Innovation and Entrepreneurship
Exam Answer Key
Course Introduction
This course explores the principles and practices of innovation and entrepreneurship, highlighting the process of transforming creative ideas into viable business ventures. Students will examine the role of entrepreneurs in the economy, identify opportunities in dynamic markets, and develop essential skills such as opportunity recognition, business model development, resource acquisition, and risk assessment. The course combines theoretical frameworks with real-world case studies and experiential learning activities, preparing students to launch and manage innovative start-ups or drive entrepreneurial thinking within established organizations.
Recommended Textbook
Strategic Management of Technological Innovation 3rd Edition by Melissa A. Schilling
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13 Chapters
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647 Flashcards
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Chapter 1: Introduction
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Sample Questions
Q1) Explain how the globalization of markets affects the importance of innovation. Answer: As markets become more global,increased competition from foreign competitors puts pressure on firms to innovate.Domestic companies may need to come up with more efficient means of production,and will also tend to compete through innovation to differentiate their goods and services.As communication increases through the internet and global media,consumers will have more choices in making purchase decisions.Competition will become fiercer and companies will need to find a competitive advantage through innovative processes and products.
Q2) Slow innovation results in diminishing margins and product obsolescence.
A)True
B)False
Answer: True
Q3) Technology in its purest form is not knowledge,but rather faith that things will get better.
A)True
B)False Answer: False
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Chapter 2: Sources of Innovation
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Sample Questions
Q1) According to studies,which of the following tends to be true of prolific inventors?
A) Inventors tend to have specialized almost solely in one field.
B) Inventors tend to be curious, and question the assumptions made in a field.
C) Inventors typically patent and commercialize most of their inventions.
D) Inventors tend to interact socially and seek local solutions to problems.
Answer: B
Q2) Which of the following would be considered true about an agglomeration economy?
A) Helps enhance proximity in knowledge exchange.
B) Helps firms understand the drivers and benefits of clustering for developing a strategy.
C) Helps overcome the market failure that can result when a new technology has the potential for important societal benefits.
D) Helps firms reap benefits by locating them in close geographical proximity to each other.
Answer: D
Q3) Innovation often originates with those who create solutions for their own needs.
A)True
B)False
Answer: True
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Page 4
Chapter 3: Types and Patterns of Innovation
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Sample Questions
Q1) The Ajax Computer Company is spending heavily on R&D to develop new designs for wireless networks instead of trying to refine how well they make their current wireless network hardware components.Ajax is probably in the
A) decline stage.
B) era of incremental change.
C) era of ferment.
D) specific phase.
Answer: C
Q2) The first phase in the technology cycle is involves incremental improvements until one company finds a major breakthrough.
A)True
B)False
Answer: False
Q3) Managers can almost always use the S-curve model to effectively plan their technology investment decisions.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Standards Battles and Design Dominance
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Sample Questions
Q1) Producers can influence users' expectations of the future installed base and availability of complements
A) by providing trial offers.
B) through announcements of preorders.
C) by offering product discounts.
D) by offering freebies.
Q2) Explain why it is considered advantageous if a company's technology is adopted by users ahead of other technologies.
Q3) The ability of an organization to recognize,assimilate,and utilize new knowledge is referred to as its learning curve.
A)True
B)False
Q4) When are winner-take-all markets good for consumers?
A) When monopoly costs exceed the value of technological utility and network externality benefits.
B) When monopoly costs exceed the value of technological utility.
C) When the value of technology utility exceeds monopoly costs.
D) When the value of technology utility and network externality benefits exceeds monopoly costs.
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Chapter 5: Timing of Entry Part Two Formulating
Technological Innovation Strategy
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Sample Questions
Q1) Once buyers have adopted a good,they can easily switch to another good.
A)True
B)False
Q2) In the past,Apex Systems had successfully released 10 new products in the shoe gliding market.Today it is recognized as the market leader.It has just released a new shoe glider called SmoothShoe.How difficult will it be for Apex to get distributors to take on this new product?
A) Very difficult because they will be reluctant to carry so many products of the same company.
B) Somewhat difficult because it will just cannibalize current products.
C) Not very difficult because they will trust in Apex's past record.
D) Cannot be determined.
Q3) When McDonalds first moved into Russia,it had to teach farmers how to grow better potatoes and cattle,and bakers how to make hamburger buns.This is an example of A) corporate social responsibility.
B) an undeveloped supply channel.
C) development partnerships.
D) late-mover manipulation.
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Chapter 6: Defining the Organizations Strategic Direction
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Sample Questions
Q1) Other things being equal,the more suppliers there are providing similar supplies to a particular industry,
A) the less powerful those suppliers will be.
B) the more powerful those suppliers will be.
C) the more competitors there will be in the industry.
D) the less powerful buyers will be.
Q2) Go Systems set a goal to double its corporate value in seven years.This is a goal from the_____ perspective of the balanced scorecard.
A) operational
B) financial
C) technical
D) internal
Q3) In Canada,the wireless market is dominated by three main players-Rogers Wireless,Bell Mobility,and Telus.This is an example of an oligopolistic industry.
A)True
B)False
Q4) Ammunition can be considered a complement for the companies who make firearms.
