Innovation and Entrepreneurship Exam Practice
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Course Introduction
Innovation and Entrepreneurship explores the processes, strategies, and mindsets necessary to develop innovative products, services, and ventures in dynamic environments. The course examines how individuals and organizations generate creative ideas, assess market opportunities, build business models, and navigate the challenges of launching and sustaining new enterprises. Through case studies, practical exercises, and design thinking approaches, students will develop skills in problem-solving, resource management, and entrepreneurial leadership, preparing them to drive innovation within startups, corporations, or their own ventures.
Recommended Textbook
Entrepreneurship Successfully Launching New Ventures 3rd Edition by Bruce R. Barringer
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15 Chapters
1125 Verified Questions
1125 Flashcards
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Page 2
Chapter 1: Introduction to Entrepreneurship
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Sample Questions
Q1) According to reliable statistics, 9 out of 10 businesses fail in their first few years of existence.
A)True
B)False
Answer: False
Q2) Klimit, the company profiled in the opening feature for Chapter 1, plans to make money on the ski jackets and other apparel products that will use its proprietary technology by:
A) manufacturing the products and selling them via catalogues and the Internet
B) manufacturing the products and selling through large retailers like Gap and Old Navy
C) franchising
D) manufacturing the products and selling them through ski shops and other specialty stores
E) licensing its technology to outdoor gear and apparel companies
Answer: E
Q3) The most active age range for business ownership is 35 to 45 years old.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Recognizing Opportunities and Generating Ideas
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Sample Questions
Q1) According to the textbook, opportunities are:
A) tough to spot
B) easy to spot in the service sector but tough to spot in the manufacturing sector
C) easy to spot in the manufacturing sector but tough to spot in the service sector
D) easy to spot
E) neither easy nor tough to spot
Answer: A
Q2) A focus group is a gathering of 5 to 10 people who are selected because of their relationship to the issue being discussed.
A)True
B)False
Answer: True
Q3) Brainstorming is used to generate a number of ideas quickly.
A)True
B)False
Answer: True
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Page 4
Chapter 3: Feasibility Analysis
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Sample Questions
Q1) Which of the following is an incorrect approach to administering a concept test?
A) The concept statement shouldn't exceed one page.
B) After the concept statement is developed, it should be shown to at least 10 people.
C) The best candidates to distribute a concept statement to are family and friends.
D) If time permits, a concept statement should be used in a iterative manner and distributed to several groups of people.
E) A short survey should be attached to the concept statement to solicit feedback.
Answer: C
Q2) First Screen is a template for completing industry analysis
A)True
B)False
Answer: False
Q3) Primary research is research that is collected by the person or persons completing the analysis.
A)True
B)False
Answer: True
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Chapter 4: Writing a Business Plan
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Sample Questions
Q1) There are two primary audiences for a business plan:
A) a firm's employees and officials with the SEC
B) a firm's customers and its competitors
C) investors and other external stakeholders and public relations firms
D) officials with the SEC and public relations firms
E) a firm's employees and investors and other external stakeholders
Q2) According to the textbook, a business plan is best described as a:
A) narrative description of a new business
B) contract
C) budget
D) agreement
E) marketing initiative
Q3) To make the best impression, a business plan should follow an unconventional structure and stand out in some exceptional way.
A)True
B)False
Q4) A business plan is typically between 25 and 35 pages long.
A)True
B)False
Q5) What is a business plan?
Page 6
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Chapter 5: Industry and Competitor Analysis
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Sample Questions
Q1) A competitive analysis grid is a tool for organizing the information a firm collects about its competitors.
A)True
B)False
Q2) In the context of competitive analysis, ________ offer close substitutes to the product the firm completing the analysis sells.
A) potential competitors
B) direct competitors
C) indirect competitors
D) impending competitors
E) future competitors
Q3) A competitor analysis is a detailed evaluation of a firm's competitors.
A)True
B)False
Q4) A firm's indirect competitors are its most important ones.
A)True
B)False
Q5) What is competitive intelligence? What are some of the ways that a firm can ethically obtain information about its competitors?
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Chapter 6: Developing an Effective Business Model
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Sample Questions
Q1) Which of the following is a "support" activity in the value chain?
A) outbound logistics
B) service
C) marketing and sales
D) operations
E) human resource management
Q2) The Savvy Entrepreneurial Firm feature in Chapter 6 focuses on three business model innovators: SunEdison, Red Hat, and Cater Internal Medicine. What is SunEdison's business model innovation?
A) to build solar energy platforms in the ocean
B) Make solar energy a service rather than a product.
C) Sell solar energy equipment in "kits" that consumers can install themselves.
D) Create solar energy "farms" in rural areas and create a new category of "farmers."
E) Build large solar energy arrays on the outskirts of cities to provide for a sizeable portion of their energy needs.
Q3) What is meant by the statement, "A firm's business model takes it beyond its own boundaries?" Provide an example to illustrate your answer.
Q4) Describe the two potential fatal flaws of business models.
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Page 8
Chapter 7: Preparing the Proper Ethical and Legal Foundation
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Sample Questions
Q1) Which of the following is an advantage of a C Corporation?
A) Setting up and maintaining one is more difficult than for a sole proprietorship or a partnership.
B) Stock is liquid if traded on a major stock exchange.
C) Business losses cannot be deducted against the shareholders' other sources of income.
D) Income is subject to double taxation.
E) Small shareholders typically have little voice in the management of the firm.
Q2) The most compelling advantage of stock options is the potential rewards to participants when:
A) the stock splits
B) the stock price increases
C) the stock price more than triples
D) the stock is placed in a trust fund
E) the stock price decreases
Q3) List and briefly describe three specific steps that an entrepreneurial organization can take to build a strong ethical culture.
Q4) Describe the purpose of a nondisclosure agreement. Provide an example of when a nondisclosure agreement kicks in.
Page 9
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Chapter 8: Assessing a New Venture's Financial Strength and Viability
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Sample Questions
Q1) Efficiency is a company's ability to meet its short-term financial obligations. A)True
B)False
Q2) When evaluating a balance sheet, the two primary questions are:
A) whether a firm has sufficient short-term assets to cover its short-term debts and whether it is profitable
B) whether a firm is profitable and whether a firm is financially sound
C) whether its costs of sales is going up and whether it is generating excess cash that could be used to pay down debt or pay dividends
D) whether a firm has sufficient short-term assets to cover its short-term debts and whether it is financially sound
E) whether a firm is profitable and whether it is generating excess cash that could be used to pay down debt or pay dividends
Q3) What are forecasts? What role do they play in the preparation of pro form financial statements?
Q4) Describe each of the four primary financial objectives of firms.
Q5) Describe the difference between historical and pro form financial statements.
Q6) What is ratio analysis? Why is it important?
Page 10
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Chapter 9: Building a New Venture Team
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Sample
Questions
Q1) Amy Phillips founded a cosmetics firm several years ago. Her firm has grown rapidly and is financially successful. One thing that Amy attributes her success to is that early on she assembled a panel of experts who provided her ongoing direction and advice about her business. What Amy created is called an:
A) consultation panel
B) suggestion panel
C) idea board
D) accountability panel
E) advisory board
Q2) A skills profile is a chart that depicts the:
A) preferable skills and abilities of the members of a firm's board of advisors
B) preferable skills and abilities of the members of a firm's board of directors
C) most important skills that are needed in a business startup and where skill gaps exist
D) skills and abilities that will be needed for a firm to maintain an aggressive growth strategy
E) the skills of a company's customers and how those skills impact the product and services a company provides
Q3) 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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Sample Questions
Q1) What is meant by the term "bootstrapping"? Provide several examples of the ways that entrepreneurs bootstrap to raise money or cut costs?
Q2) The three reasons start-ups need funding are:
A) cash flow challenges, capital investments, and lengthy product development cycles
B) business research, cash flow challenges, and costs associated with building a brand
C) bonuses for members of the new venture team, attorney fees, and lengthy product development cycles
D) attorney fees, capital investments, and marketing research
E) bonuses for members of the new venture team, marketing research, and personnel costs
Q3) The are three common sources of "personal" financing for a start-up firm: personal funds, friends and family, and bootstrapping.
