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Question 1

What is the Business Model Canvas?

Answer 1

A framework to describe, design, and analyze how a firm creates, delivers, and captures value.

It helps visualize the components of a business model.

Question 2

Name the 9 building blocks of the Business Model Canvas.

Answer 2

• Customer Segments
• Value Proposition
• Channels
• Customer Relationships
• Revenue Streams
• Key Resources
• Key Activities
• Key Partnerships
• Cost Structure

These blocks represent the essential elements of a business model.

Question 3

What is the recommended order to fill the Business Model Canvas?

Answer 3

• Value Proposition
• Customer Segments
• Channels
• Customer Relationships
• Revenue Streams
• Key Resources
• Key Activities
• Key Partnerships
• Cost Structure

Following this order helps ensure a logical development of the business model.

Question 4

Why are the building blocks of the Business Model Canvas interdependent?

Answer 4

Changes in one block affect others (e.g. value proposition affects customer segments, channels, and revenue streams).

This interdependence highlights the complexity of business models.

Question 5

What is market penetration?

Answer 5

Increasing sales of existing products in existing markets.

This strategy focuses on gaining a larger share of the current market.

Question 6

What is market development?

Answer 6

Entering new markets with existing products.

This strategy aims to reach new customer segments.

Question 7

What is product development?

Answer 7

Introducing new products to existing markets.

This strategy focuses on innovation to meet current customer needs.

Question 8

What is diversification?

Answer 8

Entering new markets with new products.

This strategy is often considered the riskiest due to its complexity.

Question 9

Which growth strategy is the riskiest?

Answer 9

Diversification.

It involves entering unfamiliar markets and developing new products.

Question 10

What is the key trade-off between growth strategies?

Answer 10

Risk versus potential growth.

Each strategy carries different levels of risk and potential reward.

Question 11

What is effectuation?

Answer 11

A decision-making logic that starts from available means rather than predefined goals.

This approach emphasizes flexibility and adaptability in entrepreneurship.

Question 12

What are the core principles of effectuation?

Answer 12

• Means-driven action
• Affordable loss
• Partnerships
• Leveraging contingencies

These principles guide entrepreneurs in uncertain environments.

Question 13

What is the difference between effectuation and causation?

Answer 13

• Effectuation focuses on control and means
• Causation focuses on prediction and predefined goals

This distinction highlights different approaches to entrepreneurship.

Question 14

Why is Alex Krapp an example of effectuation?

Answer 14

He started with available means and adapted goals based on contingencies and partnerships.

His approach illustrates the flexibility inherent in effectuation.

Question 15

What is bootstrapping?

Answer 15

Financing a business using internal resources without external investors.

This method allows entrepreneurs to maintain full control over their business.

Question 16

What is venture capital?

Answer 16

External equity financing in exchange for ownership and control rights.

This funding source is often sought by startups for rapid growth.

Question 17

What is debt financing?

Answer 17

Borrowing money that must be repaid with interest.

This method can provide immediate capital but increases financial obligations.

Question 18

Main advantage of bootstrapping over VC?

Answer 18

Full control and no equity dilution.

Entrepreneurs retain ownership and decision-making power.

Question 19

Main disadvantage of VC?

Answer 19

Loss of control and equity dilution.

Investors may influence business decisions and ownership structure.

Question 20

How does Tina Seelig view failure?

Answer 20

As a necessary part of learning and innovation.

Embracing failure encourages risk-taking and creativity.

Question 21

Why is ‘never failing’ problematic?

Answer 21

It discourages risk-taking and learning.

A fear of failure can stifle innovation.

Question 22

How is failure linked to entrepreneurship?

Answer 22

Failure enables experimentation, learning, and innovation.

Entrepreneurs often learn from their mistakes to improve future endeavors.

Question 23

What is a leveraged buy-out (LBO)?

Answer 23

Acquisition of a company using a large amount of debt.

This strategy allows investors to buy companies with minimal equity.

Question 24

What is a management buy-out (MBO)?

Answer 24

An LBO where the existing management acquires the firm.

