Midterm Multiple Choice Flashcards
Why is studying new products important?
A) Because it mainly emphasizes short-term profitability through marketing and distribution, with little emphasis on long-term innovation or technical development.
B) Because it is a multi-billion-dollar industry dedicated to technical development, with creating radical innovations considered a key business challenge by experts like Gary Hamel.
C) Because it focuses on improving existing products and enhancing customer satisfaction without major technological advancements.
B
Why is having a global innovation culture critical for success?
A) Because it emphasizes a one-size-fits-all approach to innovation, neglecting the importance of understanding local market dynamics and cultural nuances.
B) Because it enables firms to understand and adapt to diverse business and cultural environments, fostering openness to global markets, which is essential for sustained success.
C) Because it allows companies to focus exclusively on local market conditions, ignoring the influence of global cultural and business environments.
B
Why do top firms invest heavily in global product development?
A) To reduce the complexity of product development by focusing only on local markets and minimizing international collaboration.
B) Because over 50% of their R&D spending is deployed in foreign countries, allowing them to leverage global product skills and conduct design, R&D, and manufacturing in various subsidiaries worldwide.
C) To centralize all R&D activities in one location, ensuring uniform product development across all markets
B
Why does Procter & Gamble engage in global product development?
A) Because the company focuses on regionalized product strategies, conducting all research and testing within a single geographical zone to minimize complexity and cost.
B) Because Procter & Gamble integrates insights from 22 research centers across 13 countries, with product testing and market research, such as for the Swiffer, conducted in multiple regions, including the U.S. and France.
C) Because the company relies exclusively on a centralized research and development hub in the U.S., limiting global input and market testing.
B
Why is IKEA’s approach to product development considered effective?
A) Because IKEA focuses primarily on high-volume, low-cost production, limiting design input and using only local manufacturing partners to streamline the supply chain and reduce complexity.
B) Because IKEA actively seeks to identify unmet customer needs, encouraging both in-house and outsourced designers to compete for designs, while also fostering competition among global manufacturing partners and maintaining exceptional logistics for product delivery.
C) Because IKEA centralizes all design and manufacturing decisions in one region, relying solely on internal teams and minimizing external partnerships or competition.
B
Why is the new products team at firms typically cross-functional?
A) Because it enables departments like marketing and design to dominate the product development process, with minimal input from engineering, R&D, or production teams.
B) Because it encourages collaboration between various departments, fostering innovation and efficiency by combining expertise from marketing, R&D, engineering, manufacturing, production, and design.
C) Because it allows for specialization in individual departments, ensuring that each area works in isolation to optimize their specific functions without interference.
B
What are new-to-the-firm products?
A) Products that are created for a firm’s existing customer base, requiring no major shifts in strategy or product category.
B) Products that take a firm into a category it has never entered before, such as P&G’s first shampoo or Canon’s laser printer, representing a significant expansion into new product areas.
C) Products that are introduced into a market the firm has already been involved in, typically involving minor variations or improvements on existing products.
B
What are new-to-the-world (really-new) products?
A) Products that are variations of existing products, focusing on enhancing features without fundamentally changing the market or consumer behavior.
B) Products that create entirely new markets by introducing groundbreaking inventions, such as the Polaroid camera or the iPod, which did not exist before.
C) Products that make incremental improvements to existing categories, such as the next generation of smartphones or enhanced versions of household cleaning products.
B
What are repositionings in product development?
A) Products that are redesigned to offer additional features without changing their original target market or purpose.
B) Products that are modified to meet new regulatory standards or safety requirements, without altering their core functionality or target market.
C) Products that are reintroduced to the market for a new use or application, often targeting different customer segments or solving new problems, such as a cleaner initially marketed for kitchens now being promoted for use in bathrooms.
C
What are cost reductions in product development?
A) Products that are introduced as premium alternatives to existing products, with an emphasis on exclusive features and higher pricing.
B) New products that deliver similar performance as existing products but at a lower cost, typically achieved through innovative design or more efficient production methods.
C) Products that focus on enhancing features and improving performance, often increasing the cost of production to provide higher value.
B
Why is long-term focus on innovation important for companies like Intel and Gillette?
A) Because without innovation, companies often resort to incremental changes, leading to product stagnation and missed opportunities to develop new product lines or enter new markets.
B) Because innovation is less important for market leaders, who can simply rely on brand strength and customer loyalty to maintain their competitive advantage.
C) Because without a strong focus on innovation, companies risk falling into complacency, continuing to improve existing products rather than introducing truly new or groundbreaking products.
C
Why do the best new product firms continue to commit to innovation?
A) Because the biggest factor contributing to success is developing a unique, superior product that adds significant value for the customer, ensuring long-term growth and differentiation.
B) Because continuous innovation allows firms to stay ahead of competitors by improving existing products and focusing on short-term market trends.
C) Because it is essential to only focus on cost efficiency and standard product lines to ensure steady profits without taking risks.
A
Why is the Product Innovation Charter (PIC) crucial in the new product process?
A) Because it serves as a general guideline, offering a loose framework that allows teams to explore various product development opportunities without clear direction.
B) Because the PIC ensures that all departments involved in product development are working independently, without the need for strategic alignment.
C) Because the PIC provides strategic direction, helping the team focus efforts on identifying opportunities and guiding product development toward aligned goals, preventing unfocused attempts.
C
Why does P&G Cosmetics follow a strategic approach to adding new products?
A) Because they launch new products as quickly as possible to maintain constant visibility in the marketplace, regardless of existing competition.
B) Because P&G Cosmetics carefully times its product launches, ensuring that excitement is maximized without over-saturating the market, a strategy referred to as the “initiative rhythm.”
C) Because P&G Cosmetics focuses primarily on incremental improvements to existing products, avoiding the introduction of entirely new items to prevent market disruption.
B
Why is organizational structure important in accelerating time to market?
A) Because it allows teams to work independently without the need for strong leadership or collaboration, speeding up decision-making.
B) Because effective leadership, along with a focus on organizational learning and knowledge transfer, ensures that the team is empowered and aligned, improving efficiency and accelerating time to market.
C) Because it prioritizes short-term gains over long-term strategy, focusing on individual contributions rather than team collaboration.
B
