Innovation and Entrepreneurship
Chapter Exam Questions
Course Introduction
Innovation and Entrepreneurship explores the principles and processes behind creating, evaluating, and launching new business ventures and innovative projects. The course examines how entrepreneurs identify opportunities, assess market potential, and develop innovative solutions to real-world problems. Students will learn about entrepreneurial thinking, business model development, resource acquisition, and the role of innovation in sustaining competitive advantage. Through case studies, project-based learning, and practical exercises, the course equips participants with the knowledge and skills necessary to turn creative ideas into viable and impactful enterprises in diverse business environments.
Recommended Textbook
Entrepreneurship Successfully Launching New Ventures 5th Edition by Bruce R. Barringer
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2
Chapter 1: Introduction to Entrepreneurship
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Sample Questions
Q1) The entrepreneurial process consists of four steps: deciding to become an entrepreneur, developing successful business ideas, moving from an idea to an entrepreneurial firm, and divesting or selling the entrepreneurial firm.
A)True
B)False
Answer: False
Q2) According to the textbook, entrepreneurship has historically had ________.
A) a major impact on the economy and minor impact on society
B) a minor impact on both the economy and society
C) a major impact on society and minor impact on the economy
D) a major impact on both the economy and society
E) no impact on either the economy or society
Answer: D
Q3) Small businesses outperform their larger counterparts in terms of patent activity (issuance).
A)True
B)False
Answer: True
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3
Chapter 2: Recognizing Opportunities and Generating Ideas
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Sample Questions
Q1) ________ relationships are characterized by frequent interactions that form between coworkers, friends, and spouses.
A) Balanced
B) Weak-tie
C) Lateral-tie
D) Moderate-tie
E) Strong-tie
Answer: E
Q2) Clothing boutiques and specialty shops often start because there is a need for a particular product, but large retailers like Wal-Mart and Costco can't sell enough of the item to stock it on their shelves. If a clothing boutique started to sell designer clothes or clothing for hard-to-fit people because the clothing wasn't being offered by a larger retailer, the best way to describe how that idea was recognized is ________.
A) finding a gap in the marketplace
B) brainstorming
C) observing trends
D) solving a problem
E) talking to consumers
Answer: A
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Chapter 3: Feasibility Analysis
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Sample Questions
Q1) ________ feasibility analysis is an assessment of the overall appeal of the industry and market for the product or service being proposed.
A) Institutional
B) Financial
C) Organizational
D) Product/service
E) Industry/target market
Answer: E
Q2) For financial feasibility analysis, a very detailed and comprehensive financial analysis is required.
A)True
B)False
Answer: False
Q3) Quirky is a Web site that allows you to submit product ideas to a community that vets and provides feedback on the ideas.
A)True
B)False
Answer: True
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Chapter 4: Developing an Effective Business Model
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Sample Questions
Q1) Standard business models depict existing plans or recipes firms can use to determine how they will create, deliver, and capture value for their stakeholders.
A)True
B)False
Q2) ________ business models are ones that do not fit the profile of standard business models, and are impactful enough that they disrupt or change the way business is conducted in an industry or an important niche within an industry.
A) Disruptive
B) Normal
C) Unique
D) Incomparable
E) Exceptional
Q3) Describe the Barringer/Ireland Business Model Template and discuss its purpose.
Q4) Briefly describe the four main components of the Barringer/Ireland Business Model Template. Identify the subcomponents of each the four main components of a business model.
Q5) Value-driven businesses focus on minimizing costs wherever possible.
A)True
B)False
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Chapter 5: Industry and Competitor Analysis
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Sample Questions
Q1) A(n) ________ industry is one that is characterized by a large number of firms of approximately equal size.
A) fragmented
B) mature
C) declining
D) emerging
E) global
Q2) According to the textbook, Nucor in steel, JetBlue in airlines, and Cirque du Soleil in circuses are examples of entrepreneurial firms who are exploiting opportunities in ________ industries.
A) fragmented
B) emerging
C) declining
D) global
E) mature
Q3) A firm's future competitors are its most important ones.
A)True
B)False
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Chapter 6: Writing a Business Plan
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Sample Questions
Q1) The two primary audiences for a firm's business plan are a firm's employees and investors and other external stakeholders.
A)True
B)False
Q2) A(n) ________ business plan, which is typically 25 to 35 pages long, works best for new ventures who are at the point where they need funding or financing.
A) tactical
B) strategic
C) summary
D) full
E) operational
Q3) A firm's operating leverage is an analysis of its debt versus its equity.
A)True
B)False
Q4) What is a business plan?
Q5) To make the best impression, a business plan should follow a conventional structure.
A)True
B)False
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Chapter 7: Preparing the Proper Ethical and Legal Foundation
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Q1) Which of the following is the most important thing that an entrepreneur, or team of entrepreneurs, can do to build a strong ethical culture in their organization?
A) Implement an ethics training program
B) Write a mission statement
C) Lead by example
D) Hire an ethics compliance officer
E) Write a code of conduct
Q2) Steven Diaz just took a job with Harley Davidson. As part of his employment agreement, Harley Davidson required Steven to sign an agreement, which states that if he leaves Harley Davidson, he will not work for a firm that competes against Harley Davidson for at least two years. The agreement that Steven signed is called a ________ agreement.
A) nondisclosure
B) nonparticipate
C) nonchallenge
D) noncompete
E) noncontend
Q3) What is a founders' agreement? Describe the purpose of a buyback clause and why it's important?
Page 9
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Chapter 8: Assessing a New Venture's Financial Strength and Viability
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Q1) Which financial statement records all of a firm's revenues and expenses for a given period and shows whether the firm is making a profit or experiencing a loss?
