early majority buyer
- products begin to turn a profit
growth
Characteristcs of which stage of the product life cycle:
- sales still grow in the initial part of this stage, at a slower rate
- later, sales will plateau and eventually begin to move in a sightly downward direction
- competitors will have settled on a strategy intended to deliver them a sustainable competitive advantage
- price level begin to decline; price war may even occur
- late majority
maturity
Characteristcs of which stage of the product life cycle:
- sales drop significantly
- price level may increase because the number of copetitors is few
- advertising is limited or non-existent
- laggards
decline stage
___ occurs towards the end of the growth and the beginning of the maturity stages
* weaker firms are forced out
* industry consolidates
* firms begin to compete more intensely
* the strongest competitors survive
* greatest competitive weapon in this phase is PRICE
shakeout
products with a very short life cycle are known as ___
fads
what are the 4 types of innovation?
- architectural innovation
- radical innovation
- incremental innovation
- disruptive innovation
characteristics of which innovation
- replaces existing ideas, products, services, or processes
- potentially creating new markets and leading to industry changes
- lead to massive changes in an idustry and to wat is referred to as creative destruction in the marketplace
- new market / new technology
radical innovation
characteristics of which innovation
- invovle smaller improvements in ideas, products, services, and processes
- adding unique features to a product or service
- can have radical effect on the marketplace
- wireless phone lead to smartphone
- existing market / existing technology
- gillette razors
incremental
characteristics of which innovation
- embodied new product in which known components, based on existing technologies, are reconfigured in a novel way to attack new markets
- new market / existing technology
architectural
characteristics of which innovation
- leverages new technologies to attack existing markets from the bottom up
- digital photography did to the old days of taking pictures and having film developed
- existing market / new technology
disruptive innovation
first-mover advatange
competitive benefits that accrue to the successful innovator
* experience and learning curve effects
* locking in key suppliers
* build switchign costs
novel + useful + implementation = ____
innovation
after an industry standard is established, ____ become more important than ____
process innovations; product innovation
why do some firms focus on incremental innovation?
- economic incentives - established companies are focused on defending their position
- organizational inertia - established companies rely on formalized business processes and structures
- innovation ecosystem - establioshed companies are part of an ecosystem (suppliers, buyers complementors)
_____ is a theory that refers to a concept, product, or a service that creates a new value network either by entering an existing market or by creating a completely new market
* netflix
disruptive innovation
an innovation that squarely builds on the firm’s established knowledge base, steadily improves thr rpoduct or service it offers and targets existing markets by using existing technology is known as ____
incremental
when citizen, an older electronics firm, developed one of the world’s earliest hand held televisions, they reconfigured existing technology in a novel way to attack a new market. this is an example of:
architectural
although grandpa electronics inc. stll sells its vcr players, a product in its decline stage, the investments made by the company on improving or marketing the product are very low. the company has allocated the least amount of human and finacnial capital to this department. which of the followping strategies has grandpa electronics inc. adopted in this scenario?
harvest
