MEM Technology & Innovation Management 4 — Questions and Answers
Question 1: Which of the following is a key characteristic of 'architectural innovation' as defined by Henderson and Clark?
- Improves the performance of established components with no change in overall system design
- Reconfigures an established system's linkages while the core components may remain unchanged (Correct answer)
- Involves only incremental improvements to existing products
- Requires entirely new core technologies and component designs
Correct answer: Reconfigures an established system's linkages while the core components may remain unchanged
Architectural innovation changes how components are integrated and linked, often undermining incumbents who have optimized around the old architecture.
Question 2: A 'crossing the chasm' strategy for high-tech products recommends that firms initially target:
- The mass market to maximize volume
- A narrow, specific beachhead segment to gain a foothold before scaling (Correct answer)
- Late majority adopters who are price-sensitive
- Early adopters without a clear value proposition
Correct answer: A narrow, specific beachhead segment to gain a foothold before scaling
Moore's 'Crossing the Chasm' advises targeting a specific vertical niche (beachhead) to generate references and cash flow needed to enter mainstream markets.
Question 3: In technology portfolio management, what does the 'emerging' quadrant typically signal in a technology map?
- Mature technologies ready for divestment
- High-impact technologies still in early stages requiring monitoring and selective investment (Correct answer)
- Technologies with low potential but high current profitability
- Fully commercialized platforms needing maintenance only
Correct answer: High-impact technologies still in early stages requiring monitoring and selective investment
Emerging technologies show high future potential but low current maturity, warranting exploratory investment and monitoring rather than full commitment.
Question 4: Frugal innovation (also called 'jugaad') primarily aims to:
- Create ultra-premium products with maximal features
- Develop good-enough products at dramatically lower cost to serve price-sensitive or resource-constrained markets (Correct answer)
- Copy competitor products without R&D investment
- Reduce innovation timelines using advanced automation only
Correct answer: Develop good-enough products at dramatically lower cost to serve price-sensitive or resource-constrained markets
Frugal innovation strips away non-essential features to create affordable, robust solutions suitable for emerging markets or cost-conscious customers.
Question 5: In a technology licensing negotiation, the term 'royalty stacking' describes a problem where:
- A licensee pays multiple royalties to different patent holders for a single product, raising total costs significantly (Correct answer)
- A licensor stacks multiple products in one licensing bundle
- Royalties compound annually due to inflation adjustments
- A firm pays double royalties for exclusive rights
Correct answer: A licensee pays multiple royalties to different patent holders for a single product, raising total costs significantly
Royalty stacking occurs when a product infringes multiple separate patents, requiring royalty payments to each holder, which can make commercialization economically unviable.
Question 6: Which R&D metric is most directly aligned with measuring innovation output rather than innovation input?
- R&D expenditure as a percentage of revenue
- Number of new products launched per year (Correct answer)
- Number of R&D employees
- R&D budget growth rate
Correct answer: Number of new products launched per year
New products launched measures output (results of innovation activity), while R&D spend, headcount, and budget growth are all input metrics.
Question 7: The 'innovator's dilemma' most directly explains why large incumbents fail to adopt disruptive technologies because:
- They lack technical talent to understand new technologies
- Rational resource allocation to their best current customers makes them ignore low-margin emerging markets (Correct answer)
- Government regulations prevent incumbents from pivoting
- Disruptive technologies are always patented by startups first
Correct answer: Rational resource allocation to their best current customers makes them ignore low-margin emerging markets
Christensen showed that incumbents rationally invest in sustaining innovations for profitable customers, leaving disruptive low-end markets open for new entrants.
MEM Technology & Innovation Management 4
Which of the following is a key characteristic of 'architectural innovation' as defined by Henderson and Clark?