Entrepreneurship Quizzes (Midterm Review)
Which of these would not normally be considered an incremental innovation?
An electric car
A dominant design is one imposed by the largest firm in a sector on the rest of that industry.
False
A high-growth venture has more than $1 million in profit.
False
Applying familiar technologies in a familiar market is called exploration.
False
Companies should always invest in radical innovations, not incremental innovations.
False
IBM convert from being a machine maker to a service and solution company. This is an example of product innovation.
False
In user innovation, early and late majority tend to have many radical ideas.
False
Innovation can only happen in the private sector because the public sector is not concerned with making profits or competition between firms
False
Small business is a key element of every nation's economy because it offers a very special environment in which the new can come into being. Austrian economist Michael Porter labeled this process creative destruction . It refers to the way that newly created goods, services, or firms can hurt existing goods, services, or firms.
False
Social entrepreneurship is a form of entrepreneurship which takes place in existing businesses around new products, services or markets.
False
The 'fluid' phase in Abernathy and Utterback's model is characterised by incremental product and process innovation.
False
There are about 40 million entrepreneurs in USA.
False
There are five categories of innovation adopters. Technology enthusiasts are followed by the early majority.
False
Which of the following is most likely to be an advantage of a start-up?
It begins with a clean slate
Which of the following is a disadvantage of a start-up?
It cannot easily gain revolving credit.
Which of the following is most likely to be categorized as a radical innovation?
Moving from small shops to self-service supermarkets
Innovation can take many forms. Running a hospital booking system which reduces patient waiting time is an example of which kind of innovation?
Process Innovation
A McDonald's franchise includes the right to use McDonald's many trade names, specifications of the product to be sold, operating methods, marketing plan, and national advertising.
True
An owner-managed firm involves no more than 50 people and has its owner managing the business on a day-to-day basis
True
Buying an existing business, instead of starting from scratch, has the advantage of having existing customers, employees and business processes.
True
Franchising has the advantage of having existing business model and brand name.
True
Innovation does not always need to push the frontier - sometimes established ideas in one sector can represent powerful new directions for another.
True
Position innovation is about changes in the context into which the products/services are introduced.
True
Product distribution franchising provides the franchisee with specific brand named products, which are resold by the franchisee in a specified territory.
True
Starting a company from scratch has the disadvantage of having no initial name recognition.
True
The BRIE model includes four elements needed to start a business, where Boundary means creating a place for your business - in location and in people's mind.
True
Within the transitional phase in Abernathy and Utterback's model, the predominant type of innovation is in major process innovations required by rising volume.
True
Amy plans to open a laundromat with a gym. She got the idea from the laundromat with a bar and game rooms, which she visits regularly. She wants to test her idea by starting out in a small space with the focus on the laundromat and a small space allocated for gym equipment. Amy's idea is an example of
an incremental innovation
A legal agreement that allows a business to be operated using the name and business procedures of another firm is referred to as a:
franchise