E2, Ch 7 Cont.

Question 1

incremental innovation

Answer 1

builds on est. knowledge and results from steady improvement

Question 2

radical innovation

Answer 2

novel methods and materials; entirely new knowledge base or recombination of existing knowledge

Question 3

why incumbent firms tend to focus on incremental innovation (3)

Answer 3

• economic incentive of defending their position
• organizational inertia, aka having formalized processes/structure
• innovation ecosystem of relying on certain suppliers, buyers, etc.

Question 4

architectural innovation

Answer 4

• existing tech. leveraged into new market
• known components used in a novel way
  ex. iPod

Question 5

disruptive innovation

Answer 5

leverages new tech in EXISTING markets; new product/process meeting existing consumer need
ex. Blockbuster –> Netflix

Question 6

stealth attack

Answer 6

where a disruptive innovation invades the market from the bottom-up (capturing the low-end)

Question 7

platform business

Answer 7

enables interactions and matches b/w producers and consumers, providing infrastructure and set governance conditions
ex. Instagram

Question 8

pipeline business

Answer 8

linear transformation through value chain using R&D –> design –> manufacture –> sell
ex. Ford

Question 9

players in a platform ecosystem:

Answer 9

owners – controller
producers – create platform’s offering
consumers – buyers
providers – interfaces for the platform (ex. Verizon)

Question 10

3 advantages of the Platform Business Model

Answer 10

• scale more efficiently by eliminating gatekeepers
• unlock new sources of value creation and supply
• benefit from community feedback

Question 11

leveraging _______ _____ is key to platform business success

Answer 11

network effects
ex. Airbnb business model

Question 12

entrepreneurs create…
and commercialize…

Answer 12

…new products/processes and value for society
…ideas and inventions

Question 12

entrepreneurship

Answer 12

process by which change agents (entrepreneurs) undertake economic risk to innovate

Question 13

Overtime, the number and size of _______ change;
different ______ enter the market;
_______ and ______ changes;
and different _________ will be needed for the firm to perform.

Answer 13

competitors
consumers
supply and demand
competencies