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BGCSE BSSE Entrepreneurship (1441) study materials
BGCSE BSSE Entrepreneurship (1441) study resources

BGCSE BSSE Entrepreneurship (1441) practice questions

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Question 1Entrepreneurial mindset, characteristics and self-employment

A young shop owner loses a major customer but keeps contacting new suppliers and reopens the next week. Which personal quality does this best illustrate?

  1. Memorising set procedures
  2. Obedience
  3. Resilience Correct answer.
  4. Punctuality

Explanation

Resilience is the capacity to recover from setbacks and continue working towards a goal. Small business owners regularly face rejected orders, lost customers and cash shortages, so the ability to keep going after failure matters more than routine habits.

Question 2Entrepreneurial mindset, characteristics and self-employment

Which statement best describes self-employment?

  1. Earning income by running your own business Correct answer.
  2. Being paid an hourly wage set by a trade union
  3. Working for a large company on a permanent contract
  4. Doing unpaid voluntary work for a charity

Explanation

Self-employment means a person owns and operates the activity that generates income and is rewarded through profit rather than a wage agreed with an employer. The individual carries the decisions and the financial risk of the venture.

Question 3Entrepreneurial mindset, characteristics and self-employment

Which of the following is a common advantage of being self-employed?

  1. Freedom to make your own decisions Correct answer.
  2. A company pension on retirement
  3. A salary that is guaranteed every month
  4. Paid annual leave provided each year

Explanation

A self-employed owner chooses what to sell, what prices to charge and when to work, and keeps any profit the venture makes. Guaranteed pay, paid holidays and employer pensions are benefits that come with a job, not with running a business.

Question 4Entrepreneurial mindset, characteristics and self-employment

A trader notices that fishermen throw away fish bones and begins selling them to a factory that makes animal feed. Which entrepreneurial skill is shown?

  1. Record keeping
  2. Delegation
  3. Spotting an opportunity Correct answer.
  4. Budgeting

Explanation

Opportunity recognition is the ability to notice an unmet need or a wasted resource and turn it into something customers will pay for. The trader saw value in discarded fish bones and linked the fishermen with a buyer who needed the material.

Question 5Entrepreneurial mindset, characteristics and self-employment

An entrepreneur uses a small market stall to test demand before renting a shop. Which idea does this best demonstrate?

  1. Ignoring market research
  2. Copying a competitor's plan
  3. Avoiding every form of risk
  4. Taking a calculated risk Correct answer.

Explanation

A calculated risk involves judging likely gains against possible losses and limiting how much can be lost. Testing with a low-cost stall keeps the downside small before the owner commits to the larger expense of shop rent.

Question 6Entrepreneurial mindset, characteristics and self-employment

A bakery employee suggests a new gluten-free bread line and develops it using the company's ovens and staff. This employee is best described as:

  1. An auditor
  2. A shareholder
  3. A silent partner
  4. An intrapreneur Correct answer.

Explanation

An intrapreneur is an employee who uses an organisation's resources to create new products or better processes. The baker innovates inside the existing company instead of leaving to start a separate venture.

Question 7Entrepreneurial mindset, characteristics and self-employment

Which method gives the most reliable evidence about whether customers will buy a new product?

  1. Assuming demand because the owner likes it
  2. Copying what a distant competitor sells
  3. Running a trial sale with target customers Correct answer.
  4. Asking only relatives for their opinion

Explanation

A trial sale records what real buyers actually do with their money, which is stronger evidence than opinions or guesswork. Owners should test with people who match the intended market rather than with a convenient group such as family.

Question 8Entrepreneurial mindset, characteristics and self-employment

Which statement best distinguishes an entrepreneur from an employee?

  1. An entrepreneur is paid a fixed weekly wage
  2. An entrepreneur always earns more money than an employee
  3. An entrepreneur bears the financial risk Correct answer.
  4. An entrepreneur never works with other people

Explanation

The defining difference is that an owner puts personal money and time at stake and is paid out of whatever profit remains after costs. An employee exchanges work for an agreed wage and does not absorb the losses of the business.

Question 9Entrepreneurial mindset, characteristics and self-employment

A young person finds strong demand for a phone repair service, but the tools cost more than her savings. Which next step is most appropriate?

  1. Prepare a simple business plan and apply for a small loan Correct answer.
  2. Drop the idea because equipment costs money
  3. Start trading at once and ignore the costs
  4. Borrow from a moneylender at a very high interest rate

Explanation

High demand plus equipment priced above savings means the venture needs funding and a clear case for it. A short plan setting out costs, prices and repayment shows a lender the risk is managed and the loan can be serviced from trading income.

Question 10Entrepreneurial mindset, characteristics and self-employment

A salaried worker resigns to open a shop. Which pair best states the likely financial trade-off?

  1. Loss of steady income and gain of possible profit Correct answer.
  2. Loss of decision-making power and gain of paid leave
  3. Gain of a company pension and loss of customers
  4. Gain of a guaranteed income and loss of independence

Explanation

Leaving paid work exchanges security for opportunity: the wage disappears and the owner's reward becomes whatever profit the shop can make. Independence grows, but so does the risk that sales will be too low to cover costs.

Question 11Entrepreneurial mindset, characteristics and self-employment

Which entrepreneurial characteristic is shown when a person starts a business without knowing whether customers will respond?

  1. Strict obedience to rules
  2. Preference for routine tasks
  3. Reliance on others for decisions
  4. Tolerance of uncertainty Correct answer.

Explanation

Tolerance of uncertainty is the willingness to act and keep going even when information is incomplete and outcomes are not guaranteed. Starting a business without first knowing customer response requires accepting that uncertainty rather than waiting for certainty. The other options describe habits that avoid independent judgement or change.

Question 12Entrepreneurial mindset, characteristics and self-employment

A self-employed dressmaker wants to know each month whether she is making a profit. Which skill should she apply?

  1. Bookkeeping Correct answer.
  2. Interior design
  3. Vehicle repair
  4. Public speaking

Explanation

Bookkeeping records money received and money spent so that a self-employed person can compare income with expenses and work out profit. A dressmaker needs this financial record-keeping skill to judge the health of the business each month. The other skills do not produce the figures needed for a profit calculation.

Question 13Entrepreneurial mindset, characteristics and self-employment

Which term means the ability to begin useful tasks without waiting to be told?

  1. Obedience
  2. Luck
  3. Inheritance
  4. Initiative Correct answer.

Explanation

Initiative is the readiness to take the first step and act on an opportunity without needing instructions from someone else. It is a core entrepreneurial habit because self-employed people often have no supervisor telling them what to do next. The other terms do not describe self-directed action.

Question 14Entrepreneurial mindset, characteristics and self-employment

An entrepreneur has savings that cover six months of living costs. She is considering leaving her job to open a repair shop. Which approach best shows calculated risk-taking?

  1. Testing part-time while keeping savings for essentials Correct answer.
  2. Waiting indefinitely until every risk disappears
  3. Borrowing money without estimating sales or costs
  4. Resigning at once and buying a luxury car

Explanation

Calculated risk-taking means weighing possible losses against available information and resources before acting. Testing the repair service part-time while protecting essential savings limits the downside and allows the entrepreneur to learn from real customers. The other approaches either ignore the risk or refuse to act at all.

Question 15Entrepreneurial mindset, characteristics and self-employment

A young photographer wants more wedding clients but has a small advertising budget. Which action best uses networking?

  1. Waiting for clients to find her through luck
  2. Lowering prices until no profit remains
  3. Printing flyers and leaving them on empty streets at night
  4. Attending local wedding fairs and exchanging contacts with planners Correct answer.

Explanation

Networking builds relationships with people who can recommend or refer a self-employed person to customers. Wedding planners and fair exhibitors are well placed to pass the photographer's details to couples who need a photographer. The other actions either waste money, destroy profit, or rely on chance.

Question 16Entrepreneurial mindset, characteristics and self-employment

A self-employed mechanic works on a public holiday instead of attending a paid training course that could attract new customers. What is the opportunity cost of working that day?

  1. The income tax paid on the money earned from repairs
  2. The money earned from completing the holiday repair jobs
  3. The chance to gain new skills from the course Correct answer.
  4. The cost of the tools that were used during the repairs

Explanation

Opportunity cost is the value of the next best alternative that is given up when a choice is made. By working, the mechanic gives up the training course and the future customer-attracting skills it could provide. Money earned, tool costs, and tax are not the alternative forgone.

Question 17Entrepreneurial mindset, characteristics and self-employment

A small bakery receives repeated complaints that its bread is stale by afternoon. Which response best shows a customer-focused entrepreneurial mindset?

  1. Blame customers for choosing to buy late in the day
  2. Adjust baking times and offer afternoon-baked batches Correct answer.
  3. Raise prices to cover the cost of handling complaints
  4. Ignore the complaints because the bread sells well in the morning

Explanation

A customer-focused mindset treats complaints as useful information about what buyers value and then changes the offer to meet that need. Adjusting baking times and providing fresh afternoon batches directly addresses the reason for dissatisfaction. The other responses dismiss or penalise the customers instead of improving the product.

Question 18Entrepreneurial mindset, characteristics and self-employment

A young entrepreneur wants a bank loan for a poultry farm. Which document best explains the market, costs, and expected income to the lender?

  1. A receipt for one bag of feed
  2. A personal diary of daily tasks
  3. A list of favourite chicken recipes
  4. A business plan with financial forecasts Correct answer.

Explanation

A business plan sets out the market for the product, the costs involved, and projected income, which are the facts a lender needs to judge repayment ability. It gives a structured picture of the venture rather than isolated personal records. The other documents provide no complete financial or market case.

Question 19Entrepreneurial mindset, characteristics and self-employment

Two self-employed tailors lose an important contract. Tailor A says, “The market is against me; nothing I do matters.” Tailor B says, “I will ask customers what went wrong and improve my offer.” Which statement best explains the difference?

  1. Both tailors show equal entrepreneurial self-confidence in this situation
  2. Tailor A shows an internal locus of control by accepting the contract loss calmly
  3. Tailor B avoids personal responsibility by asking customers for their opinions
  4. Tailor B shows an internal locus of control by acting to improve results Correct answer.

Explanation

An internal locus of control is the belief that one's own actions can influence outcomes. Tailor B turns the loss into a problem to investigate and improve, while Tailor A attributes events to outside forces and feels powerless. Asking customers for feedback is a responsible search for solutions, not an avoidance of responsibility.

Question 20Entrepreneurial mindset, characteristics and self-employment

A self-employed phone repairer finds a cheap replacement screen that often fails within a week. Using it would double his profit this month. Which decision best reflects long-term entrepreneurial thinking?

  1. Use the cheap screen and hide the failure rate from all buyers
  2. Stop repairing phones entirely so as to avoid making the choice
  3. Use the cheap screen but deny responsibility when customers return
  4. Explain the screen's quality and offer a graded repair option Correct answer.

Explanation

Long-term entrepreneurial thinking weighs reputation, repeat business, and customer trust against a short-term profit gain. Being honest about screen quality and offering a choice lets customers decide while protecting the repairer's name. Hiding failures or denying responsibility may raise immediate income but damages future trade.

Question 21Entrepreneurial mindset, characteristics and self-employment

A young entrepreneur sets a daily target of 30 sales, records each day's result, and raises the target after reaching it. Which entrepreneurial characteristic does this behaviour best show?

  1. Reliance on luck
  2. Preference for leisure
  3. Need for achievement Correct answer.
  4. Avoidance of competition

Explanation

A person with a strong need for achievement sets challenging but attainable goals and seeks feedback on progress, which is exactly what the daily target and record-keeping show. The behaviour is about measuring and improving personal performance, not about luck or avoiding rivals. Raising the target after success reflects a continuing drive to accomplish more.

Question 22Entrepreneurial mindset, characteristics and self-employment

A carpenter fills a notebook with unusual furniture designs but never builds or prices any of them for customers. Which entrepreneurial step is missing?

  1. Creativity
  2. Perseverance
  3. Innovation Correct answer.
  4. Self-confidence

Explanation

Creativity is generating original ideas, which the notebook already shows. Innovation is putting a creative idea into practice as a product, service, or process that customers can use and pay for. Until a design is built, priced, and offered, it remains an idea rather than an innovation.

Question 23Entrepreneurial mindset, characteristics and self-employment

A self-employed hairdresser makes a profit and wants to buy a car. Instead, she buys a second styling chair and pays for an assistant's training so the salon can serve more clients. Which characteristic does this best show?

  1. Delayed gratification Correct answer.
  2. Fear of competition
  3. Desire for short-term comfort
  4. Distrust of employees

Explanation

Delayed gratification means giving up an immediate personal reward in order to gain a larger benefit later. The hairdresser forgoes the car now so that extra capacity and trained help can raise future income. This is a deliberate investment choice rather than a fear of rivals or a dislike of staff.

Question 24Entrepreneurial mindset, characteristics and self-employment

A caterer has promoted a new vegetarian menu for three months without a single order and has spent most of her savings on advertising. Which action best shows perseverance rather than stubbornness?

  1. Borrowing more money to repeat the same adverts
  2. Giving up catering work altogether
  3. Reviewing evidence and adapting the offer Correct answer.
  4. Repeating the same campaign for another year

Explanation

Perseverance involves continuing to pursue a goal while adjusting methods in response to evidence, whereas stubbornness means repeating a failing approach regardless of results. Three months without an order is evidence that the current promotion is not working, so a persevering caterer would test the menu more cheaply and decide on a review date. Simply repeating the same costly campaign or giving up completely avoids learning from the evidence.

Question 25Business opportunity identification and idea development

Which statement best explains the difference between a business idea and a business opportunity?

  1. An idea becomes an opportunity when buyers will pay a profitable price. Correct answer.
  2. A business idea is only valid once a bank has approved a loan for it.
  3. A business opportunity exists only when a completely new invention is created.
  4. Business ideas and business opportunities are two names for the same thing.

Explanation

An idea is simply a thought about a product or service that might be offered. It becomes an opportunity only when real customers want it, the price they will pay covers costs, and the entrepreneur can actually deliver the offer. Without demand and profitability, the idea stays untested and unproven.

Question 26Business opportunity identification and idea development

Which of the following is an internal source of business ideas for a young entrepreneur?

  1. Reports about rival firms in a trade magazine
  2. The entrepreneur's own hobbies, skills and daily problems Correct answer.
  3. National trade statistics published by the government
  4. Complaints printed on a newspaper's letters page

Explanation

Internal sources come from the entrepreneur's own knowledge and experience, such as hobbies, technical skills and problems met in daily life. External sources lie outside the person and include government statistics, trade publications, competitor activity and customer complaints collected from the market.

Question 27Business opportunity identification and idea development

A village with 4,000 residents has no pharmacy, so people travel thirty kilometres to buy medicine. What does this situation best describe?

  1. A weakness in the entrepreneur's personal skills
  2. A threat created by substitute products
  3. A market that is already saturated with competitors
  4. A market gap that could support a new business Correct answer.

Explanation

A market gap exists when customers need something that current suppliers do not provide. The long journey shows unmet demand plus a cost in time and money that a local pharmacy could remove. The gap becomes an opportunity only if enough residents can pay a price that covers costs.

Question 28Business opportunity identification and idea development

Which behaviour follows the accepted rules for a brainstorming session that generates business ideas?

  1. Criticising weak suggestions immediately so the list stays short
  2. Allowing only the most senior person to contribute ideas
  3. Recording every suggestion and judging them after the session Correct answer.
  4. Stopping the session as soon as one workable idea appears

Explanation

Brainstorming deliberately separates idea generation from evaluation. Participants aim to produce many ideas, build on one another's suggestions and suspend criticism until the session ends. Judging the list afterwards allows unusual suggestions to be explored before they are screened.

Question 29Business opportunity identification and idea development

An entrepreneur has twenty ideas and must choose one to develop first. Which screening question is most useful at this stage?

  1. Which idea would look most attractive on a business card?
  2. Will the shop need a painted sign above the door?
  3. How many ideas do rival owners usually generate?
  4. Does it fit my skills and resources and attract enough buyers? Correct answer.

Explanation

Screening compares ideas against practical criteria such as the entrepreneur's skills, available finance, access to supplies, and the size and buying power of the target market. Ideas that fail these tests are dropped early, before time and money are spent developing them.

Question 30Business opportunity identification and idea development

Before buying juice-making equipment, an entrepreneur wants direct evidence that customers will pay for a new fruit blend. Which action provides that evidence?

  1. Designing a bright label for the bottle
  2. Asking close friends whether they generally enjoy fruit juice
  3. Selling samples at a market stall for two weeks and recording sales Correct answer.
  4. Reading a magazine article about healthy drinks

Explanation

Direct evidence of demand comes from real customers parting with money. A trial stall tests whether people will pay the intended price and gives feedback on taste, portion size and packaging. Friends' opinions and general articles are indirect and cannot confirm willingness to pay.

Question 31Business opportunity identification and idea development

A bakery learns that a large supermarket nearby will soon sell bread at much lower prices. In a SWOT analysis, this information is best recorded as:

  1. A strength
  2. A weakness
  3. An opportunity
  4. A threat Correct answer.

Explanation

SWOT analysis sorts factors into internal strengths and weaknesses and external opportunities and threats. A rival's lower prices come from outside the bakery and could reduce its sales, so the factor is a threat. Strengths and weaknesses describe the business itself, such as its skills, reputation and equipment.

Question 32Business opportunity identification and idea development

Two bakeries trade on the same street. The newer one cannot match the older bakery's low prices. Which approach best builds a lasting competitive advantage?

  1. Offer a distinct product or service the rival does not sell Correct answer.
  2. Spend all the start-up capital on a very large signboard
  3. Copy the rival's recipes and sell at the same low prices
  4. Lower quality so that costs fall below the rival's

Explanation

Competitive advantage comes from doing something customers value that rivals cannot easily copy. Because the new bakery cannot win on price, it should compete on differentiation such as unique products, better service or a clearly defined target market. Matching a stronger rival's price would only produce losses.

Question 33Business opportunity identification and idea development

A start-up has designed a solar phone charger for rural households with unreliable electricity and very low incomes. Which factor most directly decides whether this idea can become a profitable opportunity?

  1. The colour of the casing chosen for the charger
  2. The size of the instructions printed on the box
  3. Whether households can pay a price that covers production costs Correct answer.
  4. The number of followers the company has on social media

Explanation

An opportunity is only real if the target customers can afford a price that covers costs and leaves a margin. In a low-income market, affordability decides how many units can be sold and whether the venture survives. Features such as casing colour or social media reach affect promotion but not the core economics.

Question 34Business opportunity identification and idea development

A plan shows strong demand and sufficient finance, but the key machine is unavailable locally and nobody in the team can operate it. Which aspect of feasibility is weakest?

  1. Financial feasibility
  2. Technical feasibility Correct answer.
  3. Legal feasibility
  4. Market feasibility

Explanation

Technical feasibility asks whether the business can actually produce or deliver what it promises with the equipment, skills and technology available. A machine that cannot be obtained and missing operating skills point directly to this gap. The scenario already reports that demand and finance are satisfactory.

Question 35Business opportunity identification and idea development

Which part of a feasibility study examines whether enough customers exist and are willing to buy the product?

  1. Operational feasibility
  2. Technical feasibility
  3. Financial feasibility
  4. Market feasibility Correct answer.

Explanation

Market feasibility focuses on demand: the number of potential customers, their needs and their willingness to pay. Technical feasibility covers equipment and skills, financial feasibility covers funding and returns, and operational feasibility covers day-to-day running. Demand must be established before the other parts are examined in depth.

Question 36Business opportunity identification and idea development

A young entrepreneur reads a government report that predicts strong growth in solar energy. Which source of business ideas does this represent?

  1. Published information Correct answer.
  2. Mind mapping
  3. Personal hobby
  4. Family experience

Explanation

Published information such as government reports, market studies and trade magazines is an external source of business ideas. It gives the entrepreneur data about trends that he or she has not personally observed. Hobbies and family experience are internal sources, while mind mapping is a creativity technique rather than a source of information.

Question 37Business opportunity identification and idea development

What is a niche market?

  1. A market where many firms sell identical products at low prices
  2. A market that only sells goods to other businesses
  3. A small, specific segment of customers with particular needs Correct answer.
  4. A market controlled entirely by one large supplier

Explanation

A niche market is a narrow segment of a larger market made up of customers with specialised needs that mass-market firms often serve poorly. Because the segment is small, competition may be lower and customers may pay more for a close fit. It is not defined by low prices, monopoly control or selling only to businesses.

Question 38Business opportunity identification and idea development

A university campus has several coffee shops, but all close at 6 p.m. Many students study until midnight and want hot drinks. Which opportunity does this most clearly describe?

  1. A weakness in the students' study habits
  2. A market gap based on unmet demand at a particular time Correct answer.
  3. A threat from a new competitor
  4. A saturated market with no room for new entrants

Explanation

The shops meet demand during the day but not in the evening, so an unmet need exists at a specific time. This is a market gap: a segment of demand that current suppliers do not serve. An entrepreneur could open a late-night outlet or arrange evening delivery to capture it.

Question 39Business opportunity identification and idea development

An entrepreneur wants to launch an online tutoring platform but has no programming skills, and no developers are available locally. Which feasibility concern is most directly raised?

  1. Financial feasibility
  2. Legal feasibility
  3. Technical feasibility Correct answer.
  4. Market feasibility

Explanation

Technical feasibility asks whether the business has, or can obtain, the skills, equipment and technology needed to deliver the product. A platform requires software development, so the lack of programmers is a technical constraint. Market, legal and financial feasibility deal with demand, compliance and money respectively.

Question 40Business opportunity identification and idea development

Which question best tests the financial feasibility of a new business idea?

  1. Do customers find the product attractive?
  2. Can the business cover its costs and still make a profit? Correct answer.
  3. Is the product different from competitors' products?
  4. Does the entrepreneur enjoy the work?

Explanation

Financial feasibility examines whether revenue will exceed costs, including start-up and operating expenses, and whether the business can generate a profit. Attractiveness relates to market demand, enjoyment relates to personal suitability, and difference relates to competitive strategy. Only the cost-and-profit question directly tests financial viability.

Question 41Business opportunity identification and idea development

Before launching a grocery delivery service across a whole city, an entrepreneur offers it in one neighbourhood for six weeks to see how customers respond. What is this approach called?

  1. A break-even calculation
  2. A pilot test Correct answer.
  3. A SWOT analysis
  4. A feasibility budget

Explanation

A pilot test runs the business idea on a small scale to gather real evidence about customer demand, costs and problems before a full launch. It reduces the risk of committing large resources to an untested idea. SWOT analysis, budgets and break-even calculations are planning tools, not small-scale trials.

Question 42Business opportunity identification and idea development

A new government policy offers tax reductions to firms that recycle plastic waste. For a start-up planning a recycling business, how should this be classified in a SWOT analysis?

  1. A weakness
  2. A strength
  3. A threat
  4. An opportunity Correct answer.

Explanation

A SWOT opportunity is a favourable external condition that the business can exploit. The tax reduction comes from the government, outside the firm, and lowers costs for recycling businesses. Strengths and weaknesses are internal, while a threat would be an unfavourable external factor.

Question 43Business opportunity identification and idea development

Two laundry services serve the same town. The older firm is cheaper but often returns clothes late. Which strategy is most likely to build a sustainable competitive advantage for the newer firm?

  1. Promise reliable on-time delivery and keep that promise consistently Correct answer.
  2. Cut prices below the older firm's prices
  3. Copy the older firm's operating methods exactly
  4. Spend heavily on advertising without changing service

Explanation

The older firm's weakness is lateness, so reliability is an unmet customer need that the newer firm can own. A consistent promise is difficult for the older firm to copy quickly and gives customers a clear reason to switch. Price cuts alone may start a price war, copying methods repeats the weakness, and advertising without service change will not keep customers.

Question 44Business opportunity identification and idea development

A small business sells cold drinks and ice cream at a beach resort. Sales are high in summer but almost zero in winter. Which action best reduces this risk?

  1. Add products that sell in winter Correct answer.
  2. Open more outlets along the same beach
  3. Raise summer prices to maximise profit
  4. Borrow money to buy a larger freezer

Explanation

Seasonal demand creates a risk that cash flow falls to zero for part of the year. Diversifying into products or services with different seasonal patterns spreads revenue across the year and reduces dependence on one season. Buying more equipment, raising summer prices or adding outlets all increase exposure to the same seasonal peak.

Question 45Business opportunity identification and idea development

Which term describes a situation in which a group of customers needs a product or service that existing businesses do not supply, or supply poorly?

  1. A market share
  2. A cash-flow forecast
  3. A market gap Correct answer.
  4. A break-even point

Explanation

A market gap exists when customers' needs are not met, or are met badly, by the businesses already trading. Finding such a gap is one of the most common starting points for a business idea, because an unmet need can often be turned into paying demand. Market share and break-even describe performance, not an opening in the market.

Question 46Business opportunity identification and idea development

An entrepreneur takes an existing school bag and deliberately changes its material, adds a reflective strip and makes it fold flat. Which idea-generation approach does this best illustrate?

  1. Group brainstorming with several participants
  2. SWOT analysis of the school bag market
  3. Market segmentation by age group
  4. SCAMPER modification prompts Correct answer.

Explanation

SCAMPER is a structured checklist that prompts an entrepreneur to substitute, combine, adapt, modify, put to another use, eliminate or reverse parts of an existing product. Changing the material, adding a reflective strip and making the bag fold flat are all modifications of something that already exists. Brainstorming, SWOT and segmentation serve different purposes in the process.

Question 47Business opportunity identification and idea development

A start-up makes reusable cloth shopping bags. Which statement is the clearest value proposition for the product?

  1. The bags are manufactured in a small factory that employs local workers.
  2. The bags are offered in three different colours.
  3. Our bags hold twice the weight and last five years. Correct answer.
  4. The bags cost more to produce than plastic bags.

Explanation

A value proposition tells the customer the specific benefit they receive and why it is better than the alternative they would otherwise use. Holding twice the weight and lasting five years states a clear benefit compared with disposable plastic bags. Where a product is made, its colour range and its production cost do not tell buyers what they gain.

Question 48Business opportunity identification and idea development

A new snack made from local cassava sells well, and within a few months three rival producers are selling near-identical copies. Which conclusion about the original business opportunity is most accurate?

  1. It was a real opportunity, but low entry barriers call for a lasting advantage. Correct answer.
  2. It was never a real opportunity, because competitors were able to copy the snack so quickly.
  3. It can only survive by cutting its price below every one of the new competitors.
  4. It was a poor idea because cassava is a common crop that any farmer can obtain easily.

Explanation

The strong early sales show that genuine customer demand existed, so the opportunity was real rather than imaginary. Imitation so soon afterwards indicates low barriers to entry, meaning the first firm must build an advantage that rivals cannot quickly copy, such as a strong brand, an exclusive supply contract or a distinctive recipe. Cutting price alone usually starts a damaging price war.

Question 49Market research and marketing

What is the main purpose of market research for a new business?

  1. To guarantee that a new product will sell in every region
  2. To replace the need for a written business plan
  3. To reduce uncertainty before making business decisions Correct answer.
  4. To set the final selling price without considering costs

Explanation

Market research collects and analyses information about customers, competitors and the market so that owners can make informed decisions and lower the risk of failure. It does not remove all uncertainty or replace planning and pricing calculations.

Question 50Market research and marketing

Which of the following is an example of secondary market research data?

  1. A published government report on household spending Correct answer.
  2. Notes from a focus group run by the business
  3. Responses from a survey the owner carried out last week
  4. Observations recorded by staff in the shop

Explanation

Secondary data already exist because someone else collected them, such as government statistics, trade reports or competitor websites. Primary data are gathered first-hand by the business for its own specific purpose.