A)True B)False
Q4) Historically, the vast majority of SBIR Phase 1 proposals are approved. A)True
B)False
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12
Chapter 11: Unique Marketing Issues
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Sample Questions
Q1) The Google AdWords program allows advertisers to buy ads that will be shown on other Web sites instead of Google's Home Page.
A)True
B)False
Q2) It is more effective to sell:
A) features rather than benefits
B) features and benefits are equal in their importance
C) features are more important for service firms and benefits are more important for manufacturing firms
D) benefits rather than features
E) features are more important for manufacturing firms and benefits are more important for service firms
Q3) A firm's marketing mix consists of the following four elements:
A) product, price, promotion, and place
B) passion, pride, promotion, and place
C) passion, pleasure, product, and price
D) enthusiasm, passion, product, and price
E) place, promotion, passion, and product
Q4) What is a brand? How does a new firm develop a brand?
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Chapter 12: The Importance of Intellectual Property
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Sample Questions
Q1) Trade secret disputes arise most frequently when one firm alleges that a trade secret claimed by another firm is common knowledge, and can therefore be used by anyone.
A)True
B)False
Q2) Which of the following isn't an example of intellectual property?
A) Proactiv's formula for acne medication
B) Yahoo's trademark
C) the Internet domain name www.starbucks.com
D) Microsoft's Window operating system
E) a computer mouse
Q3) The federal Economic Espionage Act, passed in 1996, criminalizes the theft of trade secrets.
A)True
B)False
Q4) Patents, trademarks, copyrights, and licenses are the four key forms of intellectual property.
A)True
B)False
Q5) Identify and briefly describe the three types of patents.
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Chapter 13: Preparing for and Evaluating the Challenges of Growth
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Sample Questions
Q1) According to the basic model of firm growth articulated in Chapter 13, the ability to increase managerial services to facilitate growth is not friction free but is constrained and limited. Which of the following selections is not one of the factors that constrains or limits a firm's ability to increase its managerial services?
A) the time required to socialize new managers
B) how motivated entrepreneurs and/or managers are to grow the firm
C) adverse selection
D) moral hazard
E) benchmarking
Q2) Which of the following was not identified in the textbook as one of the day-to-day challenges involved with growing a firm?
A) cash flow management
B) channel conflict
C) capital constraints
D) quality control
E) price stability
Q3) What are the primary day-to-day challenges involved with growing a firm? Briefly describe each challenge.
Q4) What is the organizational life cycle and why is it important?
Page 15
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Chapter 14: Strategies for Firm Growth
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Sample Questions
Q1) The What Went Wrong? feature in Chapter 14 focuses on Steve & Barry's, a retail chain that grew rapidly from 2003 to 2008 but sold its stores to an investment firm in 2009. According to the feature, during its rapid growth, Steve & Barry's sewed the seeds for its ultimately failure primarily because it:
A) had a hard time finding celebrity endorsers
B) engaged in a number of disappointing acquisitions
C) developed a weak brand
D) wasn't able to gain market share
E) wasn't making money on its retail operations
Q2) In the context of strategic alliances, ________ feature cooperation in research and development, engineering, and manufacturing.
A) administrative alliances
B) directorial alliances
C) marketing alliances
D) organizational alliances
E) technological alliances
Q3) Describe the internal growth strategy 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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Sample Questions
Q1) A management concept called agency theory refutes the value of franchising for organizations with multiple units, like restaurant chains.
A)True
B)False
Q2) To avoid making a hasty judgment, a franchisee may not purchase a franchise for ________ from the time the Franchise Disclosure Document is received.
A) one day
B) three days
C) 10 days
D) 14 days
E) 30 days
Q3) According to the textbook, the main disadvantage of buying a franchise is:
A) franchise organizations typically grow slower than non-franchise organizations in the same industry
B) franchisors typically provide poor levels of support
C) the cost involved
D) the service sector of the U.S. economy is waning in importance
E) franchising is waning in its popularity
Q4) List and explain three of the common misconceptions about franchising.
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