Chapter 5 Creativity, the Business Idea, and Opportunity Analysis

True/False Questions
1. Members of the distribution channel are usually not good sources of ideas for new
products.
Answer: False Page: 140 Difficulty: Medium
. !he files of the ".#. Patent $ffice are %ept confidential and entrepreneurs cannot
study their contents.
Answer: False Page: 140 Difficulty: Medium
&. !he largest source of new ideas is the ".#. Patent $ffice.
Answer: False Page: 141 Difficulty: 'asy
4. Focus groups consist of 1( to ( participants who are as%ed specific ob)ecti*e
functions.
Answer: False Page: 14 Difficulty: +ard
(. !he focus group is an e,cellent method for initially screening ideas and concepts.
Answer: !rue Page: 14 Difficulty: Medium
-. !he drawbac% with problem in*entory analysis is that it cannot be used to test a new
product idea.
Answer: False Page: 14& Difficulty: +ard
.. "nli%e the focus group/ problem in*entory analysis focuses on specific problems in a
general product category.
Answer: !rue Page: 14& Difficulty: +ard
0. 1reati*ity tends to increase with age.
Answer: False Page: 144 Difficulty: Medium
2. 3rainstorming is an unstructured process used for generating possible ideas about a
problem within a limited time frame through the spontaneous contributions of
participants.
Answer: !rue Page: 144 Difficulty: 'asy
Hisrich, Entrepreneurship, Seventh Edition 35
Chapter 5 Creativity, the Business Idea, and Opportunity Analysis
10. 4n re*erse brainstorming/ the focus is on the positi*e/ all the things that are right about
an idea.
Answer: False Page: 144 Difficulty: Medium
11. 3rainwriting is silent/ written generation of ideas by a group of people.
Answer: !rue Page: 14( Difficulty: Medium
1. !he 5ordon method/ in contrast with the other methods/ begins with group members
not %nowing the e,act nature of the problem.
Answer: !rue Page: 14( Difficulty: Medium
1&. Forced relationships is a method of forcing confrontations in focus groups.
Answer: False Page: 14- Difficulty: Medium
14. "sing the big6dream approach/ a new idea is de*eloped through a list of related issues
or suggestions.
Answer: False Page: 14. Difficulty: +ard
1(. !he big6dream approach re7uires the entrepreneur to dream about the problem and its
solution/ thin%ing big.
Answer: !rue Page: 14. Difficulty: 'asy
1-. 1reati*e synthesis is closely connected to the techni7ue of parameter analysis.
Answer: !rue Page: 14.6140 Difficulty: +ard
1.. !he entrepreneur8s ability to recogni9e a business opportunity is a result of his or her
%nowledge and e,perience.
Answer: !rue Page: 1( Difficulty: Medium
10. :hen e*aluating new product de*elopment/ the criteria should be inclusi*e and
7uantitati*e.
Answer: !rue Page: 1(4 Difficulty: Medium
36 Hisrich, Entrepreneurship, Seventh Edition
Chapter 5 Creativity, the Business Idea, and Opportunity Analysis
12. $ne e*aluation method successfully used in the concept stage is the systematic mar%et
e*aluation chec%list.
Answer: False Page: 1(- Difficulty: Medium
0. 4n the concept stage of product planning/ the refined product idea is tested to
determine customer acceptance.
Answer: !rue Page: 1(0 Difficulty: 'asy
1. $nly the test mar%eting phase of product planning pro*ides actual sales results to
)udge the product8s customer appeal.
Answer: !rue Page: 1(0 Difficulty: Medium
. 4n the product de*elopment stage/ consumer reaction to the physical product;ser*ice is
determined.
Answer: !rue Page: 1(0 Difficulty: Medium
&. !he entrepreneur should always design and build his own webpage to maintain
strategic control.
Answer: False Page: 1-1 Difficulty: Medium
4. An online company8s bac%6end operations in*ol*e integration of customer orders with
distribution channels.
Answer: !rue Page: 1-061-1 Difficulty: Medium
(. '*ery website should ha*e search capabilities.
Answer: !rue Page: 1-1 Difficulty: 'asy
-. '61ommerce online sales and long6distance deli*eries for fresh fruits and *egetables
for indi*idual consumers is a fast6growing segment.
Answer: !rue Page: 1- Difficulty: 'asy
.. "sing electronic databases to trac% customer information *iolates federal laws
regarding indi*idual pri*acy.
Answer: False Page: 1- Difficulty: +ard
Hisrich, Entrepreneurship, Seventh Edition 37
Chapter 5 Creativity, the Business Idea, and Opportunity Analysis
Multiple Choice Questions
0. :hich of the following statements is true<
A= 1ustomers form the largest source of new ideas for entrepreneurs.
3= :hile members of the distribution channel may be willing to pro*ide new ideas
for entrepreneurs/ they may not help mar%et them.
1= !he Federal 5o*ernment is not a source of new ideas since the patent information
they collect is confidential.
D= 'stablishing a formal method for monitoring and e*aluating competiti*e products
and ser*ices on the mar%et.
Answer: D Page: 140 Difficulty: 'asy
2. Patents filed with the ".#. Patent $ffice:
A= fre7uently suggest other new products.
3= are the property of the ".#. 5o*ernment.
1= are not disclosed to the public.
D= are only accessible to public limited companies.
Answer: A Page: 140 Difficulty: Medium
&0. !he $ccupational #afety and +ealth Act >$#+A= mandated that first6aid %its be
a*ailable in business establishments employing more than three people. A newly
formed company was successful in de*eloping first6aid %its that allowed companies to
comply with the standards of the act. !his is an e,ample of:
A= distribution channels as an e,cellent source for new ideas.
