Chapter 13 - Strategic Entrepreneurship

QuadroVax is investing heavily in research and development on new methods of vaccine development that would speed up the creation of vaccines for newly emerging viruses and to get these vaccines to the market rapidly. QuadroVax's shareholders can expect a. immediate wealth creation. b. a long wait for an uncertain payoff. c. a long wait for a high probability payoff. d. a large payoff in the short term with rapidly decreasing wealth generation in the longer run.

b

A traditional entrepreneur Alex identifies a gap in the market for healthy, ready-to-eat snacks. Alex starts a small business, develops a unique recipe for nutritious energy bars, and starts selling them at local farmers' markets. They focus on product development, marketing, and sales to establish their brand and gain customer traction. Alex's main goal is to generate profits and grow their business by meeting the immediate needs of health-conscious consumers. In general, how does strategic entrepreneurship differ from traditional entrepreneurship? a. Strategic entrepreneurship focuses on innovation and competitive management. b. Strategic entrepreneurship emphasizes selling current products. c. Traditional entrepreneurship only involves external actions. d. Traditional entrepreneurship is more risk-averse.

a

Amazon's Dash button allows customers to reorder household essentials at the click of a button. This is an example of a radical, or novel, innovation that provided significant technological changes. a. True b. False

a

Analyze the dimensions of an entrepreneurial mindset within an organization. a. Autonomy, innovativeness, risk taking, proactiveness, and competitiveness b. Creativity, adaptability, collaboration, customer focus, and sustainability c. Planning, organizing, leading, controlling, and delegating d. Quality, efficiency, effectiveness, customer satisfaction, and profitability

a

Analyze the importance of simultaneously mastering opportunity-seeking and advantageseeking behaviors in strategic entrepreneurship. a. Mastering opportunity-seeking and advantage-seeking behaviors leads to marketplace success. b. Mastering opportunity-seeking behavior alone is sufficient for organizational success. c. Mastering advantage-seeking behavior alone is sufficient for organizational success. d. Simultaneously mastering these behaviors has no impact on organizational success.

a

Apply the characteristics of entrepreneurs to a real-life scenario. a. Taking calculated risks to start a new business venture b. Working collaboratively with a team to develop a new product c. Conducting market research to identify customer needs d. Managing daily operations and ensuring operational efficiency

a

Apply the concept of acquiring complementary capabilities for innovation. a. A manufacturing company acquiring a software development firm to enhance its technological capabilities b. A company investing in employee training to develop new skills for innovation c. A company forming a cooperative strategy with a supplier to enhance its supply chain efficiency d. A company solely relying on internal resources for innovation

a

Apply the concept of acquisitions for innovation to a real-life scenario. a. A pharmaceutical company acquiring a biotechnology firm to gain access to its innovative products b. A company investing in research and development to develop new products internally c. A company forming a strategic alliance with a competitor to share technological knowledge d. A company solely relying on internal financial controls to drive innovation

a

Apply the concept of cooperative strategies for innovation to a real-life scenario. a. Two pharmaceutical companies forming an alliance to develop a new drug b. A company hiring a team of in-house researchers to develop innovative products c. A company acquiring a competitor to gain access to their technological knowledge d. A company focusing solely on internal research and development efforts

a

Apply the concept of entrepreneurial opportunities to a real-life example. a. Developing and selling a new product b. Investing in cryptocurrencies like Bitcoin or Ethereum c. Opening a new branch of an existing business d. Acquiring an established company in a different industry

a

Apply the concept of entrepreneurship to a company's response to a market trend. a. Developing a new product based on customer feedback b. Expanding operations to new geographic markets c. Outsourcing production to lower costs d. Implementing cost-cutting measures in response to competition

a

Apply the concept of international entrepreneurship to a real-life scenario. a. A company expanding its operations into new international markets b. A company collaborating with foreign partners to develop a new product c. A company acquiring a foreign firm to enter a new market d. A company focusing on domestic markets and not pursuing international opportunities

a

Apply the relationship between culture and entrepreneurship to a global business context. a. Cultures that encourage individual initiative and cooperation promote entrepreneurial behaviors. b. Cultures with strict rules and regulations hinder entrepreneurial activities. c. Cultures with high levels of hierarchy discourage innovation and risk-taking. d. Cultures that prioritize conformity and conformity discourage entrepreneurship.

a

Blixin Concrete Products, an established firm, is seeking a technologically advanced partner for a strategic alliance. If the potential partner is a new entrepreneurial venture, the main benefit that Blixin Concrete can offer is probably a. investment capital. b. management expertise. c. research and development competencies. d. social networks.

a

Create a scenario where a firm successfully integrates entrepreneurial and strategic actions. a. A tech company identifies a market need and develops an innovative solution. b. A traditional business expands its product line without considering market demands. c. A startup focuses solely on operational efficiency without pursuing new opportunities. d. A company outsources its innovation efforts to external consultants.

a

Entrepreneurship is the process by which individuals or groups identify and pursue opportunities without being immediately constrained by which of the following? a. Resources that they currently control b. Core competencies that they currently control c. Resources that they currently do not control d. Core competencies that they currently do not control

a

Flanders Corp. is an established company with customers who understand its products' characteristics. Flanders continues to invest significantly in R&D to make small improvements to its products. What type of innovation does Flanders pursue? a. Incremental b. Novel c. Radical d. Parallel

a

HealthTech Solutions is an entrepreneurial venture in the healthcare technology industry that aims to revolutionize patient care through innovative digital health solutions. Apply the concept of competitive advantage to strategic entrepreneurship. a. Competitive advantage is achieved through strategic actions that exploit innovations in the marketplace. b. Competitive advantage is based solely on the recognition of viable market opportunities. c. Competitive advantage is temporary and does not require strategic actions. d. Competitive advantage is achieved through radical innovations rather than incremental innovations.

a

In the early stages, the electric vehicle market was considered a nascent industry with limited market share and consumer adoption. Electric vehicles faced challenges such as high costs, limited driving range, and a lack of charging infrastructure. However, due to increasing concerns about climate change and the need for sustainable transportation alternatives, there was growing interest and potential for the market to evolve. How do nascent markets evolve into established industries? a. Through incubation, breakthroughs, and standardization b. By imitating existing products and designs c. With a decline in competition and market demand d. Through the introduction of regulations and institutional shifts

a

Isidore Security Services is a national provider of guard and security services for businesses. It has been in business for over 90 years, having been founded by one of Teddy Roosevelt's Rough Riders (Isidore O'Malley). Lately, it has been losing clients to more aggressive and innovative firms offering remote security monitoring systems instead of a guard-based approach. The board of directors of Isidore Security Services is concerned that this downward trend may threaten the existence of this venerable firm and the jobs of its employees. Which of the following statements is true? a. This is an example of an established firm neglecting the opportunity-seeking aspect of strategic entrepreneurship. b . This example shows the dysfunctional aspects of unrestricted entrepreneurialism. c. This is an example of the lack of human capital hampering internal innovation.

a

More established firms, as compared to younger ventures, tend to excel in what part of strategic entrepreneurship? a. Advantage-seeking b. Opportunityseeking c. Value-creating d. Revenue-creating

a

Panera Bread has innovated to improve the quality of its distribution system, to improve the quality of its bread dough, and to introduce new menu items. These are examples of a. incremental innovation. b. invention. c. imitation. d. the use of social capital.

a

Pet Care Companion Connection (PCCC) is an organization that trains persons with mild-tomoderate mental disabilities to care for pets in a pet boarding facility. This organization has been successful in providing a quality service for pet owners and a supportive training environment for their trainees. The tuition charged to trainees is only somewhat higher than the fee that day-care providers would charge for these individuals. Graduates of the program are qualified for employment by commercial kennels. PCCC is an example of a. taking advantage of a need in the marketplace. b. creative destruction of existing services for pet boarding. c. institutionalized entrepreneurship. d. internal corporate venturing.

