Chapter 7 (Part 1) PDF

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Chapter 7 Part 1...

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Chapter 7 Business Strategy: Innovation and Entrepreneurship This chapter discussed various aspects of innovation and entrepreneurship as a business-level strategy, as summarized by the following learning objectives and related take-away concepts. LO 7-1 / Outline the four-step innovation process from idea to imitation. ■ Innovation describes the discovery and development of new knowledge in a four-step process captured in the Four I’s: idea, invention, innovation, and imitation. ■ The innovation process begins with an idea. ■ An invention describes the transformation of an idea into a new product or process, or the modification and recombination of existing ones. ■ Innovation concerns the commercialization of an invention by entrepreneurs (within existing companies or new ventures). ■ If an innovation is successful in the marketplace, competitors will attempt to imitate it.

LO 7-3 / Describe the competitive implications of different stages in the industry life cycle. ■ Innovations frequently lead to the birth of new industries. ■ Industries generally follow a predictable industry life cycle, with five distinct stages: introduction, growth, shakeout, maturity, and decline. Exhibit 7.9 details features and strategic implications of the industry life cycle Key Terms (7.1) Invention (p. 213)

The transformation of an idea into a new product or process, or the modification and recombination of existing ones.

Patent (p. 213)

A form of intellectual property that gives the inventor exclusive rights to benefit from commercializing a technology for a specified time period in exchange for public disclosure of the underlying idea.

Trade Secret (p. 213)

Valuable proprietary information that is not in the public domain and where the firm makes every effort to maintain its secrecy.

Innovation (p. 214)

The commercialization of any new product or process, or the modification and recombination of existing ones.

First-move advantages (p. 214)

Competitive benefits that accrue to the successful innovator.

Key Terms (7.3) Industry life cycle (p. 217)

The five different stages—introduction, growth, shakeout, maturity, and decline— that occur in the evolution of an industry over time.

Network effects (p. 219)

The positive effect (externality) that one user of a product or service has on the value of that product for other users.

Standard (p. 220)

An agreed-upon solution about a common set of engineering features and design choices.

Product innovation (p. 221)

New or recombined knowledge embodied in new products.

Process innovation (p. 221)

New ways to produce existing products or deliver existing services.

Crossing-the-chasm framework (p. 225)

Conceptual model that shows how each stage of the industry life cycle is dominated by a different customer group....