3= e,isting products and ser*ices as a source for new ideas.
1= potential consumers as a source for new ideas.
D= go*ernment regulations as a source for new product ideas.
Answer: D Page: 140 Difficulty: Medium
&1. !he largest source of new product ideas is:
A= the ".#. Patent $ffice.
3= the entrepreneur8s research and de*elopment.
1= customers
D= the federal go*ernment.
Answer: 3 Page: 141 Difficulty: Medium
38 Hisrich, Entrepreneurship, Seventh Edition
Chapter 5 Creativity, the Business Idea, and Opportunity Analysis
&. Focus groups use which of the following methods<
A= A moderator leads the group in an open/ in6depth discussion.
3= A moderator as%s each indi*idual in the group 7uestions/ inter*iew style.
1= 'ach participant fills out a 7uestionnaire/ followed by indi*idual e,it inter*iews.
D= 'ach participant obtains new ideas and solutions by focusing on problems.
Answer: A Page: 14 Difficulty: +ard
&&. 3rainstorming groups should:
A= contain an e,pert in the field to be discussed.
3= be serious and wor%6oriented.
1= try to generate as many ideas as possible.
D= encourage criticism of ideas from other participants in the group.
Answer: 1 Page: 14 Difficulty: Medium
&4. ????? is not desirable when brainstorming is in process.
A= @Freewheeling@
3= 1riticism
1= 5enerating a large 7uantity of ideas
D= 4dea combination and impro*ement
Answer: 3 Page: 14 Difficulty: Medium
&(. 4n this method/ instead of generating new ideas themsel*es/ consumers are pro*ided
with a list of problems in a general product category. :hat method is the author
referring to here<
A= Ae*erse brainstorming
3= Problem in*entory analysis
1= 3rainstorming
D= Focus groups
Answer: 3 Page: 14& Difficulty: Medium
&-. 1reati*ity declines with
A= training and tradition.
3= education and wor% e,perience.
1= age/ education and lac% of use.
D= mental health and wor% e,perience.
Answer: 1 Page: 144 Difficulty: Medium
Hisrich, Entrepreneurship, Seventh Edition 39
Chapter 5 Creativity, the Business Idea, and Opportunity Analysis
&.. Probably the most well %nown and widely used techni7ue for creati*e problem sol*ing
is:
A= focus groups.
3= brainstorming.
1= forced relationships.
D= scientific method.
Answer: 3 Page: 144 Difficulty: Medium
&0. Ae*erse brainstorming is much li%e brainstorming e,cept that:
A= criticism is not allowed.
3= the techni7ue is based on finding solutions.
1= the group need not be careful to maintain good morale.
D= the process usually in*ol*es identification of e*erything wrong with an idea.
Answer: D Page: 144 Difficulty: Medium
&2. "sing ??????????? participants silently write their ideas on special forms that
circulate within the group.
A= brainstorming
3= re*erse brainstorming
1= brainwriting
D= chec%list method
Answer: 1 Page: 14( Difficulty: +ard
40. :hich of the following problem6sol*ing techni7ues begins with group members not
%nowing the e,act nature of the problem<
A= !he 5ordon method
3= Matri, charting
1= Parameter analysis
D= Free association
Answer: A Page: 14( Difficulty: +ard
41. 4n the ???????? method a new idea is de*eloped through a list of related issues or
suggestions.
A= 5ordon
3= chec%list
1= collecti*e noteboo%
D= matri, charting
Answer: 3 Page: 14( Difficulty: +ard
40 Hisrich, Entrepreneurship, Seventh Edition
Chapter 5 Creativity, the Business Idea, and Opportunity Analysis
4. 4n the ???????? method/ a word is written down/ then another/ creating a chain of
ideas.
A= re*erse brainstorming
3= matri, charting
1= heuristic
D= free association
Answer: D Page: 14- Difficulty: Medium
4&. :hich of the following creati*e methods in*ol*es ha*ing participants write down their
ideas se*eral times a day<
A= 1ollecti*e noteboo% method
3= Parameter analysis
1= 3rainstorming
D= Forced relationship
Answer: A Page: 14. Difficulty: Medium
44. !his problem6sol*ing method in*ol*es de*eloping new ideas by thin%ing without
constraints.
A= Balue analysis
3= Attribute listing
1= 3rainwriting
D= 3ig6dream approach
Answer: D Page: 14. Difficulty: Medium
4(. 1reati*e synthesis is an important aspect of the ????????? method of creati*e
problem sol*ing.
A= brainwriting
3= forced association
1= attribute listing
D= parameter analysis
Answer: D Page: 14. Difficulty: +ard
4-. 4n which stage of the product planning and de*elopment process would it be
appropriate to gi*e product samples to a panel of potential customers<
A= 4dea stage
3= 1oncept stage
1= Product de*elopment stage
D= 1ommerciali9ation stage
Answer: 1 Page: 1(0 Difficulty: +ard
Hisrich, Entrepreneurship, Seventh Edition 41
Chapter 5 Creativity, the Business Idea, and Opportunity Analysis
4.. !he stage in the product planning and de*elopment process in which actual sales
results are a*ailable is the:
A= idea stage.
3= concept stage.
1= product de*elopment stage.
D= test mar%eting stage.
Answer: D Page: 1(2 Difficulty: 'asy
40. $rders and sensiti*e information should be transferred:
A= through credit card companies.
3= by banner ads.
1= o*er secure ser*ers.
D= through open telephone lines.
Answer: 1 Page: 1-1 Difficulty: Medium
42 Hisrich, Entrepreneurship, Seventh Edition