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60 Cards in this Set

  • Front
  • Back

A majority of newproduct development projects result in an economic return.

FALSE

A company with a shortdevelopment cycle can quickly revise or upgrade its offering.

TRUE

Asequential process has an early warning system to indicate that plannedfeatures are not manufacturable.

FALSE

Paralleldevelopment processes are universally endorsed.

FALSE

The use of executivesponsors reduces the effectiveness of the development process.

FALSE

Afirm can benefit from developing “antichampions”.

TRUE

Firmsoften make decisions about projects on the basis of marketing criteria.

FALSE

Many firms use betatesting to get customer input early in the development process.

TRUE

Supplierscan contribute ideas for product improvement or increased developmentefficiency.

TRUE

In Stage1 of the stage-gate process, the team builds a business case that includes adefined product, its business justification, and a detailed plan of action forthe next stages.

FALSE

The time elapsed fromproject initiation to product launch, usually measured in months or years isreferred to as _____.


a. diffusion of innovationtime


b. technology trajectory


c. development cycle time


d. the Six Sigma period

C. DEVELOPMENT CYCLE TIME

Which of the following is typicallytrue regarding a firm with a long development cycle time?a. It can quickly reviseor upgrade its product offering.


b. Its cost of capitalwill increase.


c. It can take advantageof both first-mover and second-mover advantages.


d. It is more likely to beable to fully amortize the fixed costs of development before that generationbecomes obsolete.

B. ITS COST OF CAPITAL WILL INCREASE

Trekker Inc. has developeda product with a very short product development cycle. Which of the followingresults can it typically expect?a. Its sales will be slowas consumers will already be committed to other products.


b. It will be able toprovide complementary goods to enhance the attractiveness of its product.


c. It will be unable to fully amortize the fixed costs of development before theproduct becomes obsolete.


d. It will not be able toupgrade its product.

B. IT WILL BE ABLE TO PROVIDE COMPLEMENTARY GOODS TO ENHANCE THE ATTRACTIVENESS OF ITS PRODUCT

Which of the followingstatements is true of partly parallel development processes?


a. It enhances theprobability that R&D will design products that are difficult tomanufacture.b. It requires costly iterations betweendesign stages.


c. It shortens overall cycle time.


d. It initiates product design after conceptdevelopment is complete.

C. IT SHORTENS OVERALL CYCLE TIME

Josh is the executive vicepresident of a bank. Recently the president of the bank asked Josh to use hisinfluence to ensure that the online banking project was developed andimplemented. Paul is being asked to be a:


a. devil’s advocate.


b. project champion.


c. entrepreneur.


d. mentor.

B. PROJECT CHAMPION

An “antichampion” is:


a. a person who wishes tosabotage a new project.


b. a person who plays therole of the “devil’s advocate.”


c. a person who usessubjective criteria to evaluate a new project.


d. a person in a competingfirm who sabotages market tests by promoting his company’s products moreheavily than normal.

B. A PERSON WHO PLAYS THE ROLE OF THE "DEVIL'S ADVOCATE"

A(n) _____of a product is an early working prototype of a product released to users fortesting and feedback.


a. beta version


b. substitute


c. spiral model


d. alphamodel

A. BETA VERSION

Astech Inc. has beendeveloping a new graphic design software. The firm releases a functional version of the software, and sends it toseveral lead users for testing. Based on the feedback from the lead users, thefirm will improve the design of the product, and begin commercial production.This initial version of the product is referred to as the _____.


a. spiral model


b. substitute product


c. beta version


d. alpha model

C. BETA VERSION

Customers who face thesame general needs of the marketplace but are likely to experience them monthsor years earlier than the rest of the market and stand to benefitdisproportionately from solutions to those needs are referred to as _____.


a. laggards


b. intrEpreneurs


c. early followers


d. lead users

D. LEAD USERS

Dr. Peterson is a professorof Information Systems at Mount Newfield University. She was asked to be a betatester for the latest version of Microsoft Office a year before it was releasedbecause she tends to use such programs in an advanced way and often developsher own solutions to problems with the programs. She made several suggestionsfor its improvement. She is a(n):


a. lead user.


b. laggard customer.


c. expert technician.


d. consumer advocate.

-

WHAT ARE THE RISKS OF CHAMPIONING?

-

AlphaCleaning Equipment Co. is experimenting with a faster and quieter machine to polishfloors. To develop this concept the company is contemplating using the lead usermethod of concept development. How does this method work? What are its advantages?

-

Across-functional team is one that has members of different ethnic backgroundsin a single functional area.

FALSE

Cross-functionalcommunication can lead to longer cycle times.

FALSE

Homogeneousteams should possess more information, on average, than heterogeneous groups.

FALSE

Ina functional team approach to new product development, team members remain intheir functional departments and meet periodically to work on the project.

TRUE

Functionalteams typically have a project manager or dedicated liaison personnel.