a

Rosalie has become totally preoccupied with her idea for creating a business leasing horses to riders on the same principle as time-shares on condominiums. Rosalie is researching the legal, financial, and insurance aspects of her idea and is preparing a prospectus to take to banks to ask for a business loan. Rosalie's significant other is complaining that she "sleeps, eats, and drinks" this concept. Rosalie has the entrepreneurial characteristic of passion. a. True b. False

a

TechCorp, a leading technology company, embraces corporate entrepreneurship through internal innovation initiatives. The organization encourages its employees to generate and implement new ideas, fostering a culture of creativity and entrepreneurship within the company. In the context of strategic entrepreneurship, what is corporate entrepreneurship? a. Entrepreneurial actions within an established firm b. Entrepreneurial opportunities pursued by start-up ventures c. Entrepreneurial actions limited to international markets d. Entrepreneurial actions focused on cooperative strategies

a

What is the main focus of strategic entrepreneurship? a. Seeking advantage and opportunity simultaneously b. Maintaining competitiveness in traditional business c. Expanding into new areas while selling current products d. Managing innovation efforts competitively

a

A negative effect of acquiring other firms for the purpose of innovation is a. innovations cannot be transferred between organizations. b. the effect it can have on the firm's own ability to produce innovations. c. innovations may not actually be present in the firm after the purchase is completed. d. the acquired firm's employees usually leave.

b

A tech startup may develop a mobile app that simplifies a complex task or provides a new solution to an existing problem. They bring their innovative product to market and position themselves as a leader in the industry. Strategic entrepreneurship involves integrating which two types of actions? a. Financial and operational actions b. Entrepreneurial and strategic actions c. Internal and external actions d. Tactical and operational actions

b

AgroPharm is searching for a top-level executive. AgroPharm has marketed its products only to U.S. farmers and agribusinesses in the past. Now, the company plans to expand operations to Mexico and Central America in the next two years. To maximize the chances of success, it is critical that the new executive a. be of Hispanic descent. b. have international experience. c. possess an advanced degree in animal science. d. have a background in managing agribusiness firms.

b

Analyze the impact of entrepreneurial opportunities on existing products or methods. a. Entrepreneurial opportunities have no impact on existing products or methods. b. Entrepreneurial opportunities lead to creative destruction and the introduction of new products or methods. c. Existing products or methods can easily adapt to entrepreneurial opportunities. d. Entrepreneurial opportunities only result in incremental improvements to existing products or methods.

b

Analyze the role of entrepreneurship in the innovation process. a. Entrepreneurship is not relevant to the innovation process. b. Entrepreneurship bridges the gap between invention and innovation. c. Entrepreneurship is only important in start-up ventures. d. Entrepreneurship hinders the commercialization of inventions.

b

Apply the concept of imitation to competitive behavior. a. Developing a unique product feature to differentiate from competitors b. Replicating an existing product with identical features and price c. Conducting market research to identify consumer preferences d. Acquiring a competitor to gain access to their customer base

b

Apply the concept of innovation to a business context. a. Developing a new marketing campaign for an existing product b. Creating a prototype for a new product idea c. Implementing a cost-cutting measure in manufacturing processes d. Expanding operations to new geographic markets

b

Apply the concept of invention to a real-life scenario. a. Developing a new product based on an existing idea b. Conducting research and experiments to create a new technology c. Identifying a market need and proposing a solution d. Replicating an existing product with minor modifications

b

Because it replaces existing products and methods of production, entrepreneurship is a process of a. harnessing human potential. b. creative destruction. c. creation of opportunity. d. exploitation of innovation.

b

BerEdel Group (BEG) is an international, diversified firm. Marchers operates in the same industry and is also diversified, but only domestically. Which of the following would you expect? a. BEG is less profitable than Marchers. b. BEG is more innovative than Marchers. c. BEG is less technologically advanced than Marchers. d. BEG is more likely to have an individualistic culture than Marchers.

b

Bill Kroganski is the owner of a moderately successful industrial services firm. His reaction to the introduction of a new process technology that could be a direct competitor to the process his firm utilizes is fear. He spends his time considering ways to isolate his firm from this new technology. Bill has characteristics consistent with the entrepreneurial mind-set. a. True b. False

b

Charles is a customer service representative for a home improvement store. He has creative ideas about how to increase customer satisfaction. Charles's talents will MOST likely be used in a firm that a. uses the induced strategic behavior form of internal corporate venturing. b. uses the autonomous strategic behavior form of internal corporate venturing. c. makes significant investment in research and development. d. focuses on an acquisition strategy for gaining innovative ideas.

b

Create a scenario demonstrating the essence of entrepreneurship. a. A business owner adapts their marketing strategy to reach a new target market. b. An entrepreneur identifies a gap in the market and develops a unique solution. c. A company implements cost-cutting measures to increase profitability. d. A manager introduces incremental improvements to an existing product.

