MIB Master of International Business: Global Management of Innovation & Knowledge 4 — Questions and Answers
Question 1: A firm pursues a 'blue ocean strategy' in international markets. What is the core principle?
- Competing aggressively on price in existing markets
- Creating uncontested market space by making competition irrelevant (Correct answer)
- Focusing all resources on the home market
- Copying the leading competitor's strategy with minor modifications
Correct answer: Creating uncontested market space by making competition irrelevant
Blue Ocean Strategy (Kim & Mauborgne) advocates creating new demand in uncontested market spaces rather than competing in overcrowded 'red ocean' industries.
Question 2: Which governance mechanism is most effective for protecting knowledge shared in a strategic alliance when legal IP protection is weak?
- Equity stakes and joint ownership structures (Correct answer)
- Verbal agreements between managers
- Relying solely on trade secret law
- Publishing all shared knowledge openly
Correct answer: Equity stakes and joint ownership structures
Equity stakes align partner incentives and create mutual dependence, reducing the risk of opportunistic knowledge appropriation when contractual enforcement is unreliable.
Question 3: What is 'reverse innovation' as practiced by companies like GE and Siemens?
- Replacing digital processes with manual ones
- Developing low-cost innovations in emerging markets and then selling them in developed markets (Correct answer)
- Acquiring failing startups and reversing their losses
- Moving R&D labs from developed to developing countries without changing products
Correct answer: Developing low-cost innovations in emerging markets and then selling them in developed markets
Reverse innovation involves creating products for emerging market constraints (cost, infrastructure) that prove so effective they disrupt premium segments in developed markets.
Question 4: In global knowledge management, 'stickiness' refers to:
- Customer loyalty metrics in digital platforms
- The difficulty of transferring knowledge from one context to another (Correct answer)
- The retention rate of high-performing employees
- Data encryption strength in cloud systems
Correct answer: The difficulty of transferring knowledge from one context to another
Knowledge stickiness (von Hippel) describes how costly and difficult it is to move knowledge across organizational, cultural, or geographic boundaries.
Question 5: A technology firm allocates 70% of its innovation budget to improving existing products and 30% to exploring radically new markets. This reflects which innovation portfolio principle?
- Disruptive innovation theory
- The 70-20-10 innovation rule (Correct answer)
- Schumpeter's creative destruction
- The innovation funnel approach
Correct answer: The 70-20-10 innovation rule
The 70-20-10 rule (popularized by Google) allocates most resources to core innovation, some to adjacent opportunities, and a small fraction to transformational bets.
Question 6: Which of the following best describes 'epistemic communities' in the context of international innovation?
- Government regulatory bodies overseeing R&D spending
- Networks of knowledge-based experts who share beliefs and causal understandings influencing policy (Correct answer)
- University departments focused on theoretical research
- Corporate legal teams managing patent portfolios
Correct answer: Networks of knowledge-based experts who share beliefs and causal understandings influencing policy
Epistemic communities are transnational networks of professionals with shared normative and causal beliefs who influence international policy and diffuse innovative ideas across borders.
Question 7: A multinational establishes an R&D lab in Israel primarily because of the country's strong cybersecurity talent pool. This is an example of:
- Efficiency-seeking investment
- Asset-augmenting FDI (Correct answer)
- Market-seeking investment
- Resource-seeking investment in natural assets
Correct answer: Asset-augmenting FDI
Asset-augmenting FDI aims to access and build upon the host country's specialized knowledge assets, such as skilled labor or research infrastructure, rather than exploiting existing firm advantages.
MIB Master of International Business: Global Management of Innovation & Knowledge 4
A firm pursues a 'blue ocean strategy' in international markets.
What is the core principle?