If a Company Such as Volvo Adds the All-Wheel-Drive Technology

question 26

Multiple Choice

If a company such as Volvo adds the all-wheel-drive technology to one of its car lines to exploit a growing market for luxury cars,while maintaining its position in the established markets,we can infer that the company follows the _____ strategic type.

• A)high-cost prospector
• B)differentiated analyzer
• C)low-cost prospector
• D)differentiated endorser

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Definitions:

Imitation Problem

The potential for a firm’s rivals to produce a close variation of (imitate) a firm’s new product or process, greatly reducing the originator’s profit from R&D and innovation.

Innovation Diffusion

The process by which new ideas, practices, or technologies spread within a population or society, influencing patterns of adoption and utilization.

Patents

Patents are legal documents granted by the government that give inventors exclusive rights to their innovations for a specific period, preventing others from making, using, or selling the invention without permission.

Expected-Rate-of-Return Curve

A graphical representation showing the expected return of different portfolios or investments as a function of their risk.