b

Create a scenario illustrating the incubation stage of nascent markets. a. A company introduces a new product in a well-established industry. b. Several firms enter a new industry with a rudimentary product. c. Consumer demand for a new product surges, stabilizing the industry. d. A company acquires another company to innovate and expand its product line.

b

For which of the following reasons have large pharmaceutical companies been forming alliances with biotechnology companies? a. To evade legislative restrictions on drug research in the United States b. To develop new products and bring them to market c. Because both firms had declining profitability and needed cash infusions from other firms d. In order to gain absorptive capacity

b

GreenBox, a company that recycles paper products to make cardboard cartons, has introduced a new product that resists damage by moisture. GreenBox can expect that a. this innovation will resist competitors' attempts to imitate it. b . its investors will react positively to the introduction of the new product because of the potential for higher returns. c. its investors will react negatively because of the risk and cost entailed in introducing a new product. d . this will be recognized in the industry as a radical innovation.

b

InnoHealth Pharmaceuticals demonstrates how innovation can be powerful. By developing innovative drugs, securing intellectual property rights, differentiating from competitors, driving market adoption, and generating revenue and shareholder value, the company exemplifies how innovation-driven success can lead to economic prosperity. Apply the concept of innovation as a means of creating wealth. a. Innovation leads to resource depletion and economic decline. b. Innovation enhances the potential for creating wealth. c. Innovation is irrelevant to wealth creation. d. Innovation only benefits large corporations.

b

PieTech has top-level managers that recognize the value of strategic alliances to enhance innovation capabilities in the pastry industry. They establish partnerships with culinary schools, baking equipment manufacturers, or pastry chefs to access specialized knowledge, techniques, and market insights. For example, they may collaborate with renowned pastry chefs to develop innovative pie crust recipes or work with baking equipment manufacturers to create cutting-edge pie crust shaping and baking tools. What are the responsibilities of top-level managers focusing on emerging brands or innovation? a. Top-level managers must terminate all innovative projects that show signs of failure. b. Top-level managers collaborate with others to integrate innovation into the firm's strategy. c. Top-level managers are solely responsible for identifying entrepreneurial opportunities.

b

The new abrasive, Cubitron II, was developed through cooperative relationships among 3M business units. As such, Cubitron II is an example of a. the use of autonomous strategic behavior. b. the use of induced strategic behavior. c. the development of novel innovations. d. innovation through acquisitions.

b

While smaller firms must use cooperative strategies as a means of producing innovations, larger firms with large R&D units such as P&G and 3M can produce most if not all innovations internally. a. True b. False

b

Why do entrepreneurial ventures tend to produce more radical innovations than larger, more established firms do? a. They have fewer resources. b. They have more strategic flexibility. c. They have more slack. d. They have less slack.

b

3M's Cubitron II, described as "an industrial abrasive that cuts faster, lasts longer, sharpens itself, and requires less elbow grease than any other abrasive on the market," is an example of a(n) a. imitation of a competitor's product. b. novel innovation. c. incremental innovation. d. innovation created through a cooperative strategy.

c

Analyze the differences between nascent markets and fast-cycle markets. a. Nascent markets have predictable patterns of consumer demand. b. Fast-cycle markets have established market order and norms. c. Nascent markets are characterized by competing technologies. d. Fast-cycle markets experience a slow rate of change.

c

Analyze the risks and time frame involved in entrepreneurial investments. a. Strategic entrepreneurship minimizes risks and accelerates payoffs. b. Entrepreneurial investments have low risks and quick payoffs. c. Entrepreneurial investments can be risky and have a long payback period. d. Strategic entrepreneurship guarantees high returns and short payback periods.

c

Apply the concept of nascent markets to the electric vehicles industry. a. Electric vehicles industry is an established industry with stable market demand. b. Nascent markets experience low consumer demand and limited competition. c. The electric vehicles industry is characterized by rapid technological breakthroughs. d. In nascent markets, products can be easily and quickly imitated.

