Product Development and Innovation Exam
Bank
Course Introduction
Product Development and Innovation explores the methodologies, processes, and strategies behind creating successful new products in dynamic markets. The course covers the entire product lifecycle, including ideation, concept development, prototyping, market analysis, design thinking, and commercialization. Students analyze real-world case studies, learn to balance creativity with feasibility, and assess risk, while engaging in hands-on projects that simulate product development teams. Emphasis is placed on innovative approaches for generating value, fostering user-centered design, and leveraging cross-functional collaboration to bring novel solutions to market.
Recommended Textbook
Strategic Management of Technological Innovation 3rd Edition by Melissa A. Schilling
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Chapter 1: Introduction
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Q1) Firms that charge headlong into new product development usually have short development cycles.
A)True
B)False
Answer: False
Q2) If you were the director of R&D at a large pharmaceutical company,how might you apply the concept of "the innovation funnel?"
A) Hire more people because most of them will turn out to be mediocre.
B) Encourage more new ideas because it takes thousands of new ideas to come up with one successful new product.
C) Discourage more new ideas because most of them end up being useless and waste time and energy.
D) The innovation funnel concept can not be used by a person in this position. Answer: B
Q3) Technology in its purest form is not knowledge,but rather faith that things will get better.
A)True
B)False
Answer: False
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Page 3
Chapter 2: Sources of Innovation
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Q1) Southeaster Athletic Mats,Inc.produces gym mats for school and health clubs.The company recently put a metal box near the time clock and asked employees to submit ideas in writing for improved productivity.It offered $10 for every idea it implemented.This is an example of a(n)
A) employee-driven idea system (EDIS).
B) suggestion box.
C) legal bribe.
D) applied research.
Answer: B
Q2) The most frequent collaborations are between firms and their customers,suppliers,and local universities.
A)True
B)False
Answer: True
Q3) Research suggests that most innovation is due to the discovery of something fundamentally new.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Types and Patterns of Innovation
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Q1) Susan,a highly skilled office worker,came home with a personal computer she had just purchased.Her husband Bill soon discovered that Susan did not know how to use half the features of the computer or its software.This is most likely due to the fact that
A) the company's market research findings are faulty.
B) the company has added features faster than customer requirements.
C) those features do not really work.
D) Susan is not a part of the company's target market.
Answer: B
Q2) Once a dominant design of a new product is reached
A) the product is no longer profitable.
B) a new technology has already arrived.
C) you have begun the fluid phase.
D) companies focus on making the production more effective and efficient.
Answer: D
Q3) The radicalness of an innovation is absolute.
A)True
B)False
Answer: False
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5
Chapter 4: Standards Battles and Design Dominance
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Q1) Due to network externalities,the benefit from using eBay to buy and sell goods decreases with the number of users of eBay.
A)True
B)False
Q2) As the sales of a company's product increases and as the company learns from its experiences,the cost of making the product should A) decrease.
B) increase.
C) level out
D) not be affected.
Q3) Joseph had an idea that he could speed up a floor buffing machine by putting a different motor on it.After about 25 tries he was able to make a buffer run much faster with a new motor and started his own company.Other companies began making competing products that were similar to Joseph's design,but they were unable to improve their designs as fast as Joseph.Why might this be the case?
Q4) Monopoly costs take the form of an s-shape.
A)True
B)False
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Chapter 5: Timing of Entry Part Two Formulating
Technological Innovation Strategy
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Q1) Which of the following statements is true regarding customer preferences?
A) The importance of technological features to customers stays constant over time.
B) Customers themselves are unsure about the importance of different features offered by a technology.
C) All pioneers have faced customer uncertainty.
D) Established customer preferences are undesirable by producers.
Q2) In the video game console industry,Magnavox was the first mover but was not the winner.Atari and Nintendo came up with their respective gaming consoles soon afterwards.They were
A) also first movers.
B) early movers
C) laggards.
D) late movers.
Q3) Explain why sometimes the follower and not the first mover of a new technology is more successful in the market place.
Q4) Early followers typically bear the bulk of the research and development expenses.
A)True
B)False
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Chapter 6: Defining the Organizations Strategic Direction
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Q1) Explain why Prahalad and Hamel compare core competencies to roots.
Q2) Since the commercial aircraft industry is oligopolistic,one would expect the rivalry to be modest to low.
A)True
B)False
Q3) The Food Baskets grocery chain set a goal to reduce their stock out rates by 20 percent.This is a goal according to the _____ perspective of the balanced scorecard.
A) internal
B) logistics
C) operational
D) learning
Q4) When the Arizona grocery store chain,Smitty's,told Associated Grocers (AG)to give them a bigger price discount or they would open their own warehouse and distribution center,AG listened because Smitty's was a big customer.This is an example of the A) bargaining power of buyers.
B) bargaining power of sellers.
C) threat of substitutes.
D) technological substitution.
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8
Chapter 7: Choosing Innovation Projects
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Q1) Discounted cash flow estimates are only as accurate as the original estimates of profits,time,risk,and cost.
A)True
B)False
Q2) Using the real options approach,if the cost of future investments to capitalize on the R&D program is less than the returns from this investment,then
A) the program should be abandoned.
B) the program should be pursued.
C) further calculations should be made.
D) the exercise price should be determined.
Q3) Poduck Regional Medical Center has decided to build a new wing for its outpatient services.Poduck wants to know which services are important to its patients in this new wing.Do they prefer large waiting rooms for family members or small rooms adjacent to recovery rooms? Do they prefer patient advocates to keep them informed or would nurses be better? What technique would be appropriate to come up with weights and tradeoffs for these types of services? Explain why the technique you recommend is best.
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Chapter 8: Collaboration Strategies
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Q1) Effective collaboration agreements should be flexible enough to provide a graceful exit strategy for members that no longer wish to participate in the collaboration.
A)True
B)False
Q2) A firm's effectiveness at managing its collaborations will increase with the number of collaborations to which it is committed.
A)True
B)False
Q3) Gerusa is a company of former Soviet scientists who have developed a method of killing cancer cells with light in a process called Photodynamic Therapy (PDT).While the scientists have the medical knowledge,they are short on equipment,money,and marketing know-how.As a consultant what would you advise Gerusa to do?
Q4) Hammerschmidt Copiers has developed and patented a new copy machine.It wishes to penetrate a wider market and is short on funds.A licensing arrangement would be a good way to accomplish this goal.
A)True
B)False
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10
Chapter 9: Protecting Innovation
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Q1) If you live in a country that is a member of the Madrid Union and you register a trademark,that trademark is valid throughout the entire world.
A)True
B)False
Q2) Which of the following is likely to happen if Singing Cards decides to protect its technology that makes singing greeting cards possible?
A) Singing Cards is not likely to improve the technology.
B) Singing Cards may discourage the development of advertising for this new technology.
C) Singing Cards may subsidize the development of complementary technology.
D) Singing Cards will probably have more incentive to invest money in technological development, promotion, and distribution.
Q3) If a computer hardware company gives access to parts of its technology to a few software companies so they can produce complementary programs,but maintains approval of those programs before they can go on the market,it is providing limited licensing.
A)True
B)False
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11
Chapter 10: Organizing for Innovation
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Q1) Michael is a part of a new product development team that operates nearly autonomously from its parent organization-WorldLogix.Within the team,there is a considerable decentralization of authority and little bureaucracy.Michael's team can be referred to as
A) a modular team.
B) skunk works.
C) an inorganic group.
D) a loosely coupled team.
Q2) When large companies break up into networks of small,often more autonomous divisions of independent firms it is called the Icarus Paradox.
A)True
B)False
Q3) Formalization refers to the degree to which a firm's decision-making authority is retained only at high levels of the firm's hierarchy.
A)True
B)False
Q4) What are some of the advantages and disadvantages of large firms in terms of R&D?
Q5) Explain why a mechanistic organizational structure can stifle creativity.
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Chapter 11: Managing the New Product Development Process
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Q1) The criteria in the go/kill decision points are the questions or metrics used to make the decision regarding whether or not to kill the project or allow it to proceed.
A)True
B)False
Q2) The House of Quality uses a scale from one to ten to evaluate competing products.
A)True
B)False
Q3) QFD was developed in Germany.
A)True
B)False
Q4) Which of the following might be used to determine a company's overall innovation performance?
A) Return on innovation
B) Average cycle time
C) Percent of development projects meeting deadlines
D) Percent of development projects staying within or under budget
Q5) Explain the value of the stage-gate process of new product development.
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Chapter 12: Managing New Product Development Teams
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Q1) Autonomous teams usually undertake derivative projects.
A)True
B)False
Q2) Marion has argued that with modern information technologies,collocation of team members is no longer important.How would you respond to this claim?
Q3) Which of the following are the advantages of collocation?
A) It provides opportunities for rich face-to-face communication.
B) It is suitable for teams whose members are spread across distances.
C) It reduces employee and organizational travel expenses.
D) It facilities independent work.
Q4) Homogeneous teams should possess more information,on average,than heterogeneous groups.
A)True
B)False
Q5) Functional team members are usually highly committed to development projects.
A)True
B)False
Q6) Heavyweight teams are permanent in nature.
A)True
B)False
Page 14
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Chapter 13: Crafting a Deployment Strategy Index
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Q1) When Sports Paradise saw yet another sports bar open up across the street it knew that it would have to lower its price again to stay in business.The city already had too many sports bars and Sports Paradise intended on being one of those left after the inevitable shake out.Sports Paradise will be following a _____ pricing strategy.
A) penetration
B) skimming
C) survival
D) predatory
Q2) Innovators are unwilling to accept incompleteness in products.
A)True
B)False
Q3) Firms should constantly focus on launching their products as early as possible.
A)True
B)False
Q4) Bundling products together can offer firms the advantage of switching costs.
A)True
B)False
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