Test: Entrepreneurial Planning- 2 - CUET Commerce MCQ

Business opportunity can be described as an economic idea which can be implemented to create a business enterprise and earn profits.
Elements of Business opportunity:

• Assured market scope,
• An attractive and acceptable rate of return on investment
• Practicability of the entrepreneur to encash it
• Competence of the entrepreneur to encash it
• Potential of future growth

McDonald's is a classic example of successful implementation of the red ocean strategy in the fiercely competitive fast-food industry characterised by aggressive discounts, new product variations and high-profile commercials. All McDonald's did was offer superior-quality burgers with fresh ingredients in a traditionally styled restaurant and maintain a low profile. In the food business, where authenticity is paramount, McDonald's delivered.

Productivity management is concerned with maximising productivity and observes how efficiently a process runs and how effectively it uses resources because high productivity leads to greater profits and higher income for workers of the organisation. It has been observed that in India only few organisations achieve the satisfactory level of productivity.

Price-skimming strategies involve charging a high price for your product or service at the start to cover initial costs like production, manufacturing, and marketing. Usually, this approach makes sense for a business introducing something that hasn't been done before and that's worth a higher price. The advantage of a pricing policy is the ability to make your product appealing to customers, while covering costs.

Concept phase of innovation involves intensive analysis in order to gather as much information as possible about the idea and its further processing. It involves analysis related to market and customer requirements, market potential, e.g. market size; market attractiveness, chances, e.g. differentiation possibilities for the competition; risks and feasibility, e.g. technical feasibility, and market entry barriers; and framework conditions, e.g. laws, standards and patents.
Hence, option 2 is correct.

The three elements of idea management are: culture, system and process.

• Culture
  Create a culture that values and actively encourages the contribution of feedback, suggestions, insights and observations, no matter how seemingly small or inconsequential.
• System
  Provide a receptacle for catching and storing all of these thoughts, one that is easily accessible and intuitive to use.
• Process
  Develop a clear process that enables us to rationally and reasonably filter through these ideas, against our clearly defined business goals and priorities.

An LLC is a business entity with all the protection of a corporation plus the ability to pass through any business profits and losses to your personal income tax return. An LLC is a hybrid type of business structure where the owners of the LLC are called 'members,' and all enjoy the advantages that an LLC has to offer. The advantages are:
(a) Personal protection from the operations of the business
(b) Ability to reserve a business name and create a formal brand
(c) Documentation of the relationship in a partnership via operating agreement.

Innovation structures are the processes and infrastructure that support an organisation's capabilities.
To encourage and assess the performance of your innovation structures, measure aspects of your organisation like dedicated R&D, innovation spend, and the time an idea spends in each stage of your innovation pipeline.

An innovation funnel is a tool or a process that helps ensure that only the best ideas are executed. It is a type of funnel that screens innovative ideas for viability and profitability so that only the best products, processes, propositions, or business models are realised.
Generally, as with any other type of funnel, an innovation funnel has three parts:

• The wide mouth
• The narrowing section
• The narrow part

In the context of element of innovative management system, the organisation should track external and internal issues and trends, e.g. user preferences, technology developments, and internal capabilities, in order to identify opportunities and challenges that can trigger innovation activities.