MEM Technology & Innovation Management 3 — Questions and Answers
Question 1: A 'patent thicket' in technology management refers to:
- A portfolio of patents held exclusively by startups
- An overlapping web of patents that makes it difficult for firms to commercialize new technology without licensing many rights (Correct answer)
- A government program to fast-track patent approvals
- A classification system for ranking patent quality
Correct answer: An overlapping web of patents that makes it difficult for firms to commercialize new technology without licensing many rights
Patent thickets create barriers to market entry by requiring innovators to navigate numerous overlapping IP rights held by multiple parties.
Question 2: According to the Utterback-Abernathy model, during the 'fluid phase' of an industry's evolution:
- Process innovation dominates and product design is fixed
- There is high product innovation with many competing designs (Correct answer)
- Prices are set by the dominant firm
- Manufacturing efficiency is the primary competitive dimension
Correct answer: There is high product innovation with many competing designs
The fluid phase features high uncertainty, many competing product designs, and experimentation before a dominant design emerges.
Question 3: Which of the following best describes a 'platform ecosystem' in innovation management?
- A single company that builds all components of a product internally
- A core technology or standard that enables third-party complementors to build products and services around it (Correct answer)
- An internal corporate incubator for new ventures
- A government-funded R&D consortium
Correct answer: A core technology or standard that enables third-party complementors to build products and services around it
Platform ecosystems (e.g., iOS, Android) provide a foundation that third-party developers and complementors use to create additional value.
Question 4: A company uses a '70-20-10' innovation budget allocation. What does the '10' typically represent?
- Sustaining improvements to existing products
- Adjacent innovations that expand into new markets
- Transformational or breakthrough innovations (Correct answer)
- Marketing expenses for new launches
Correct answer: Transformational or breakthrough innovations
The 10% allocation targets transformational, high-risk bets on entirely new markets or business models with long time horizons.
Question 5: What is the primary purpose of a 'stage-gate' process in new product development?
- To increase R&D spending at every phase
- To provide structured review points where projects are evaluated and either advanced, revised, or killed (Correct answer)
- To assign patent rights at each development stage
- To automate software releases in a CI/CD pipeline
Correct answer: To provide structured review points where projects are evaluated and either advanced, revised, or killed
Stage-gate (Cooper) creates decision checkpoints between phases, ensuring resources are allocated only to projects with sufficient technical and commercial merit.
Question 6: The concept of 'coopetition' in technology industries refers to:
- Competing solely on price to eliminate rivals
- Simultaneous cooperation and competition between firms, often around shared standards (Correct answer)
- A government-mandated partnership for public R&D
- Outsourcing all R&D to competitors
Correct answer: Simultaneous cooperation and competition between firms, often around shared standards
Coopetition (Brandenburger & Nalebuff) captures how rivals can cooperate on standards or platforms while still competing on differentiated products.
Question 7: When evaluating technology investments, the 'real options' approach is preferred over simple NPV because it:
- Ignores uncertainty to simplify calculations
- Captures the value of managerial flexibility to delay, expand, or abandon projects as uncertainty resolves (Correct answer)
- Applies only to financial derivatives, not R&D
- Guarantees a positive return on investment
Correct answer: Captures the value of managerial flexibility to delay, expand, or abandon projects as uncertainty resolves
Real options analysis treats investment flexibility (expand, defer, abandon) as having economic value, which static NPV fails to capture under high uncertainty.
MEM Technology & Innovation Management 3
A 'patent thicket' in technology management refers to: