ASSESSMENT – Set 1

Summary Table:

Difficulty Level 1 (Easy) 2 (Medium) 3 (Difficult)

No. of Questions 5 11 9

1 As per the Bird-in-Hand principle of Effectuation, what should an entrepreneur do

before starting a new venture?

Select the correct answer.

Type MCQ
A Find out how much money the entrepreneur can afford to lose, in case the venture fails.

B Determine for how long the entrepreneur can afford to lose money in case the venture
fails.
C Take stock of the resources that the entrepreneur possesses at present.

D Find out what networks the entrepreneur can build in the future.
Solution SOURCE: VIDEO: Five Principles of Effectuation

Answer C
TotalMarks 1

Scoring Simple
Scenario

Difficulty 1
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2 Though Lucy’s smoothies were tasty, customers complained that they were too
filling and spoiled their appetite for lunch or dinner. Lucy then got together with a
Nutritionist friend to make smoothies that were complete meals in themselves. She
started selling these as meal replacements for people trying to lose weight. Her
business started soaring in a few months.

Which principle of Effectuation did Lucy use in her business?

 Select the correct answer.

Type MCQ
A Lemonade principle

B Affordable Loss principle

C Crazy Quilt principle

D Pilot-in-the-Plane principle
Answer A

TotalMarks 1
Scoring Simple

Scenario
Difficulty 2

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3 Dr. Weber, a dermatologist, came up with a range of organic skin and hair care
products. However, the top cosmetic stores were reluctant to showcase his products
as his products did not have an established brand name. Through his friends, Dr.
Weber approached a few lesser-known retail store owners and started selling his
products through these stores. What principle of effectuation did the doctor use?

Select the correct answer.

Type MCQ
A Lemonade principle

B Affordable Loss principle

C Crazy Quilt principle

D Pilot-in-the-Plane principle
Answer C

TotalMarks 1
Scoring Simple

Scenario

Difficulty 2
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4 Every time Megan came back from a vacation, she noticed that her potted plants
had wilted because there was no one to water them. So, she came up with the idea
of self-watering plant pots that could keep the plants hydrated for days. Megan saw
a business opportunity here and wanted to start selling self-watering pots for plants.
Before plunging into the venture, what should Megan do first?

Select the correct answer.

Type MCQ
A Find out what sizes of pots people would prefer

B Find a preferable location to set up her store

C Arrive at a price for the pots that would make her a neat profit

D Find out if many others face a similar problem and are looking for a solution to fix
the problem
Answer D
TotalMarks 1
Scoring Simple
Scenario
Difficulty 2
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5 Eileen’s grandparents had to go from one store to another to search for products
that catered to their old age requirements. Eileen felt that setting up retail stores
that supplied all lifestyle and daily living aid products for elderly citizens under one
roof would resolve this problem. How can Eileen be sure that she had found a
problem worth solving?

Select the two correct options.

Type MCQMultiple
A Talk to a sizeable group of elderly citizens in her neighborhood

B Talk to her elderly neighbor

C Talk only to her grandparents

D Do her market research to find out the existing alternatives

Answer A, D
TotalMarks 2
Scoring Weighted
Scenario
Difficulty 3
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6 Eileen wants to set up an online retail store for selling lifestyle products and daily
living aids for elderly citizens. Her products include living aids such as walking sticks,
shower chairs, shower handles, and anti-slip shoes. What are some of the expenses
she should keep in mind to complete an initial, back-of-the-envelope calculation of
her business?

Select the two correct options.

Type MCQMultiple
A Renting a warehouse for storing products

B Cost of developing the website

C Cost of hiring professionals such as therapists for elderly people

D Cost of setting up brick and mortar stores as an expansion plan

Answer A, B
TotalMarks 2
Scoring Weighted
Scenario
Difficulty 3
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7 Which amongst the following is a risk associated with a clone market?

Select the correct answer.

Type MCQ
A Lack of branding, sales, and distribution

B Market and product re-definition

C Evangelism and education cycle

D Misjudging local needs

Answer D
TotalMarks 1
Scoring Simple
Scenario
Difficulty 1
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8 Vanessa often heard from her friends and colleagues that it was hard to get
fashionable large-sized clothing online. She decided to open an online, designer
clothing store, especially for larger sizes. Her idea was to ship her products
internationally as well. What kind of customer segmentation is Vanessa using for her
clothing store?

