chapter 5

Question 1

first movers

Answer 1

the first entrants to sell in a new product or service category.

Question 2

early followers

Answer 2

entrants that are early to the market, but not first.

Question 3

late entrants

Answer 3

entrants that do not enter the market until the time the product begins to penetrate the mass market or later.

Question 4

monopoly rents

Answer 4

the additional returns (either higher revenues or lower costs) a firm can make from being a monopolist, such as the ability to set high prices, or the ability to lower costs through greater bargaining power over suppliers.

Question 5

incumbent inertia

Answer 5

the tendency for incumbents to be slow to respond to changes in the industry environment due to their large size, established routines, or prior strategic commitments to existing suppliers and customers.

Question 6

enabling technologies

Answer 6

competent technologies that are necessary for the performance or desirability of a given innovation. when firms develop technologies, they often rely on other producers of enabling technologies. also, many products require complementary goods to be useful or valuable.

Question 7

fast-cycle development process

Answer 7

needed if a firm intends to refine an earlier entrant’s technology and beat the earlier entrant to the market with a new version of this technology. the firm should be able to take advantage of both first- and second-mover advantages.

Question 8

parallel development process

Answer 8

occurs when multiple stages of the new product development process occur simultaneously.