A)True
B)False
Page 8
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Chapter 7: Choosing Innovation Projects
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Q1) When Media Enterprises was faced with 5 different options for its research and development efforts,it looked at its budget and then ranked the projects to be funded.This is what is known as research rationing.
A)True
B)False
Q2) The time required to break even on a project using discounted cash flows is known as period of return.
A)True
B)False
Q3) Fred Stanley,a retired millionaire,invests in startup business projects that are under $1 million.Fred is an angel investor.
A)True
B)False
Q4) Fredricks Technologies made the strategic decision to invest heavily in the development of derivative projects.This is likely to make its returns on R&D look good in the short run only.
A)True
B)False
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Page 9
Chapter 8: Collaboration Strategies
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Sample Questions
Q1) In 1983,Niraldy Systems and Obermeir Products wanted to collaborate on research but could not.In 1985 they entered into a collaborative research arrangement.What change made this possible?
A) Passage of the National Cooperative Research act (NCRA) of 1984
B) Repeal of the Sherman Anti-Trust Act in 1984
C) A Supreme Court Decision of Niraldy versus the United States
D) The Open Mobile Architecture Act of 1984
Q2) Glory Cosmetics wants to sell its products on the West Coast,but does not have either the manufacturing facility or the labor force to meet the increase in demand.It also is worried that building such a big facility could impose a lot of risk on the firm if it turns out that the products are not successful on the West Coast.Glory should probably A) outsource production by using contract manufacturing.
B) slightly decrease the quality of the product and use the money saved to hire new workers for a second shift.
C) use its credit cards to meet the first couple of payrolls of newly hired workers and then when profits come in from increased sales, pay off the credit cards.
D) seek a small business development loan from the local bank.
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Chapter 9: Protecting Innovation
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Sample Questions
Q1) It is not legal for you to sell copies of your own original songs with a label that indicates the songs are by Madonna because
A) that would be a patent violation.
B) that would be a trademark violation.
C) that would be a copyright violation.
D) that would be a trade secret violation.
Q2) Kendra wrote a computer program containing software algorithms that can predict the success of a movie before it has been released.Is this patentable?
A) No, but she can get a copyright on it.
B) Yes, since a Supreme Court ruling in 1998 upheld a patent on software algorithms.
C) No, but she can trademark it.
D) No, she should seek trade secret protection.
Q3) Your friend states that the enforcement of copyright law in the music industry is bad for consumers because it prevents them from being able to access,download,and trade music freely.How might you attempt to explain the benefits to consumers of copyright protection of music?
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Chapter 10: Organizing for Innovation
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Q1) If Jasper Electronics decentralizes its R&D by divisions,it will most likely
A) achieve greater economies of scale.
B) eliminate the duplication of efforts.
C) benefit more from the learning curve.
D) result in development projects that take advantage of the diversity of knowledge and market contacts that may exist in different divisions.
Q2) The Peedle Chocolate Company is headquartered in Belgium.In the United States,it uses manufacturing techniques from France and marketing techniques from Great Britain.It seems to be using the locally leveraged R&D strategy.
A)True
B)False
Q3) According to the _____,if Frankie's Chicken Shack excels in cooking and selling chicken,this ability could lead to its downfall if it does not embrace new technology because it may become overconfident,careless,or slow to change.
A) law of diminishing returns
B) principle of disaggregation
C) Icarus Paradox
D) research of Porter
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Chapter 11: Managing the New Product Development Process
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Q1) The R&D engineers are often the ones most able to identify the maximum performance capabilities and minimum service requirements of a new product.
A)True
B)False
Q2) One way to reduce direct labor and material handling cost is to minimize the number of parts for a product.
A)True
B)False
Q3) Project champions are more likely to be from marketing.
A)True
B)False
Q4) A lead user for a product will often give you an earlier and more accurate idea of whether a new product will be successful in the marketplace compared to other customers.
A)True
B)False
Q5) Explain the value of the stage-gate process of new product development.
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Chapter 12: Managing New Product Development Teams
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Q1) The purpose of the contract book is to gain commitment to and ownership of the new product development from team members.
A)True
B)False
Q2) In a functional team approach to new product development,team members remain in their functional departments and meet periodically to work on the project.
A)True
B)False
Q3) Karen is a member of a new product development team.She still reports to her manager,the marketing director,but spends about 25 percent of her time on the project.Her team has a project manager.This sounds like a(n)_____ team.
A) functional
B) lightweight
C) heavyweight
D) autonomous
Q4) Autonomous teams usually undertake derivative projects.
A)True
B)False
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Page 14
Chapter 13: Crafting a Deployment Strategy Index
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Q1) If you are seeking to become the dominant design of a new technology,then penetration pricing will not work.
A)True
B)False
Q2) When Sports Paradise saw yet another sports bar open up across the street it knew that it would have to lower its price again to stay in business.The city already had too many sports bars and Sports Paradise intended on being one of those left after the inevitable shake out.Sports Paradise will be following a _____ pricing strategy.
A) penetration
B) skimming
C) survival
D) predatory
Q3) When a company asks another firm to develop a complementary good,one incentive that is often used is a guarantee that specific quantities of that complimentary good will be sold.
A)True
B)False
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