SPP Innovation & Growth Strategy 3 â Questions and Answers
Question 1: A startup uses a minimum viable product (MVP) to test assumptions with real customers before full-scale development. This practice originates from which methodology?
- Six Sigma
- Lean Startup (Correct answer)
- Waterfall SDLC
- Theory of Constraints
Correct answer: Lean Startup
Eric Ries's Lean Startup methodology centers on the Build-Measure-Learn loop with MVPs to validate hypotheses with minimum waste.
Question 2: Which metric best measures whether a new product innovation is gaining genuine traction with customers beyond early adopters?
- Total revenue
- Net Promoter Score of beta testers
- Cohort retention rate over 90 days (Correct answer)
- Number of press mentions
Correct answer: Cohort retention rate over 90 days
Cohort retention over 90 days shows whether new users continue engaging after novelty wears off, distinguishing real traction from a curiosity spike.
Question 3: Platform business models create value primarily by facilitating interactions between which parties?
- Shareholders and regulators
- Two or more distinct user groups (Correct answer)
- Suppliers and internal operations
- Executives and board members
Correct answer: Two or more distinct user groups
Platforms (e.g., Uber, Airbnb, Apple App Store) orchestrate exchanges between two or more distinct sidesâproducers and consumersâgenerating network effects.
Question 4: A firm earns high market share in a fast-growing market. According to the BCG matrix, this business unit is classified as a:
- Cash cow
- Dog
- Star (Correct answer)
- Question mark
Correct answer: Star
Stars have high relative market share in high-growth markets; they typically require continued investment but are expected to become cash cows as growth slows.
Question 5: The concept of 'ambidexterity' in corporate innovation refers to an organization's ability to simultaneously:
- Operate in two geographies at once
- Exploit current capabilities and explore new opportunities (Correct answer)
- Use two different pricing models
- Manage both B2B and B2C channels
Correct answer: Exploit current capabilities and explore new opportunities
Organizational ambidexterityâcoined by O'Reilly and Tushmanâis the capacity to exploit mature businesses for cash while simultaneously exploring innovations that may cannibalize them.
Question 6: Which of the following best describes a 'beachhead market' strategy in new market entry?
- Launching in all segments simultaneously to maximize coverage
- Targeting a small, winnable niche first to establish a stronghold before expanding (Correct answer)
- Pricing below cost to drive out competitors
- Acquiring the market leader to gain instant scale
Correct answer: Targeting a small, winnable niche first to establish a stronghold before expanding
A beachhead market strategy focuses resources on dominating a small, underserved segment first, then using that foothold to expand into adjacent segments.
Question 7: When evaluating an innovation portfolio, which framework balances risk and return by categorizing investments into core, adjacent, and transformational buckets?
- McKinsey's Three Horizons (Correct answer)
- Balanced Scorecard
- SWOT Analysis
- Kano Model
Correct answer: McKinsey's Three Horizons
McKinsey's Three Horizons framework allocates innovation investment across Horizon 1 (core), Horizon 2 (adjacent), and Horizon 3 (transformational) to balance near-term returns with long-term growth.
SPP Innovation & Growth Strategy 3
A startup uses a minimum viable product (MVP) to test assumptions with real customers before full-scale development.
This practice originates from which methodology?