Chapter 4: Innovation and the Marketplace

Innovation can best be defined as:
1. the generation of new ideas
2. the evolution of new ideas
3. the opposite of creativity
4. the successful exploitation of new ideas
5. the setting up of a new business
Innovation is really not much different from invention. True/False
1. True
2. False
Which of the following is not one of the ways in which an entrepreneur causes distinct changes in the market through the introduction of innovations:
1. the introduction of new products or services
2. the opening of a new market
3. the reverse-engineering of an existing product line
4. the carrying out of the new organisation of any industry
5. the introduction of a new method of production
User innovation is:
1. less likely than manufacturer innovation
2. more difficult to manage than other types of innovation
3. when the developer expects to benefit by using it
4. when the developer expects to benefit by selling it
5. very unusual in small businesses
Which of the following statements most accurately describes innovation:
1. Innovation is an absolute not a relative concept
2. Innovation is easy to measure
3. Innovation is much more important to small businesses than to large businesses
4. Innovation is a relative not an absolute concept
5. Innovation is not of any serious interest to most national Governments
The dominant design is always the best design available. True / False
1. True
2. False
Which of the following is not an advantage that large firms hold over small firms in managing innovation?
1. large firms are more likely to attract highly skilled specialists, often for R&D
2. large firms are more able to employ patent and legal specialists
3. large firms are more able to raise venture capital and spread risk
4. large firms are more able to market existing products with comprehensive distribution and servicing networks
5. large firms are more likely to come up with better ideas than small businesses
Entrepreneurship and innovation usually require very good teamwork. True or False?
1. True
2. False
Which of the following is not one of Peter Drucker’s ‘Seven Sources of Opportunity’:
1. the unexpected
2. imagination
3. the incongruous
4. process need
5. new knowledge
Which of the following statements is false?
1. Market segmentation is a useful process for small businesses to undertake
2. Selling is essentially a matching process
3. A benefit is the value of a product feature to a customer
4. It is a good idea for small businesses to compete solely on price
5. Entrepreneurs usually care about the products or services they are producing and selling

Chapter 4: Innovation and the Marketplace

Quiz