This often leads to a more committed management team.

Question 25

What is a **management buy-in (MBI)**?

Answer 25

An LBO where external managers acquire the firm. ## Footnote This can bring new perspectives and strategies to the company.

Question 26

Why is **debt** central in LBOs?

Answer 26

It increases leverage and potential returns but also risk. ## Footnote High debt levels can lead to significant financial strain.

Question 27

What is an **IT start-up**?

Answer 27

A young firm whose core value creation is based on IT or software. ## Footnote These companies often focus on technological innovation.

Question 28

One argument for classifying a firm as an **IT start-up**?

Answer 28

IT is central to its value proposition. ## Footnote This indicates that technology is integral to the business model.

Question 29

One argument against classifying a firm as an **IT start-up**?

Answer 29

IT is only a support function, not core. ## Footnote This suggests that the firm's primary value does not rely on technology.

Question 30

What is typically required in **exam answers**?

Answer 30

A balanced argument and a clear final classification. ## Footnote This demonstrates critical thinking and understanding of the topic.

Question 31

Name **Porter’s Five Forces**.

Answer 31

* Threat of new entrants * Threat of substitutes * Bargaining power of buyers * Bargaining power of suppliers * Competitive rivalry ## Footnote These forces analyze the competitive dynamics within an industry.

Question 32

What do the **Five Forces** analyze?

Answer 32

Industry attractiveness and competitive pressure. ## Footnote Understanding these forces helps businesses strategize effectively.

Question 33

Which force is often hardest to assess?

Answer 33

Threat of substitutes. ## Footnote Substitutes can emerge unexpectedly and impact market dynamics.

Question 34

Why are **Five Forces** not the same as competitive advantage?

Answer 34

They analyze industry structure, not firm-specific strengths. ## Footnote Competitive advantage is about how a firm differentiates itself within that structure.

Question 35

What is the core idea of the **Greiner model**?

Answer 35

Firms grow through phases, each followed by a crisis. ## Footnote This model illustrates the challenges businesses face as they scale.

Question 36

What causes **crises** in the Greiner model?

Answer 36

Organizational growth and increased complexity. ## Footnote As firms expand, they encounter new challenges that can lead to crises.

Question 37

Do you need to memorize all **phases**?

Answer 37

No, only the general growth–crisis logic. ## Footnote Understanding the overall concept is more important than memorizing details.

Question 38

What is the purpose of **patents**?

Answer 38

Protect innovations from imitation. ## Footnote Patents provide legal rights to inventors to safeguard their creations.

Question 39

Which industries are least likely to **patent**?

Answer 39

Fast-moving software and IT industries. ## Footnote These sectors prioritize speed and innovation over legal protections.

Question 40

Why might firms avoid **patents**?

Answer 40

Innovation speed may be more important than legal protection. ## Footnote In rapidly changing markets, time-to-market can be critical.

Question 41

What are **complementary assets**?

Answer 41

Assets needed to commercialize an innovation. ## Footnote These assets enhance the value of an innovation and are crucial for success.

Question 42

Why are **complementary assets** important?

Answer 42

They determine who captures value from innovation. ## Footnote Access to these assets can influence the success of an innovation.

Question 43

Give an example of **complementary assets**.

Answer 43

* Manufacturing * Distribution * Regulatory approval in pharma ## Footnote These assets are essential for bringing innovations to market.

Question 44

What is **Kickstarter**?

Answer 44

A reward-based crowdfunding platform. ## Footnote It allows creators to fund projects through public contributions.

Question 45

What value does **Kickstarter** offer entrepreneurs?

Answer 45

* Funding * Market validation * Visibility ## Footnote These benefits can help entrepreneurs launch and promote their projects.

Question 46

How does **Kickstarter** make money?

Answer 46

Percentage fee on successful campaigns. ## Footnote This model incentivizes the platform to support successful projects.

Question 47

When does **crowdfunding** make sense?

Answer 47

For early-stage products with strong consumer appeal. ## Footnote It is particularly effective for innovative ideas that resonate with the public.