Innovation and Entrepreneurship Exam Review
Course Introduction
This course explores the foundational principles of innovation and the entrepreneurial process, equipping students with the skills and mindset needed to identify opportunities, generate creative ideas, and transform them into viable business ventures. Students will analyze case studies of successful startups, learn practical frameworks for developing business models, and understand the key factors that influence the success and failure of new enterprises. Topics include opportunity recognition, value proposition design, market validation, funding strategies, and scaling businesses, alongside discussions about leadership, risk management, and the role of innovation in established organizations. By the end of the course, students will be prepared to turn innovative ideas into entrepreneurial ventures or drive change within existing companies.
Recommended Textbook
Entrepreneurship Successfully Launching New Ventures 3rd Edition by Bruce R. Barringer
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Chapter 1: Introduction to Entrepreneurship
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Sample Questions
Q1) The number one characteristic shared by successful entrepreneurs is passion for the business.
A)True
B)False
Answer: True
Q2) Jim Johnson, who is at heart a craftsperson, recently started a firm to manufacture what he believes is the safest and the most versatile snowboard available. Jim's desire is to sell his snowboard to as many people as possible, because he firmly believes in the merits of his product. Jim's story best illustrates which of the following characteristics or attributes of successful entrepreneurs?
A) execution intelligence
B) a desire to be your own boss
C) tenacity despite failure
D) desire to gain financial rewards
E) product/customer focus
Answer: E
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Chapter 2: Recognizing Opportunities and Generating Ideas
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Sample Questions
Q1) Which of the following is not one of the rules for a formal brainstorming session?
A) no criticism is allowed
B) the session moves quickly
C) freewheeling is encouraged
D) leapfrogging is encouraged
E) the session is used for decision making
Answer: E
Q2) Describe the difference between an idea and an opportunity. Why is the distinction important?
Answer: An opportunity is a favorable set of circumstances that creates a need for a new product,service,or business.An opportunity has four essential qualities: it is (1) attractive,(2) durable,(3) timely,and (4) is anchored in a product,service,or business that creates or adds value for its buyer of end user.In contrast,an idea is a thought,impression,or notion.It may or may not meet the criteria of an opportunity. This distinction between an idea and an opportunity is important because many entrepreneurial ventures fail not because the entrepreneurs that launched them didn't work hard,but rather because there was no real opportunity to begin with.
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Chapter 3: Feasibility Analysis
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Sample Questions
Q1) Which of the following factors is a negative as it pertains to the financial feasibility of a business venture?
A) steady and rapid growth in sales during the first five to seven years in a clearly defined market niche
B) high percentage of recurring revenuemeaning that once a firm wins a client, the client will provide recurring sources of revenue
C) inability to forecast income and expenses with a reasonable degree of accuracy
D) internally generated funds to finance and sustain growth
E) availability of an exit opportunity for investors to convert equity into cash
Answer: C
Q2) There are two components to product/service feasibility analysis: product/service desirability and total startup funds needed.
A)True
B)False
Answer: False
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Chapter 4: Writing a Business Plan
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Sample Questions
Q1) According to the textbook the first rule in making an oral presentation is to:
A) follow instructions
B) be creative
C) emphasize all the positive aspects of a business venture
D) appear confident
E) do something out of the ordinary
Q2) 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
Q3) The executive summary is a lengthy overview of the entire business plan. A)True
B)False
Q4) An operational business plan is between 40 and 100 pages, it is meant primarily for an internal audience, and works best as a tool for creating a blueprint for a new venture's operations and providing guidance to operational managers.
A)True
B)False
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Chapter 5: Industry and Competitor Analysis
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Sample Questions
Q1) The What Went Wrong? feature in Chapter 5 focuses on Bath & Body Works, a company that lost a favorable position in an industry. According to the feature, Bath & Body Works lost its favorable position by:
A) a poor positioning strategy to begin with
B) missing a number of changing environmental trends
C) missing a number of changing business trends
D) a poor understanding of Porter's five forces framework and what it means
E) poor competitive intelligence
Q2) The five competitive forces model is a framework for understanding the structure of an industry.
A)True
B)False
Q3) Firms that pursue a multidomestic strategy use the same basic approach in all foreign markets.
A)True
B)False
Q4) Industry analysis is business research that focuses on the potential of an industry.
A)True
B)False
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Chapter 6: Developing an Effective Business Model
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Sample Questions
Q1) Which of the following statement is incorrect regarding the "core strategy" component of a firm's business model?
A) A firm's core strategy describes how it competes relative to its competitors.
B) The product a firm chooses has little impact on its core strategy and business model.
C) A company's product/market scope defines the products and markets on which it will compete.
D) From a broad perspective firms typically choose one of two generic strategies: cost leadership or differentiation.
E) The generic strategy a firm chooses greatly affects its business model.
Q2) 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
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) Why is it important for a firm to have a well-thought-out business model?
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Page 8
Chapter 7: Preparing the Proper Ethical and Legal Foundation
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Sample Questions
Q1) The most important thing that any entrepreneur, or team of entrepreneurs, can do to build a strong ethical culture in their organization is to hire an aggressive attorney.
A)True
B)False
Q2) Which of the following statements is incorrect regarding common stock?
A) Common stock is issued more narrowly than preferred stock.
B) The common stockholders have voting rights.
C) The common stockholders get paid after the creditors in the event the liquidation of the corporation.
D) Common stock is the form of stock that most shareholders of a corporation own.
E) The common stockholders elect the board of directors.
Q3) In a small number of communities across the United States, a business needs a license to operate.
A)True
B)False
Q4) Describe the purpose of a nondisclosure agreement. Provide an example of when a nondisclosure agreement kicks in.
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Chapter 8: Assessing a New Venture's Financial Strength and Viability
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Sample Questions
Q1) Describe each of the four primary financial objectives of firms.
Q2) The statement of cash flows is divided into three separate activities:
A) profitability activities, stability activities, and investing activities
B) stability activities, earning activities, and financing activities
C) operating activities, capital activities, and liquidity activities
D) spending activities, earning activities, and capital activities
E) operating activities, investing activities, and financing activities
Q3) The statement of cash flows summarizes the changes in a firm's cash position for a specified period of time and details why the change occurred.
A)True
B)False
Q4) 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
Q5) Describe the difference between historical and pro form financial statements.
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Chapter 9: Building a New Venture Team
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Sample Questions
Q1) Homogeneous teams are diverse in terms of their abilities and experiences.
A)True
B)False
Q2) Consultants fall into two categories: paid consultants and consultants who are made available for free or at a reduced rate through a nonprofit or government agency.
A)True
B)False
Q3) Savanna Combs opened a clothing boutique two years ago. Unfortunately, the boutique failed after 18 months. Savanna attributes the failure of her boutique to that fact that her employees couldn't adjust quickly enough to their new roles and because her boutique lacked a "track record" with outside buyers and sellers, which made it difficult to form partnerships and make sales. Savanna suffered from what research call the:
A) burden of novelty
B) millstone of innovation
C) liability of newness
D) liability of preparedness
E) burden of newness
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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Sample Questions
Q1) Most business angels remain fairly anonymous and are matched up with entrepreneurs through referrals.
A)True
B)False
Q2) Historically, commercial banks have not been viewed as a practical source of financing for startup firms.
A)True
B)False
Q3) In startup firms, inventory must be purchased, employees must be trained and paid, and advertising must be paid for before cash is generated from sales. Which of the following reasons that motivate firms to seek funding or financing is illustrated in this example?
A) cash flow challenges
B) marketing costs
C) personnel costs
D) capital investments
E) lengthy product development cycles
Q4) What is an elevator speech? How did it get its name?
Q5) Why do most firms need funding? Provide a brief explanation of each reason.
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Chapter 11: Unique Marketing Issues
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Sample Questions
Q1) A niche market is a place within a market segment that represents a narrow group of customers with similar interests.
A)True
B)False
Q2) Because of the weaknesses associated with advertising, most startups do not advertise their products broadly.
A)True
B)False
Q3) According to the textbook, most experts recommend ________ pricing because it hinges on the perceived value of a product or service.
A) value-based
B) cost-based
C) competitive-based
D) tactical
E) strategic
Q4) A firm's "position" is concerned with how it is situated relative to its rivals.
A)True
B)False
Q5) 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) The Partnering for Success feature in Chapter 12 starts by talking about Gary Schwartzberg, who along with a partner, developed a new type of bagel, dubbed the "Begeler," that was eventually licenses to Kraft. According to the feature, entrepreneurs and inventors, like Gary Schwartzberg, are finding that large consumer products companies are:
A) are ambivalent about what they have to offer
B) are increasingly interested in what they have to offer for new products, but are ambivalent about services
C) increasingly interested in what they have to offer
D) are increasingly interested in what they have to offer for new services, but are ambivalent about products
E) increasingly disinterested in what they have to offer
Q2) According to current regulations, any copyrightable work created on or after January 1, 1978, is protected by copyright law for the life of the author plus:
A) 28.5 years
B) 101 years
C) 40 years
D) 55 years
E) 70 years
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Page 14
Chapter 13: Preparing for and Evaluating the Challenges of Growth
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Sample Questions
Q1) What are the primary day-to-day challenges involved with growing a firm? Briefly describe each challenge.
Q2) The main challenges for a business in the early growth stage are to make sure the initial product or service is right and to start laying the groundwork for building a larger organization.
A)True
B)False
Q3) Tiffany Smith owns a barbeque restaurant. One expense that Tiffany watches closely is the cost of propane, which she uses to heat her ovens. The more barbeque food Tiffany sells, the more it cost her for propane on a monthly basis. For Tiffany, the cost of propane is a:
A) variable cost
B) secondary cost
C) resultant cost
D) fixed cost
E) irregular cost
Q4) Define the term "market leadership." Why do firm work hard to obtain market leadership?
Q5) What is the organizational life cycle and why is it important?
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Chapter 14: Strategies for Firm Growth
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Sample Questions
Q1) New product development, other product related strategies, and international expansion are examples of:
A) external growth strategies
B) domestic growth strategies
C) secondary growth strategies
D) internal growth strategies
E) inward growth strategies
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) In a scale joint venture, the partners collaborate at a single point in the value chain to gain economies of scale in production of distribution.
A)True
B)False
Q4) Describe what a joint venture is. Identify the two types of joint ventures.
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Chapter 15: Franchising
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Sample Questions
Q1) Because franchisees put their personal capital at risk, they are highly motivated to make their franchise outlets successful. According to the textbook, this advantage of franchising a business is referred to as:
A) franchisee owner-incentive
B) franchisee impulse
C) agency theory
D) institutional theory
E) franchisee motivation
Q2) A(n) ________ involves the sale of a single franchise for a specific location.
A) individual franchise agreement
B) one-of-a-kind franchise agreement
C) pinpoint franchise agreement
D) specific franchise agreement
E) precise franchise agreement
Q3) Franchisors are required by law to disclose all their costs in a document called the Franchise Disclosure Document.
A)True
B)False
Q4) How can a person tell if franchising is right for them?
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