New Venture Creation International Edition 6th Edition by Kathleen R. Allen – Test Bank
Chapter 4—Testing Business Concepts and Models
TRUE/FALSE
1. Drucker’s five questions are the basis for the development of the business concept.
ANS: F PTS: 1
2. Business concepts are developed quickly and can be funded and operational within two days.
ANS: F PTS: 1
3. A business concept is a concise description of an opportunity that contains seven essential elements.
ANS: F PTS: 1
4. Business models are doomed to failure when the underlying logic about the future is incorrect.
ANS: T PTS: 1
5. The value proposition is the benefit that the company derives from the product or service it will produce⎯in other words, it is the reason for the company to be in business.
ANS: F PTS: 1
6. Most businesses produce either a product or a service, but not both.
ANS: F PTS: 1
7. How to deliver the benefit to the customer is the issue addressed by the distribution channel element of the business concept.
ANS: T PTS: 1
8. Investors are moving away from written business plans in favor of a brief, well-constructed executive summary or pitch.
ANS: T PTS: 1
9. An effective business model should be built in seven stages.
ANS: F PTS: 1
10. Stage 3 of the business model is to calculate how to create value for the customer.
ANS: F PTS: 1
