SPP Innovation & Growth Strategy 4

Question 1

A company shifts from selling a product outright to charging customers a recurring subscription fee. This is an example of which type of innovation?

Accepted Answer

Business model innovation

Answer

Business model innovation changes how a company creates, delivers, or captures value—subscription pricing alters the revenue model without necessarily changing the product itself.

Question 2

Which strategic analysis tool maps a company's unique activities to show how they create a defensible competitive position through interdependencies?

Accepted Answer

Activity system map

Answer

Porter's activity system map visualizes how a firm's unique set of interlocking activities reinforce each other, making the strategy difficult for competitors to replicate.

Question 3

In the context of technology S-curves, what typically signals that a technology is approaching its performance limit?

Accepted Answer

Increasing R&D spending with diminishing performance gains

Answer

As a technology matures, more R&D investment produces progressively smaller performance improvements—a sign the S-curve is flattening and a new paradigm may be needed.

Question 4

Which growth lever involves partnering with external companies to co-develop products, share distribution, or access complementary capabilities?

Accepted Answer

Strategic alliance or partnership

Answer

Strategic alliances allow firms to grow by combining complementary strengths without the full cost and risk of mergers and acquisitions.

Question 5

A company discovers that its core product is being used in an unexpected way by a small group of customers, revealing a potential new market. This is best described as:

Accepted Answer

Lead user insight

Answer

Lead users—identified by Eric von Hippel—face needs ahead of the general market and often innovate solutions themselves, signaling nascent market opportunities.

(SPP) Strategic Planning Professional Practice Test

(SPP) Strategic Planning Professional Practice Test

SPP Innovation & Growth Strategy 4