WPC 480 Final Exam Questions with
Verified Answers
Bell Ring Brands is a manufacturer of educational toys for children. Six months ago, the
company's research and development division came up with an idea for a unique
touchscreen device that can be used to introduce children to a number of foreign
languages. Three months ago, the company produced a working prototype, and last
month the company successfully launched its new device on the commercial market.
What should BellRing Brands's managers prepare for next?
A) a difficult struggle to move from invention to innovation
B) increased competition from imitators
C) a prolonged period of uncontested success
D) a sharp decline in demand for the product - Answer-B) increased competition from
imitators
Which of the following lists the stages of the industry life cycle in the correct order?
A) introduction, shakeout, maturity, growth, and decline
B) introduction, shakeout, growth, maturity, and decline
C) introduction, growth, shakeout, maturity, and decline
D) introduction, growth, maturity, shakeout, and decline - Answer-C) introduction,
growth, shakeout, maturity, and decline
After the creation of social networking websites were introduced, their value increased
exponentially as the number of users increased. This is the positive effect of a(n)
A) network effect.
B) user effect.
C) confirmation effect.
D) impression management effect. - Answer-A) network effect.
Which of the following most accurately describes a difference between incremental
innovation and radical innovation?
A) Incremental innovation researches new materials; radical innovation researches new
processes.
B) Incremental innovation targets new markets and technologies; radical innovation
reinvents markets and technologies.
C) Incremental innovation builds on an established knowledge base; radical innovation
uses an entirely different knowledge base.
D) Incremental innovation draws on novel methods; radical innovation draws on proven
methods. - Answer-C) Incremental innovation builds on an established knowledge base;
radical innovation uses an entirely different knowledge base.
, Adaptive Biotechnologies Inc. is a company that builds diagnostic devices. It was the
first company to develop a compact MRI scanner by reconfiguring the components of
the MRI technology. This smaller and user-friendly version of the huge MRI scanner
created demand from small hospitals, nursing homes, and private practice doctors who
were earlier dependent on the scanning machines in large hospitals. Which of the
following types of innovations does this scenario best illustrate?
A) incremental innovation
B) disruptive innovation
C) radical innovation
D) architectural innovation - Answer-D) architectural innovation
Using the Boston Consulting Group growth-share matrix, the managers of Fasehatice
International determined that their business unit devoted to personal health monitoring
devices was a star. Based on this finding, which of the following strategies is likely to
produce the best results?
A) Harvest as much cash flow as possible before shutting the business down.
B) Immediately divest from the personal health monitoring industry.
C) Increase investment in the personal health monitoring unit to encourage future
growth.
D) Seek to lower costs in the personal health monitoring unit to increase market share. -
Answer-C) Increase investment in the personal health monitoring unit to encourage
future growth.
Condax Electronics relied on a large chain of consumer electronics stores to sell its
tablet computers, cell phones, and televisions and also to provide customer service and
technical support. However, that retailer outsourced its service departments, and
customers began to complain that they could not get reliable tech support for Condax
products. In response, Condax Electronics decided to set up its own tech support
department, and it also began to investigate opening its own brand-based retail stores.
What does this scenario best illustrate?
A) new product development
B) conglomerate diversification
C) crowdsourcing
D) forward vertical integration - Answer-D) forward vertical integration
Danke Inc. is a diversified firm that creates more value than the cost that it incurs. As a
result, they are experiencing a diversification premium in their stock price. Danke Inc. is
able to accomplish all of the following except
A) increase their costs but maintain their current stock price.
B) provide economies of scale, which reduces Danke's costs.
C) exploit economies of scope, which increases Danke's value.
Verified Answers
Bell Ring Brands is a manufacturer of educational toys for children. Six months ago, the
company's research and development division came up with an idea for a unique
touchscreen device that can be used to introduce children to a number of foreign
languages. Three months ago, the company produced a working prototype, and last
month the company successfully launched its new device on the commercial market.
What should BellRing Brands's managers prepare for next?
A) a difficult struggle to move from invention to innovation
B) increased competition from imitators
C) a prolonged period of uncontested success
D) a sharp decline in demand for the product - Answer-B) increased competition from
imitators
Which of the following lists the stages of the industry life cycle in the correct order?
A) introduction, shakeout, maturity, growth, and decline
B) introduction, shakeout, growth, maturity, and decline
C) introduction, growth, shakeout, maturity, and decline
D) introduction, growth, maturity, shakeout, and decline - Answer-C) introduction,
growth, shakeout, maturity, and decline
After the creation of social networking websites were introduced, their value increased
exponentially as the number of users increased. This is the positive effect of a(n)
A) network effect.
B) user effect.
C) confirmation effect.
D) impression management effect. - Answer-A) network effect.
Which of the following most accurately describes a difference between incremental
innovation and radical innovation?
A) Incremental innovation researches new materials; radical innovation researches new
processes.
B) Incremental innovation targets new markets and technologies; radical innovation
reinvents markets and technologies.
C) Incremental innovation builds on an established knowledge base; radical innovation
uses an entirely different knowledge base.
D) Incremental innovation draws on novel methods; radical innovation draws on proven
methods. - Answer-C) Incremental innovation builds on an established knowledge base;
radical innovation uses an entirely different knowledge base.
, Adaptive Biotechnologies Inc. is a company that builds diagnostic devices. It was the
first company to develop a compact MRI scanner by reconfiguring the components of
the MRI technology. This smaller and user-friendly version of the huge MRI scanner
created demand from small hospitals, nursing homes, and private practice doctors who
were earlier dependent on the scanning machines in large hospitals. Which of the
following types of innovations does this scenario best illustrate?
A) incremental innovation
B) disruptive innovation
C) radical innovation
D) architectural innovation - Answer-D) architectural innovation
Using the Boston Consulting Group growth-share matrix, the managers of Fasehatice
International determined that their business unit devoted to personal health monitoring
devices was a star. Based on this finding, which of the following strategies is likely to
produce the best results?
A) Harvest as much cash flow as possible before shutting the business down.
B) Immediately divest from the personal health monitoring industry.
C) Increase investment in the personal health monitoring unit to encourage future
growth.
D) Seek to lower costs in the personal health monitoring unit to increase market share. -
Answer-C) Increase investment in the personal health monitoring unit to encourage
future growth.
Condax Electronics relied on a large chain of consumer electronics stores to sell its
tablet computers, cell phones, and televisions and also to provide customer service and
technical support. However, that retailer outsourced its service departments, and
customers began to complain that they could not get reliable tech support for Condax
products. In response, Condax Electronics decided to set up its own tech support
department, and it also began to investigate opening its own brand-based retail stores.
What does this scenario best illustrate?
A) new product development
B) conglomerate diversification
C) crowdsourcing
D) forward vertical integration - Answer-D) forward vertical integration
Danke Inc. is a diversified firm that creates more value than the cost that it incurs. As a
result, they are experiencing a diversification premium in their stock price. Danke Inc. is
able to accomplish all of the following except
A) increase their costs but maintain their current stock price.
B) provide economies of scale, which reduces Danke's costs.
C) exploit economies of scope, which increases Danke's value.
