Quote:
1. The passage provides information in support of which of the following assertions?
A. The downsides of ignoring to invest in a new technology often outweigh the money savings associated with the same.
B. A company that ignores a disruptive technology may find itself on the brink of bankruptcy as the technology improves.
C. Most technologies that initially offer inferior solutions to an existing problem improve to an extent that they exceed the performance required.
D. Disruptive innovators are always successful in driving the incumbents out of the market.
E. None of the companies who produced the 8 inch drives were able to survive once the performance of the 5.25 inch drive improved considerably.
As per the passage
option B is most fitting.
Option A mentions downside of ignoring to invest outweighs the money savings associated with it. This is too generic and its not necessary all the time. In some cases maybe, but this can't be said in all cases. This has not been implied in the passage.
Eliminate A.
In option C -
Most technologies that initially offer inferior solutions to an existing problem improve to an extent that they exceed the performance required.
We are not told that most technologies improve to an extent that they exceed the performance required. The word most is used incorrectly. Eliminate C.
In option D- Disruptive innovators are
always successful in driving the incumbents out of the market.
Again, we can't say this happens always. Eliminate D.
In option E-
None of the companies who produced the 8 inch drives were able to survive once the performance of the 5.25 inch drive improved considerably.
We are not given any information about this in the passage. Eliminate E.
Coming to option B, which is the right answer,
A company that ignores a disruptive technology
may find itself on the brink of bankruptcy as the technology improves.
Yes, the examples that the passage provides imply that a company that ignores a disruptive technology
may find itself on the brink of bankruptcy.
Quote:
2. The author of the passage would make which of the following recommendations to the managers of the incumbents.
A. Before rejecting a technology that performs poorly when compared to an existing technology, the managers should carefully evaluate whether the technology can improve to a point to be disruptive.
B. They should only invest in new technologies that have the potential to disrupt their business model and throw them out of business.
C. They should take into account the long term shareholder returns before rejecting any new technology.
D. They should always be wary of start-ups in their industry as they have a potential to disrupt the incumbent’s operating business model.
E. Before investing huge sums of money in in-house Research and Development, they should evaluate technologies that have the potential to disrupt the enhancements produced by the R&D teams.
Following the process of elimination :
A. Before rejecting a technology that performs poorly when compared to an existing technology, the managers should carefully evaluate whether the technology can improve to a point to be disruptive.
Yes, I feel this makes sense as managers should evaluate whether the technology can grow to a point to affect the business. And this is the
correct answer!
B. They should
only invest in new technologies that have the potential to disrupt their business model and throw them out of business.
The word only is misleading. This has not been implied int he passage. We can safely eliminate B.
C. They should take into account the long term shareholder returns before rejecting any new technology.
This is not true, because the technology might not perform well currently but it might improve in the future. This depends from tech to tech and whether they will be able to improve the technology.
Eliminate C.
D. They should always be wary of start-ups in their industry as they have a potential to disrupt the incumbent’s operating business model.
The managers might not be aware of the start-ups in the industry that may have a potential to disrupt the business model. Eliminate D.
E. Before investing huge sums of money in in-house Research and Development, they should evaluate technologies that have the potential to disrupt the enhancements produced by the R&D teams.
This is not mentioned in the passage and is out of scope. Eliminate E.
Quote:
3. Which of the following exemplifies a technological disruption as described in the passage through the 8 inch and 5.25 inch disc drive example?
A. Personal computers that initially are extremely unreliable and require frequent service become so reliable that over 90% of the service people deployed to service the personal computers are let go.
B. Circuit city - a specialty electronics retail chain was bankrupted as general purpose retailers such as Walmart and Target started carrying electronics.
C. Apple takes over the casual computing marketing previously dominated by the netbook by introducing the iPad that provides a different level of experience over the general PC experience.
D. Mini mills, such as those operated by companies such as Nucor, that initially made lowest grade steel improve their quality to the extent that they are able to compete with large steel mills on quality while beating them on price.
E. DVDs and Blue Ray discs drive out the slightly cheaper VHS tapes as the tapes are not able to match the discs in terms of quality and convenience.
Now, we are looking for an answer choice which is similar to what happened to the 8 inch and 5.25 inch disc drives.
A can be easily eliminated because it does not concern a disruptive technology taking over by improving its technology. B also can be eliminated as it is not similar to what happened with the disc drives.
In C we are told the iPad takes over casual competing by providing a new level of experience, this is not an example of a disruptive tech, the iPad was launched to be superior to the other technologies. We can eliminate C.
In E as well, the VHS tapes are driven out because they could not match the discs in terms of quality and convenience. Eliminate E.
Now in option D, it is very similar to what happened with the discs - Mini mills improved their technologies to such an extent that they could compete with large steel mills. The quality was of same level plus prices were cheaper.
So
D is the clear winner.
Wow, that was one long post. Do press kudos if this helped