CSM CSM Innovation & Business Development 1 — Questions and Answers
Question 1: What is the primary goal of disruptive innovation?
- Improving existing products for current customers
- Creating simpler, more affordable solutions that displace established competitors (Correct answer)
- Increasing production efficiency through automation
- Expanding distribution channels to new geographic markets
Correct answer: Creating simpler, more affordable solutions that displace established competitors
Disruptive innovation introduces simpler, affordable solutions that initially target overlooked segments before eventually displacing incumbent competitors.
Question 2: Which framework helps organizations evaluate whether to build, buy, or partner when pursuing new business opportunities?
- Porter's Five Forces
- SWOT Analysis
- Make-or-Buy-or-Ally framework (Correct answer)
- Ansoff Matrix
Correct answer: Make-or-Buy-or-Ally framework
The Make-or-Buy-or-Ally framework guides strategic decisions about whether to develop capabilities internally, acquire them, or form partnerships.
Question 3: What does 'blue ocean strategy' describe?
- Competing aggressively in saturated markets to gain market share
- Creating uncontested market space by making competition irrelevant (Correct answer)
- Reducing costs to undercut all existing competitors
- Expanding internationally into developing economies
Correct answer: Creating uncontested market space by making competition irrelevant
Blue ocean strategy focuses on creating new market demand in uncontested space rather than fighting over existing demand in competitive 'red ocean' markets.
Question 4: In business development, a 'value proposition' is best described as:
- A legal contract outlining service terms and pricing
- A clear statement of how a product solves customer problems and delivers benefits (Correct answer)
- A financial projection showing return on investment
- A marketing campaign targeting a specific demographic
Correct answer: A clear statement of how a product solves customer problems and delivers benefits
A value proposition articulates the unique benefits a product or service delivers to customers and why they should choose it over alternatives.
Question 5: What is the primary purpose of a 'stage-gate process' in new product development?
- To accelerate product launches by skipping unnecessary reviews
- To provide structured checkpoints where projects are evaluated before advancing (Correct answer)
- To assign ownership of each development phase to a specific department
- To standardize product features across all market segments
Correct answer: To provide structured checkpoints where projects are evaluated before advancing
A stage-gate process divides product development into stages separated by gates where management evaluates progress and decides whether to continue, redirect, or kill the project.
Question 6: Which metric best indicates the health of an organization's innovation pipeline?
- Employee satisfaction score
- Number of patent filings and new product revenue as a percentage of total revenue (Correct answer)
- Customer acquisition cost
- Net promoter score
Correct answer: Number of patent filings and new product revenue as a percentage of total revenue
Patents filed and new product revenue as a share of total revenue together indicate both the generation of novel ideas and the commercial success of innovation efforts.
CSM CSM Innovation & Business Development 1
What is the primary goal of disruptive innovation?