A) Balance sheet
B) Owner's equity statement
C) Statement of cash flows
D) Forecast
E) Income statement
Q2) Cash plus items that are readily convertible to cash, such as accounts receivable, marketable securities, and inventories are classified as ________ assets on a firm's balance sheet.
A) other
B) intermediate term
C) temporary
D) current
E) fixed
Q3) Stability is a company's ability to meet its short-term financial obligations.
A)True
B)False
Q4) What is ratio analysis? Why is it important?
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Chapter 9: Building a New-Venture Team
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Q1) Founding teams that have worked together before, as opposed to teams that are working together for the first time, have an edge.
A)True
B)False
Q2) Describe the term "liability of newness" and suggest several ways that a new venture can overcome this handicap.
Q3) Which of the following statements is not true regarding the attributes of the founder(s) of a firm?
A) Evidence suggests that important entrepreneurial skills are enhanced through higher education.
B) Founders with prior entrepreneurial experience are more likely to avoid costly mistakes.
C) Founders with experience in the same industry as their new ventures will typically have "blinders" on and are typically not as effective as founders new to the industry.
D) Founders with broad social and professional networks have an advantage.
E) New ventures that are started by a team rather than an individual have an advantage.
Q4) What is a skills profile and what is it used for?
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Chapter 10: Getting Financing or Funding
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Q1) Most business angels remain fairly anonymous and are matched up with entrepreneurs through referrals.
A)True
B)False
Q2) Once a venture capitalist makes an investment in a firm, subsequent investments are made in rounds and are referred to as ________.
A) later funding
B) successive funding
C) subsequent backing
D) follow-on funding
E) ensuing backing
Q3) ________ are limited partnerships of money managers who raise money in "funds" to invest in startups and growing firms.
A) Venture capital firms
B) Business angels
C) Institutional investors
D) Investment bankers
E) Business capitalists
Q4) What is an elevator speech? How did it get its name?
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Chapter 11: Unique Marketing Issues
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Q1) "Brand premium" is the term that denotes the set of assets and liabilities that are linked to a brand and enable it to raise a firm's valuation.
A)True
B)False
Q2) The Google program called ________ allows advertisers to buy keywords on the Google Home Page.
A) AdSense
B) Adcenter
C) AdWords
D) Search Marketing
E) AdGoogle
Q3) An important distinction should be made between a firm's core product and its actual product. While the core product may be a CD that contains an antivirus software program, the actual product may have a number of characteristics, including a quality level, features, design, a brand name, and packaging.
A)True
B)False
Q4) What is a brand? How does a new firm develop a brand?
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Page 13
Chapter 12: The Importance of Intellectual Property
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Q1) While stealing trade secrets is widely considered to be unethical, it is not a criminal offense.
A)True
B)False
Q2) There are three basic requirements for a patent to be granted. The subject of the patent application must be ________.
A) useful, difficult to copy, and novel in relation to prior arts in the field
B) based on cutting edge science or technology, not obvious to a person of ordinary skill in the field, and rare
C) useful, novel in relation to prior arts in the field, and not obvious to a person of ordinary skill in the field
D) rare, difficult to copy, and not obvious to a person of ordinary skill in the field
E) useful, scientific, and novel in relation to prior arts in the field
Q3) What is a trademark? Why are trademarks important?
Q4) What is intellectual property? Why is it called "intellectual" property? Why is intellectual property such an important issue for entrepreneurial firms?
Q5) What is a copyright? What is protected by a copyright?
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Page 14
Chapter 13: Preparing for and Evaluating the Challenges of Growth
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Q1) ________ costs are costs that a company incurs whether it sells something or not.
A) Fixed
B) Consistent
C) Steady
D) Variable
E) Regular
Q2) Sometimes firms are compelled to grow to accommodate the growth of a key customer.
A)True
B)False
Q3) Adverse selection means that as a firm grows and adds personnel, the new hires typically do not have the same ownership incentives as the original founders, so the new hires may not be as motivated as the founders to put in long hours or may even try to avoid hard work.
A)True
B)False
Q4) Fixed costs are the costs a company incurs as it generates sales.
A)True
B)False
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Chapter 14: Strategies for Firm Growth
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Q1) Pam Ryan owns a store that sells running shoes and related products. Pam is currently trying to increase sales through endorsements by famous runners and former Olympic athletes. Pam is pursuing a(n) ________ strategy.
A) strategic alliance
B) licensing
C) market penetration
D) geographic expansion
E) improving an existing product or service
Q2) ________ growth strategies rely on establishing relationships with third parties, such as mergers, acquisitions, strategic alliances, joint ventures, licensing, and franchising.
A) Internal
B) Domestic
C) Outside
D) External
E) Peripheral
Q3) Describe the internal growth strategy of new product development. Why is it a competitive necessity in some industries that entrepreneurial firms focus on this form of growth?
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Page 16
Chapter 15: Franchising
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Q1) Which of the following was not identified in the textbook as one of the disadvantages of franchising a business?
A) Loss of control
B) Friction with franchisees
C) Franchisee motivation
D) Differences in required business skills
E) Legal expenses
Q2) According to our textbook, which of the following is not a quality to look for in prospective franchisees?
A) Individual, rather than team-oriented
B) Ability to follow instructions
C) Experience in the industry in which the franchisee operates
D) Ability to operate with minimal supervision
E) Adequate financial resources and a good credit history
Q3) An individual who is team oriented and has experience in the industry in which the franchise competes is a good candidate to be a franchisee.
A)True
B)False
Q4) List and explain three of the common misconceptions about franchising.
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