c

Elon Musk, the strategic entrepreneur behind Tesla, embraced risk-taking, a strong vision, and an entrepreneurial mindset. He saw an opportunity to disrupt the automotive industry by combining electric propulsion with advanced battery technology, aiming to offer highperformance EVs that could compete with traditional gasoline-powered cars. Tesla's entrepreneurial approach enabled them to develop radical innovations in EV technology, autonomous driving, and energy storage solutions. Apply the concept of strategic entrepreneurship to explain why entrepreneurial ventures often produce more radical innovations than larger, established companies. a. Entrepreneurial ventures have greater access to resources and capabilities. b. Larger, established companies have more strategic flexibility and willingness to take risks. c. Entrepreneurial ventures are more effective at recognizing opportunities.

c

Entrepreneurs tend to have all the following characteristics EXCEPT: a. a willingness to take responsibility for projects. b. passion. c. a preference for certainty about projects. d. optimism.

c

Evaluate the benefits of strategic entrepreneurship for a firm's long-term success. a. Strategic entrepreneurship ensures short-term profitability. b. Strategic entrepreneurship minimizes the need for innovation. c. Strategic entrepreneurship fosters innovation and sustainable competitive advantage. d. Strategic entrepreneurship relies solely on external opportunities for growth.

c

Evaluate the importance of entrepreneurship in the global economy. a. Entrepreneurship has no impact on the global economy. b. Entrepreneurship is limited to individual firms and does not affect countries' economies. c. Entrepreneurship drives economic growth and innovation at both the firm and national levels. d. The global economy is unaffected by entrepreneurial activities.

c

Evaluate the value creation potential of strategic entrepreneurship. a. Strategic entrepreneurship is irrelevant to value creation in established organizations. b. Start-up ventures rely solely on strategic entrepreneurship for value creation. c. Strategic entrepreneurship creates value in both start-up ventures and established firms. d. Value creation is limited to internal innovation within established firms.

c

How is the level of entrepreneurial activity in a nation related to the nation's level of economic productivity? a. Negatively b. Independent of c. Positively d. Weakly

c

If the firm's current employees are well-trained in their jobs, but also have the ability to understand and apply new knowledge, these employees have a. social capital. b. entrepreneurial capabilities. c. high absorptive capacity to learn. d. intellectual slack.

c

Innovations that involve significant technological breakthroughs and create new knowledge a. build incrementally on the firm's existing technologies and knowledge. b. are the most common type of innovation. c. involve substantial uncertainty and risk. d. typically have clear market opportunities.

c

Internal corporate venturing does NOT involve a. autonomous strategic behavior. b. induced strategic behavior. c. strategic alliances. d. product champions.

c

PracticalSolutions is a small firm providing employee assistance programs for companies with troubled employees. PracticalSolutions frequently partners with other consulting firms to provide creative solutions for companies with personnel problems. This history of partnering exemplifies a. intellectual capital. b. institutional capital. c. alignment of complementary assets. d. alignment of contradictory assets.

c

The main risk in a strategic alliance is that a. the alliance will not result in a successful innovation. b. critical employees will be hired away by the strategic partner. c. one partner will take the other partner's knowledge and use it to enhance its own competitive abilities. d. the partners will lose control over their internal processes.

c

The three types of innovative activity include all of the following EXCEPT: a. invention. b. imitation. c. implementation d. innovation.

c

ValTek engages in international entrepreneurship. In contrast to a company that is involved only in domestic entrepreneurship, ValTek must concentrate more on a. rewarding individual entrepreneurs within the company. b. rewarding individual initiative. c. building the capabilities to innovate and acquiring resources to make strategic decisions. d. promoting activities that build collectivism within its human and social capital.

c

WayWard Products has a deliberate strategy to encourage internal innovations. It has established processes to support autonomous strategic behavior as well as induced strategic behavior. WayWard Products is involved in a. entrepreneurial incubation. b. creative destruction. c. internal corporate venturing. d. cooperative innovation strategies.

c

What are nascent markets characterized by? a. Established market order and norms b. High consumer demand and predictable patterns c. Rapidly growing demand and competing technologies d. Standardized product designs and manufacturing processes

c

A cross-functional work team is having difficulties in operating smoothly, and friction has developed among some of the members. Many of the strongest complaints are from the representatives of management who complain that the research scientists are disorganized, haphazard, and undisciplined. Managers complain that the scientists do not adhere to any fixed rules or procedures. On the other hand, the research scientists complain that the managerial representatives are excessively rule-oriented bureaucrats and have no flexibility or spontaneity. The MAIN problem with this team seems to be centered around differences in a. interpersonal orientation. b. time orientation. c. goal orientation. d. formality of structure.