FALSE

Managersof lightweight teams are normally junior or middle management employees.

TRUE

Lightweightteams are appropriate for derivative projects.

TRUE

Inheavyweight teams, thelong-term career development of individual members rests with their projectmanagers rather than their functional managers.

FALSE

In the context of productdevelopment teams, which of the following is true?


a. The larger the team,the easier it is to foster a shared sense of identity among team members.


b. As the size of the teamincreases, the potential for social loafing increases.


c. Formingcross-functional teams hinders cross-fertilizationof ideas.


d. Increasing thediversity of team members eliminates the possibility of homophily.

B. AS THE SIZE OF THE TEAM INCREASES, THE POTENTIAL FOR SOCIAL LOAFING INCREASES

Karen’s supervisor, whilediscussing about her participation in a new product development team, tells herthat she has been engaging in social loafing. This indicates that Karen:


a. has been involved inwhistle blowing activities.


b. has been discriminatingagainst colleagues belonging to minority groups.


c. has not been puttingmuch effort into the team’s work.


d. has stolen officeproperty.

C. HAS NOT BEEN PUTTING MUCH EFFORT INTO THE TEAM'S WORK

At Tech Edge Inc., a special team is set up for making a robot capable of assisting blindpeople in daily activities. The members of the team are taken from variousareas of the firm including R&D, marketing, manufacturing, anddistribution. The new team is put under the charge of a senior manager. This teamis an example of a:


a. cross-functional team.


b. functional team.


c. homogenous team.


d. self-directed work team.

A. CROSS-FUNCTIONAL TEAM

Which of the following isan advantage typically associated with cross-functional teams?


a. A cross-functional interface ensures that cross-fertilization of ideas is reduced.


b. Cross-functional teams allow a project to draw on a wider mix ofinformation sources in the environment.


c. Cross-functional teamsusually reduce coordination and communication costs.


d. Cross-functional teams are most efficient ineradicating the problems related to homophily.

B. CROSS-FUNCTIONAL TEAMS ALLOW A PROJECT TO DRAW ON A WIDER MIX OF INFORMATION SOURCES IN THE ENVIRONMENT

The Vice President ofSunflower Computers is trying to decide on the composition of a new productdevelopment team. If he chooses members who are from different backgrounds, hecan reap the benefits of:


a. a broader knowledgebase.


b. lesser cross-fertilization of ideas.


c. homophily.


d. social loafing.

A. A BROADER KNOWLEDGE BASE

The Vice President ofBiomedics is trying to decide on the composition of a new product developmentteam. If she chooses members who are from multiple functional areas in thefirm, which of the following is likely to be one of the disadvantages she islikely to experience?


a. Increase in instancesof whistle-blowing


b. Increase incommunication and coordination costs


c. Lesser cross-fertilization of ideas


d. Lesser instances ofsocial loafing

B. INCREASE IN COMMUNICATION AND COORDINATION COSTS

June is the member of anew product development team. Her supervisor asked her about her experience inthe team and she replied, “Our team seems to be suffering from homophily.” Thismeans that:


a. team members arenot exerting the expected amount of effort.


b. team members spend alltheir time chatting about their personal issues.


c. team members are onlyinterested in talking to people who are senior to them.


d. team members only likeother people whom they perceive as being similar to themselves.

D. TEAM MEMBERS ONLY LIKE OTHER PEOPLE WHOM THEY PERCEIVE AS BEING SIMILAR TO THEMSELVES

Ruth works in the advertising department of hercompany. It was observed that she interacted morefrequently and more intensely with team members who shared her interests andsocial background and ignored others. This phenomenon exhibited by Ruth isreferred to as:


a. free riding.


b. social loafing.


c. homophily.


d. groupthink.

C. HOMOPHILY

Albert has put together a new product developmentteam based on the functional team structure. Which of the following is most likely to be trueabout this team?


a. Team members will spendup to 50% of their time on team-related activities.


b. The team will typically require dedicated liaison personnel.


c. The team will have a high degree of cross-functional integration.


d. The team structure will be straightforward toimplement.

D. THE TEAM STRUCTURE WILL BE STRAIGHTFORWARD TO IMPLEMENT

Which of the following istrue of functional teams?


a. Functional teams consist of members frommultiple areas in the firm such as R&D, marketing, manufacturing,distribution, and so on.b. Thefunctional team structure provides littleopportunity for cross-functional coordination.c. Functional teams are not appropriate forderivative projects that affect only a single function.


d. Functional teams are usually permanent.

B. THE FUNCTIONAL TEAM STRUCTURE PROVIDES LITTLE OPPORTUNITY FOR CROSS-FUNCTIONAL COORDINATION

Thevalue of a technological innovation is solely determined by what the technologycan do.

FALSE

Firmsshould always be racing to launch their products as early as possible.

FALSE

Cannibalizationis the process by which a firm’s sales of one product diminishes as a result ofa substitute product offering by a competitor.

