CSM CSM Innovation & Business Development 2 — Questions and Answers
Question 1: What is 'open innovation' in the context of strategic management?
- Publishing all internal research without intellectual property protection
- Leveraging external ideas, partners, and paths to market alongside internal R&D (Correct answer)
- Providing employees with unrestricted access to all company data
- Making product source code freely available to the public
Correct answer: Leveraging external ideas, partners, and paths to market alongside internal R&D
Open innovation is a paradigm where organizations use inflows and outflows of knowledge—from customers, startups, universities, and partners—to accelerate internal innovation.
Question 2: The Business Model Canvas was primarily designed to help organizations:
- Calculate break-even point and profitability thresholds
- Visualize, design, and challenge how a business creates and delivers value (Correct answer)
- Document organizational hierarchy and reporting relationships
- Manage project timelines and resource allocation
Correct answer: Visualize, design, and challenge how a business creates and delivers value
The Business Model Canvas by Osterwalder provides a one-page visual framework covering nine building blocks that collectively describe how a business creates, delivers, and captures value.
Question 3: A 'first-mover advantage' in strategic management refers to:
- The competitive edge gained by being the first to implement a specific management style
- Benefits gained by the first company to enter a new market or product category (Correct answer)
- Priority access to raw materials secured through early supplier contracts
- Regulatory protection granted to early-stage startups by the government
Correct answer: Benefits gained by the first company to enter a new market or product category
First-mover advantage allows a company to build brand recognition, customer loyalty, and economies of scale before competitors enter the market.
Question 4: In Ansoff's Growth Matrix, 'market penetration' refers to:
- Entering new geographic markets with existing products
- Selling existing products to existing markets more aggressively (Correct answer)
- Developing new products for existing customers
- Diversifying into unrelated new businesses
Correct answer: Selling existing products to existing markets more aggressively
Market penetration involves increasing sales of existing products in existing markets through tactics like price reductions, promotions, or improved distribution.
Question 5: What distinguishes 'intrapreneurship' from entrepreneurship?
- Intrapreneurs operate with unlimited budgets while entrepreneurs face financial constraints
- Intrapreneurship involves entrepreneurial activity within an established organization (Correct answer)
- Entrepreneurs focus on technology while intrapreneurs focus on process improvement
- Intrapreneurship requires government approval while entrepreneurship does not
Correct answer: Intrapreneurship involves entrepreneurial activity within an established organization
Intrapreneurship refers to employees acting entrepreneurially within an existing company, innovating new products or processes while leveraging organizational resources.
Question 6: Which growth strategy involves expanding into new markets using products already in a company's portfolio?
- Product development
- Diversification
- Market development (Correct answer)
- Market penetration
Correct answer: Market development
Market development involves taking existing products into new customer segments or geographic markets to grow revenue without developing new offerings.
CSM CSM Innovation & Business Development 2
What is 'open innovation' in the context of strategic management?