Deck 12: Managing Innovation and Fostering Corporate Entrepreneurship

Question 1

The benefits of converting innovations into successful business ventures include

A) declining competitiveness.
B) shutting down product lines.
C) growth and rewards.
D) focus groups and business incubators.

Answer 1

C

Question 2

For an opportunity to be viable, it must be attractive, achievable, durable, and

A) physically located.
B) compelling.
C) fun.
D) value creating.

Answer 2

D

Question 3

Which of the following is not one of the characteristics of good opportunities?

A) Attractive
B) Achievable
C) Value creating
D) Opportunism

Answer 3

D

Question 4

One of the key factors that makes it difficult for new ventures to be successful as differentiator is

A) strategic renewal.
B) internal development is challenging.
C) mergers and acquisitions are a threat.
D) enacting HYPERLINK "" the strategy is expensive.

Question 5

According to the text, in addition to financial resources, young firms often need the following resources except

A) social capital.
B) logistics support.
C) human capital.
D) government resources.

Question 6

Which of these statements is incorrect? Canadian communications Rogers got started by

A) being involved in wireless telegraphy.
B) creating a radio tube that could be operated from a 110 volt current instead of batteries.
C) being the leading manufacturer of radios in Canada and the U.S.
D) introducing process innovation.

Question 7

The innovation dilemma known as seeds versus weeds refers to

A) choosing to pursue radical rather than incremental innovations.
B) choosing to pursue product rather than process innovations.
C) promoting organizational stars onto innovation teams rather than involving all employees in innovation efforts.
D) none of these are correct

Question 8

Venture capital is

A) a form of private equity
B) available only at the start-up stage
C) a form of human capital
D) a form of angel investing

Question 9

All of the following are questions that should be answered when evaluating the performance of corporate venturing efforts except

A) Is the venture attracting external venture funding?
B) Is the venture considered to be a market success?
C) Does the venture add to the worth of the firm internally?
D) Does the value proposition offered by the venture insulate it from competitive attack?

Question 10

All of the following statements about innovativeness are true except

A) it refers to making decisions and taking risks without certain knowledge of probable outcomes.
B) it refers to a firm's efforts to find new opportunities and novel solutions.
C) it involves creativity and experimentation.
D) it is aimed at developing new products, services, and processes.

Question 11

_____ refers to efforts to create designs and applications of technology to develop new products; _____ refers to efforts to improve the efficiency of organizational systems such as manufacturing and operations.

A) Radical innovation; incremental innovation
B) Breakthrough innovation; instrumental innovation
C) Product innovation; process innovation
D) Product innovation; service innovation

Question 12

The innovation dilemma known as building capabilities versus collaborating refers to

A) developing innovation skills internally versus partnering with qualified outsiders.
B) building innovative products in-house versus outsourcing.
C) building credibility by launching products ahead of potential collaboration partners.
D) all of these are correct

Question 13

_____ are often associated with a low-cost leader strategy, whereas, _____ are frequently an important aspect of a differentiation strategy.

A) Process innovations; product innovations
B) Product innovations; service innovations
C) Radical innovations; instrumental innovations
D) Marketing innovations; management innovations

Question 14

Focus strategies are often associated with small businesses because there is a natural fit between the narrow scope of the strategy and the

A) small size of the firm.
B) a strong spirit of entrepreneurship.
C) a top-down approach to supporting entrepreneurial behaviour.
D) an entrepreneurial culture.

Question 15

Type of entry strategies include all of the following except

A) imitative.
B) adaptive.
C) pioneering.
D) generic.

Question 16

The vast majority of new firms are low-budget start-ups financed through

A) an initial public offering (IPO)
B) bank financing
C) venture capital
D) personal savings and contributions of family and friends

Question 17

In corporations with a strong entrepreneurial culture, the willingness and ability to change

A) is imposed from the top down.
B) is considered a core capability.
C) often leads to instability.
D) often worries stakeholders such as suppliers and creditors.

Question 18

Which of the following dimensions of entrepreneurial orientation is described as "a forward-looking perspective characteristic of a marketplace leader that has the foresight to seize opportunities"?

A) Proactiveness
B) Risk taking
C) Autonomy
D) Competitive aggressiveness

Question 19

Incremental innovations

A) are usually highly disruptive.
B) usually represent technological breakthroughs.
C) are usually small improvements in products or processes.
D) nearly always can be patented.

Question 20

_____ produce fundamental changes that can transform a company or even revolutionize an industry; _____ enhance existing practices and often represent evolutionary applications of fundamental breakthroughs.

A) Technological breakthroughs; product-market breakthroughs
B) New technologies; new paradigms
C) Incremental innovations; radical innovations
D) Radical innovations; incremental innovations

Question 21

As an industry matures, there are greater opportunities for change and so innovations tend to be more radical.

Question 22

Corporate venturing that is focused permeates all parts of the organization and involves every member of the organization.

Question 23

Rogers may be known as a company involved in cell phones and cable TV but it was once the leading manufacturer of radios in Canada and the U.S.

Question 24

Process innovations are often associated with a low cost leadership strategy.

Question 25

In general, radical innovations occur quickly and incremental innovations take a long time to develop.

Question 26

Corporate entrepreneurship is sometimes called "intrapreneuring."

Question 27

Changes in the external environment spark innovative new ideas.

Question 28

Strategic renewal and the pursuit of new venture opportunities are the two primary aims of corporate entrepreneurship.

Question 29

The benefits gained by firms that are the first to enter new markets, establish brand identity, and/or adopt new technologies are known as

A) competitive aggressiveness.
B) technological capabilities.
C) first mover advantages.
D) breakthrough innovations.

Question 30

A venture opportunity may be justified regardless of whether or not it is attractive in the marketplace.

Question 31

Firms using a focused approach to corporate entrepreneurship typically separate corporate venturing activities from on-going operations of the firm.

Question 32

The term "strategic envelope" refers to the scope of a firm's innovation efforts.

Question 33

The 3M Corporation, one of the most highly innovative companies, uses corporate venturing activities to promote innovation. An advantage of this approach is that

A) the ability to change is considered a core capability.
B) new ideas are not well received.
C) employees have to be constantly reminded to think entrepreneurially.
D) employees are not willing to change.

Question 34

The term "innovations" refers primarily to inventions that use the latest technologies.

Question 35

Which kind of new entry strategy sometimes involves filling a market space where the need has not previously been filled adequately?

A) Adaptive
B) Imitative
C) Pioneering
D) Technological risk taking

Question 36

Every idea developed by an entrepreneur represents a viable business opportunity.

Question 37

WestJet was cited by the text as being able to develop a toehold in Western Canada through

A) proceeding slow and steady.
B) partnering with Air Canada.
C) using American pilots.
D) an aggressive market entry and competitiveness.

Question 38

Radical innovation often involves open-ended experimentation which can be very time consuming.

Question 39

According to the text, firms that want to enhance their entrepreneurial position by being competitively aggressive should

A) enter markets with drastically lower prices.
B) foster creativity and experimentation.
C) continuously seek out new products or services.
D) research risk factors to minimize uncertainty.

Question 40

The discovery phase refers to the period when one becomes aware of a new business concept.

Question 41

Pioneering involves creating new ways to solve old problems or meeting customers' needs in a unique new way.

Question 42

Outline the opportunity process and discuss the qualities necessary for an opportunity to become viable.
The starting point for any new venture is the presence of an entrepreneurial opportunity. Where do opportunities come from? For new business start-ups, opportunities come from many sources: current or past work experiences, hobbies that grow into businesses or lead to inventions, suggestions by friends or family, or a chance event that makes an entrepreneur aware of an unmet need. For established firms, new business opportunities come from the needs of existing customers, suggestions by suppliers, or technological developments that lead to new advances. For all firms, there is a major, overarching factor behind all viable opportunities that emerge in the business landscape: change. Change creates opportunities. Entrepreneurial firms make the most of changes brought about by new technology, sociocultural trends, and shifts in consumer demand.
For an opportunity to be viable, it needs to have four qualities.
1. Attractive. The opportunity must be attractive in the marketplace; that is, there must be market demand for the new product or service.
2. Achievable. The opportunity must be practical and physically possible.
3. Durable. The opportunity must be attractive long enough for the development and deployment to be successful; that is, the window of opportunity must be open long enough for it to be worthwhile.
4. Value creating. The opportunity must be potentially profitable; that is, the benefits must surpass the cost of development by a significant margin.
If a new business concept meets these criteria, two other factors must be considered before the opportunity is launched as a business: (1) the resources available to undertake it and (2) the characteristics of the entrepreneur(s) pursuing it.

Question 43

Outline the five dilemmas that companies must wrestle with when pursuing innovation.
Seeds versus weeds-which ideas are worth pursuing?
Experience versus initiative-who will lead an innovation project?
Internal versus external staffing-each requires different resources and focus.
Building capabilities versus collaborating-should you seek help or do it yourself?
Incremental versus pre-emptive launch-must consider competitive responses.

Question 44

Discuss the how the generic strategies of cost leadership, differentiation and focus may be used by new ventures and small businesses.

Question 45

Business risk taking refers to the risk associated with entering untested markets or committing to unproven technologies.

Question 46

What are the differences between product and process innovation? What are the strategic implications of each approach to innovation?

Question 47

Discuss the concept of venture capital as a means of funding entrepreneurial initiatives.

Question 48

Explain what is meant by the term "entrepreneurial orientation" or EO.

Question 49

What is meant by the terms "radical" innovation and "incremental" innovation? Provide example of each.

Question 50

Financial resources are the only kind of resource a new venture needs.

Question 51

Westjet is similar to most other airlines in that it runs a deficit.

Question 52

New-entry strategies typically fall into one of three categories: pioneering new-entry; imitative new-entry; or adaptive new entry. Outline the key strategic intentions of each and provide an example of each.

Question 53

An imitative new entry strategy is in many respects the same as pioneering.

Question 54

Most new entrants use an adaptive strategy.

Question 55

First movers in an industry often capture above-average profits, but usually find it difficult to maintain early market share gains.