d

All of the following are examples of the importance of selecting the right partner firms for cooperative strategies in innovation EXCEPT: a. partner firms should have complementary skills and compatible strategic goals. b. the ideal partnership reduces challenges and risks in managing the alliance. c. selecting the right partners mitigates the risk of technology appropriation. d. diversification of capital assets.

d

All of the following are risks associated with using acquisitions as a means of innovation EXCEPT: a. the alliance formed through acquisition may not work out well. b. a firm may rely too heavily on acquisitions and reduce allocations to internal R&D. c. difficulties may arise in the integration process of the acquired firm into the acquiring firm. d. siloing core competencies in new business units.

d

All of the following help to evaluate the importance of balancing financial and strategic controls in the acquisition process for innovation EXCEPT: a. financial controls help identify and manage acquisitions. b. strategic controls drive the acquisitions for developing innovations. c. a balanced approach increases the likelihood of successful innovation efforts. d. financial controls and strategic controls compete synergistically to diversify assets.

d

Each of the following is a risk associated with cooperative strategies for innovation EXCEPT: a. collaborating firms might face conflict and struggle to reach mutual goals. b. partner firms might appropriate each other's technology for their own benefit. c. too many alliances can lead to difficulties in managing each partnership successfully. d. growth may be stifled as a result of speedy innovation.

d

Firms develop innovation in all of the following ways EXCEPT: a. through autonomous or induced strategic behavior. b. by acquiring other companies. c. through cooperative strategies. d. via divestiture of low-performing units.

d

InnoTech Solutions is a technology company that specializes in developing cutting-edge software solutions. Apply the concept of strategic entrepreneurship to innovation methods that might affect InnoTech. a. Strategic entrepreneurship involves only internal innovation within firms. b. Firms use cooperative strategies but do not engage in internal innovation. c. Acquiring other companies is the primary method of strategic entrepreneurship. d. Firms use a combination of internal, cooperative, and acquisition methods to innovate.

d

New entrepreneurial firms are better than larger established firms at a. implementing innovations. b. gaining competitive advantage. c. making alliances. d. identifying entrepreneurial opportunities.

d

One real-life example of an acquisition is Microsoft's acquisition of LinkedIn. In 2016, Microsoft acquired LinkedIn, the professional networking platform, for approximately $26.2 billion. The acquisition aimed to combine Microsoft's software and cloud computing capabilities with LinkedIn's vast professional network and data. All the following are benefits of acquisitions for innovation EXCEPT: a. acquisitions provide a rapid means of growth for firms. b. acquiring innovative firms grants access to their innovative capabilities and products. c. acquisitions can support a firm's efforts to expand into new markets. d. acquisitions minimize risk by decreasing capital investment.

d

Roland has developed and patented an inexpensive and organic way to enhance the fertility of clay soils without the addition of chemical fertilizers. Established agricultural chemical companies have rejected his proposals. After six months of promoting his invention during his time off from his regular job, Roland has decided to set his dream aside. Roland lacks a key characteristic of successful entrepreneurs, which is a. the ability to identify opportunities. b. a corporate sponsor. c. financial slack. d. passion for his invention.

d

TechVenture Innovations, an investment and innovation firm, leverages access to new opportunities, alignment of complementary assets, and cost-effective manufacturing techniques across subsidiaries to drive innovation, create wealth, and gain a competitive advantage in various industries. All of the following are benefits of cooperative strategies for innovation EXCEPT: a. access to new business opportunities and potential innovations. b. alignment of complementary assets for more frequent radical innovations. c. lower manufacturing costs through novel construction techniques. d. increased diversification of assets and product lines.

d

The number of patents held by an organization is a rough guide to the a. effective use of organizational politics. b. future success of an initial public offering. c. amount of venture capital a firm will be able to attract. d. level of innovation in a firm.

d

The risks of international entrepreneurship include all of the following EXCEPT: a. unstable foreign currencies. b. problems with market efficiencies. c. limitations on market size. d. strong "buy-domestic" programs.

d

The use or application of entrepreneurship within an established firm is called a. corporate emergence. b. transformational leadership. c. exceptional R&D. d. corporate entrepreneurship.

d