CME CME Innovation & Entrepreneurship 1 — Questions and Answers
Question 1: Clayton Christensen's theory of 'disruptive innovation' describes innovations that:
- Improve existing products for current customers
- Initially serve niche or underserved markets before displacing incumbents (Correct answer)
- Require massive R&D investments to develop
- Are adopted simultaneously across all market segments
Correct answer: Initially serve niche or underserved markets before displacing incumbents
Disruptive innovations start by serving overlooked customer segments with simpler, cheaper solutions, eventually moving upmarket to displace established competitors.
Question 2: Which business model canvas component describes the value a company delivers to its customers?
- Revenue Streams
- Customer Segments
- Value Proposition (Correct answer)
- Key Resources
Correct answer: Value Proposition
The Value Proposition describes the bundle of products and services that create value for a specific customer segment, solving their problems or fulfilling needs.
Question 3: In entrepreneurship, what does the 'lean startup' methodology primarily emphasize?
- Securing large amounts of venture capital before launching
- Building a complete product before testing market fit
- Rapid experimentation, validated learning, and iterative product releases (Correct answer)
- Hiring experienced teams before developing a product
Correct answer: Rapid experimentation, validated learning, and iterative product releases
The lean startup methodology, developed by Eric Ries, emphasizes build-measure-learn cycles to validate business assumptions quickly with minimal resource waste.
Question 4: What is a 'Minimum Viable Product' (MVP) in the context of innovation management?
- The lowest-cost version of a product
- A product with enough features to attract early adopters and validate key assumptions (Correct answer)
- A prototype only shown to internal teams
- The final version of a product before full launch
Correct answer: A product with enough features to attract early adopters and validate key assumptions
An MVP is a product with just enough features to satisfy early customers and provide feedback for future development, minimizing wasted effort.
Question 5: Which innovation type improves existing products or services within an established market without changing the fundamental business model?
- Disruptive Innovation
- Incremental Innovation (Correct answer)
- Architectural Innovation
- Radical Innovation
Correct answer: Incremental Innovation
Incremental innovation involves making continuous, minor improvements to existing products, services, or processes without fundamentally changing the core business model.
Question 6: In the context of corporate innovation, what is an 'intrapreneurship' program designed to do?
- Recruit external startup founders
- Encourage employees to develop entrepreneurial ideas within the organization (Correct answer)
- Outsource product development to startups
- Restructure the company into independent subsidiaries
Correct answer: Encourage employees to develop entrepreneurial ideas within the organization
Intrapreneurship programs empower employees to act like entrepreneurs within a larger organization, fostering innovation without the full risk of starting a new venture.
CME CME Innovation & Entrepreneurship 1
Clayton Christensen's theory of 'disruptive innovation' describes innovations that: