Innovation Strategy and Shaping Innovation Words (Ch 3,5 ,6)

Question 1

Technological spillovers

Answer 1

A positive externality from R&D resulting from the spread of knowledge across organizational or regional boundaries.

Question 2

Dynamic capability

Answer 2

A set of abilities that make a firm more agile and responsive to change.

Question 3

Casually ambiguous

Answer 3

The relationship between a resource and the outcome it producers is poorly understood (the causal mechanism is ambiguous)

Question 4

Socially complex

Answer 4

Resources or activities that emerge through the interaction of multiple individuals

Question 5

Stakeholder

Answer 5

Any entity that has an interest (“stake”) in the organization

Question 6

Complements

Answer 6

Product or services that enhance the usefulness or desirability of another product

Question 7

Vertical integration

Answer 7

Getting into the business of one’s suppliers (backward vertical integration) or one’s buyers (forward vertical integration). For example, a firm that begins producing its own suppliers has practiced backward vertical integration and a firm that buys its distributor has practiced forward vertical integration.

Question 8

Switching costs

Answer 8

Factors that make it difficult or expensive to change suppliers or buyers, such as investments in specialized assets to work with a particular supplier or buyer.

Question 9

Entry Barriers

Answer 9

Conditions that make it difficult or expensive for new firms to enter an industry (government, regulation, large startup costs etc.)

Question 10

Exit barriers

Answer 10

Costs or other commitments that make it difficult for firms to abandon an industry (large fixed assets investments, emotional commitment to the industry etc.)

Question 11

Oligopolistic industries

Answer 11

Highly consolidated industries with a few large competitors

Question 12

Enabling technologies

Answer 12

Component technologies that are necessary for the desirability of a given innovation.

Question 13

Incumbent inertia

Answer 13

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 14

Monopoly rents

Answer 14

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 15

Late entrants

Answer 15

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

Question 16

Early followers

Answer 16

Entrants that are early to market, but not first.

Question 17

First movers

Answer 17

The first entrants to sell in a new product or service category

Question 18

Increasing returns

Answer 18

When the rate of return (not just gross returns) from a product or process increases with the size of installed base.

Question 19

Path dependency

Answer 19

When end results depend greatly on the event that took place leading up to the outcome. It is often impossible to reproduce the results that occur in such a situation.

Question 20

Complementary goods

Answer 20

Additional goods and services that enable or enhance the value of another good. For example, the value of a video game console is directly related to the availability of complementary goods such as video games, peripheral devices and services such as online gaming

Question 21

Installed base

Answer 21

The number of users of a particular good. For instance, the installed base of a particular video game console refers to the number of those consoles that are installed in homes worldwide.

Question 22

Network externalities

Answer 22

Also termed positive consumption externalities, this is when the value of a good to a user increases with the number of other users of the same or similar good.

Question 23

Absorptive capacity

Answer 23

The ability of an organization to recognize, assimilate and utilize new knowledge.

Question 24

Discontinuous technology

Answer 24

A technology that fulfills a similar market by building on an entirely new knowledge base

Question 25

Architectural innovation

Answer 25

An innovation that changes the overall design of a system of the way its components interact with each other.

Question 26

Component or modular innovation

Answer 26

An innovation to one to more components that does not significantly affect the overall configuration of the system.

Question 27

Competence enhancing (-destroying) innovation

Answer 27

An innovation that builds on (renders obsolete) existing knowledge and skills. Whether an innovation is competence enhancing or competence destroying depends on whose perspective is being taken. An innovation can be competence enhancing to one firm, while competence destroying for another.

Question 28

Incremental innovation

Answer 28

An innovation that makes a relatively minor change from (or adjustment to) existing practices.

Question 29

Radical innovation

Answer 29

An innovation that is very new and different from prior solutions.

Question 30

Technological trajectory

Answer 30

The path a technology takes through its lifetime. This path may refer to its rate of performance improvement, its rate of diffusion or other change of interest.