BCOR 2304 Final Exam2 QUESTIONS AND CORRECT
ANSWERS (VERIFIED AND WELL DETAILED
ANSWERS) LATEST UPDATE 2024/2025
What dies the industry life cycle explain? - ✔✔The innovation process and the affects of the
evolvement of an industry
What are the 5 stages of the industry life cycle? - ✔✔1. Introduction
2. Growth
3. Shakeout
4. Maturity
5. Decline
Characteristics of Introduction stage (ILC) - ✔✔1. launch of successful innovation
2. Only a few firms in the industry
3. demand is limited due to lack of knowledge
4. Excessive costs
5. Entry barriers are high due to limited demand and high production costs
Characteristics of growth stage (ILC) - ✔✔1. Innovation has gained market acceptance
2. Increased demand due to value recognition
3.Low competition because it takes time to enter the market
4. economies of scale is reached
5. Industry standards established
Characteristics of shakeout stage (ILC) - ✔✔1. stage when growth rate of demand starts to
decline and increased entrants enter
,2. Weaker firms are acquired or exit
3. Winners are large and enjoy economies of scale
Characteristics of maturity stage (ILC) - ✔✔1. Demand stabilizes
2. Few firms with large market share
3. Demand growth rate = 0
Examples: Airliners
Characteristics of decline stage (ILC) - ✔✔1. Demand declines
What four options do firms have when in a declining industry? - ✔✔Exit: Thorough
bankruptcy or liquidation
Harvest: reduce investment and maximize cash flow
Maintain: Continue to support marketing activities
Consolidate: buy rivals, aim for monopoly
What are the benefits of being a first mover in the ILC? - ✔✔1. limited competition
2. growing customer demand
3. Set standard
4. Establish significant brand loyalty
what are the disadvantages of being a first mover in the ILC? - ✔✔1. Pioneering Costs- later
entrants free ride on frist movers, R&D costs, Customer education, Uncertainty of customer
demand
What are the two ways of characterizing an innovation? - ✔✔Tech: Whether an innovation is
based on a new or existing tech
Market: Whether an innovation is introduced into a new or an existing market?
, Incremental innovation - ✔✔existing tech to meet existing demand
Example: Coca-cola updating marketing
Radical innovation - ✔✔uses new tech to meet new demand
-Example: Introduction of the internet
Architectural innovation - ✔✔Leverages existing technology into new markets
Alters the architecture of a product
A new product, with known components, used in a novel way
Ex: Existing cellphone tech to supply new communication services
Disruptive innovation - ✔✔Introduction of new tech into existing markets
ex: Chat bots vs traditional telecommunications
What type resource is intellectual property - ✔✔intangible
What us IP - ✔✔involves creations of the human intellect, inventions, designs, artistic works
Why is IP important? - ✔✔1. directly related to innovation and creative works
2. It is a property that defines inventors/companies ownership over the innovative output they
have
3. Increases barriers for competitors to freely imitate an inventors output
What are the 4 types of IP - ✔✔1. Patents
2. Copyright
ANSWERS (VERIFIED AND WELL DETAILED
ANSWERS) LATEST UPDATE 2024/2025
What dies the industry life cycle explain? - ✔✔The innovation process and the affects of the
evolvement of an industry
What are the 5 stages of the industry life cycle? - ✔✔1. Introduction
2. Growth
3. Shakeout
4. Maturity
5. Decline
Characteristics of Introduction stage (ILC) - ✔✔1. launch of successful innovation
2. Only a few firms in the industry
3. demand is limited due to lack of knowledge
4. Excessive costs
5. Entry barriers are high due to limited demand and high production costs
Characteristics of growth stage (ILC) - ✔✔1. Innovation has gained market acceptance
2. Increased demand due to value recognition
3.Low competition because it takes time to enter the market
4. economies of scale is reached
5. Industry standards established
Characteristics of shakeout stage (ILC) - ✔✔1. stage when growth rate of demand starts to
decline and increased entrants enter
,2. Weaker firms are acquired or exit
3. Winners are large and enjoy economies of scale
Characteristics of maturity stage (ILC) - ✔✔1. Demand stabilizes
2. Few firms with large market share
3. Demand growth rate = 0
Examples: Airliners
Characteristics of decline stage (ILC) - ✔✔1. Demand declines
What four options do firms have when in a declining industry? - ✔✔Exit: Thorough
bankruptcy or liquidation
Harvest: reduce investment and maximize cash flow
Maintain: Continue to support marketing activities
Consolidate: buy rivals, aim for monopoly
What are the benefits of being a first mover in the ILC? - ✔✔1. limited competition
2. growing customer demand
3. Set standard
4. Establish significant brand loyalty
what are the disadvantages of being a first mover in the ILC? - ✔✔1. Pioneering Costs- later
entrants free ride on frist movers, R&D costs, Customer education, Uncertainty of customer
demand
What are the two ways of characterizing an innovation? - ✔✔Tech: Whether an innovation is
based on a new or existing tech
Market: Whether an innovation is introduced into a new or an existing market?
, Incremental innovation - ✔✔existing tech to meet existing demand
Example: Coca-cola updating marketing
Radical innovation - ✔✔uses new tech to meet new demand
-Example: Introduction of the internet
Architectural innovation - ✔✔Leverages existing technology into new markets
Alters the architecture of a product
A new product, with known components, used in a novel way
Ex: Existing cellphone tech to supply new communication services
Disruptive innovation - ✔✔Introduction of new tech into existing markets
ex: Chat bots vs traditional telecommunications
What type resource is intellectual property - ✔✔intangible
What us IP - ✔✔involves creations of the human intellect, inventions, designs, artistic works
Why is IP important? - ✔✔1. directly related to innovation and creative works
2. It is a property that defines inventors/companies ownership over the innovative output they
have
3. Increases barriers for competitors to freely imitate an inventors output
What are the 4 types of IP - ✔✔1. Patents
2. Copyright