FALSE

If a firm willingly cannibalizes its existing products with more advancedproducts, the firm can make it very easy for other firms to achieve atechnological lead large enough to prove persuasive to customers.

FALSE

Ifa firm wishes to avoid giving away its own installed base or complementarygoods advantages to others, it should ensure that its products are incompatiblewith those of future entrants.

TRUE

Ifa firm’s objective is maximum market skimming, it will initially set a highprice on new products.

TRUE

Firms intending tomaximize market share, typically use marketskimming pricing strategy.

FALSE

Firmsin industries characterized by increasing returns will use the objective ofmaximizing market share and a penetration pricing strategy.

TRUE

Whenmanufacturers bypass wholesalers and retailers to sell directly to end users itis called backward compatibility.

FALSE

Ifcustomers require extensive education and service,selling through mail order or online ordering may be the best option.

FALSE

When Pearl Love introducedits new range of body wash, consumers switched from using soaps, sold under thesame brand, to its new body wash. As a result, the company experienced a sharpdrop in its soap sales. This is best known as:


a. cannibalization.


b. the vampire effect.


c. the halo effect.


d. vaporware.

A. CANNIBALIZATION

BioSense Prosthetics was aleader in the prosthetic arm market and profits from it were very high. Thefirm developed a new computerized prosthetic arm that would render its previousprosthetics obsolete. It decided to withhold the new computerized prostheticarm from the market. This will allow the firm to:


a. minimize its return oninvestment in developing each generation of the product.


b. make its productsbackward compatible.


c. avoid cannibalizationof the sales of its current prosthetics.


d. build a largerinstalled base for the new computerized prosthetic.

C. AVOID CANNIBALIZATION OF THE SALES OF ITS CURRENT PROSTHETICS

Maverick Systems was aleader in the phone market and profits from its cell phones were very high.Maverick Systems developed a new generation smartphone and has been advised bya consulting firm to “embrace cannibalization.” This means that the companyshould:


a. introduce the newtechnology right away and increase its market lead while taking away profitsfrom its present product.


b. delay introduction ofthe next generation product until profits have begun to significantly decreasefor the current product.


c. use up most of itsfinancial resources in promoting the new phone.


d. wait for the previouscell phone to become obsolete and then introduce this new phone into themarket.

A. INTRODUCE THE NEW TECHNOLOGY RIGHT AWAY AND INCREASE ITS MARKET LEAD WHILE TAKING AWAY PROFITS FROM ITS PRESENT PRODUCT

If a firm invests incontinuous innovation and willingly cannibalizes its existing products withmore advanced products, the firm can:


a. lose a significantnumber of customers to competitors.


b. make its products morebackward compatible.


c. prevent competitorsfrom achieving a significant technological lead.


d. gain greater trust fromdistributors who have huge stocks of the existing product.

C. PREVENT COMPETITORS FROM ACHIEVING A SIGNIFICANT TECHNOLOGICAL LEAD

Genetech Inc. has produced a new generation video game console. The new product can still be used to run the same games as the previous generation of the video game console. In this context, Genetech is typically applying:


a. backward integration.


b. backward compatibility.


c. backward linkage.


d. backward traceability.

B. BACKWARD COMPATIBILITY

Speeding Horse Inc., the leader in the video game console market, is making its new generation consoles backward compatible with its previous games. This means that:


a. it is giving away its own installed base or complementary goods advantages to competitors.


b. it is providing a significant incentive to the owners of its previously developed consoles and games.


c. the transition of customers throughproduct generations will become difficult.


d. a largerange of complementary goods of the previous generations, mainly the games,will lose its existing value and utility.

B. IT IS PROVIDING A SIGNIFICANT INCENTIVE TO THE OWNERS OF ITS PREVIOUSLY DEVELOPED CONSOLES AND GAMES

Which of the following is an advantage of making a new generation of technology backward compatible?


a. Consumers will have to buy completely new complements.


b. Consumer switching costs may be lower because they anticipate using their existing complements.


c. It allows a firm toreap the benefits of cannibalization.


d. It is typically lessexpensive to make a new generation of technology backward compatible than tomake it incompatible.

B. CONSUMER SWITCHING COSTS MAY BE LOWER BECAUSE THEY ANTICIPATE USING THEIR EXISTING COMPLEMENTS

A(n) _____ price strategy prices goods to covervariable costs and some fixed costs.


a. market skimming


b. penetration


c. survival


d. economy

C. SURVIVAL

When Sports 360, a sportsbar in New York, 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 cityalready had too many sports bars and Sports 360 intended on being one of those left after the inevitable shake out. The best pricing strategy for Sports 360will be:


a. premium pricing.


b. market skimming.


c. survival pricing.


d. a freemium program.

C. SURVIVAL PRICING

In the context of Gladwell’s theories, define the terms connectors, mavens, and salespersons.

-