Select the correct answer.

Type MCQ

A Geography
B Demographics

C Psychographics
D Behavior

Answer B
TotalMarks 1
Scoring Simple
Scenario
Difficulty 2
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9 John set up a manufacturing plant for making water-soluble carry bags which could
replace plastic bags in Thailand. His target customers were retail stores for clothes
and groceries. Since his products could potentially resolve the global problem of
plastic pollution, he decided to target the entire global audience through social
media advertisements. However, the sales failed to pick up even though his website
had visitors from many countries. Where did John go wrong?

Select the correct answer.

Type MCQ

A John did not get right the gain creators for his solution.
B John failed to use design thinking when creating his product.

C John failed to identify a niche market before going global.

D John did not identify a problem that is worth solving.

Answer C
TotalMarks 1
Scoring Simple
Scenario
Difficulty 3
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10 According to Ash Maurya, which two of the following channels are more suited for
startups?

Select the two correct options.

Type MCQMultiple

A Direct sales
B Automated sales

C Sales through strategic partners

D Cold calling and trade shows

Answer A, D
TotalMarks 2
Scoring Weighted
Scenario
Difficulty 1
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11 Keith and Lavinia are fashion technology students. They constantly hear their
friends lamenting over the prices of fashionable clothes and accessories. They
decide to start a venture that turns and redesigns old clothing and accessories to
give them a new look. This not only makes fashion more affordable but also helps
the environment by minimizing waste. Which of the following customer
segments should they target to begin their venture?

Select the correct answer.

 Type MCQ

A Any person who wants affordable and eco-friendly fashion

B All students of their own college

C Corporate employees across the globe

D College students across the globe

Answer B
TotalMarks 1
Scoring Simple
Scenario
Difficulty 2
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12 Nancy wants to start a high-end clothing and accessories rental service with door
delivery and pick-up. Her target customer segment is fashion-conscious young
professionals who cannot afford to buy branded outfits for every new event that
comes up. From the options below, which problems do you think led Nancy to come
up with this venture?

Select the two correct options.

Type MCQMultiple

A There aren’t enough fashion brands in the market.

B It is difficult for young professionals to afford branded outfits frequently.

C In the world of social media, no one wants to be photographed in the same attire
twice.
D Customers don’t like shopping if they can rent clothes instead.

Answer B, C
TotalMarks 2
Scoring Weighted
Scenario
Difficulty 2
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13 Kevin learns from his neighbors that they badly need a “same-day laundry service”.
Kevin decides to offer an app-based "same-day laundry delivery” service in his
 neighborhood at a premium rate. Once customers place their orders and make the
payment through the app, he would get the laundry picked and later delivered at
their homes. Which of the following are the top two riskiest assumptions for Kevin's
business idea?

Select the two correct options.

Type MCQMultiple
A Customers will be ready to pay a premium for same-day laundry delivery service.

B There will be service providers who will agree to do the task on the same day.
C Customers actually need a same-day laundry delivery service.

D The technology which enables customers to place orders and pay online will work
seamlessly.
Answer A, D
TotalMarks 2
Scoring Weighted
Scenario
Difficulty 3
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14 Which of the following questions are best suited for a Solution Demo interview?

Select the two correct answers.

Type MCQMultiple
A What do you think should be the price of this product?

B What kind of product do you need to solve your problem?

C What part of the demo resonated with you the most?

D Are there any additional features you think are missing?

Answer C, D
TotalMarks 2
Scoring Weighted
Scenario
Difficulty 1
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15 John has come up with an idea of water-soluble carry bags that can replace plastic
bags across the globe. The bags are made from the roots of a plant, are eco-friendly,
and are edible. John wants to build a solution demo to showcase to his customers.
What are some effective ways for John to build and test his solution demo?

Select the two correct options.

Type MCQMultiple
A Show prospects a series of photographs of the product being used to carry goods,
dissolving in water, and being consumed by animals.
B Show prospects the website landing page that showcases the product and describes
how these bags can be eco-friendly.
C Make a video of the product being used as a bag and how it is soluble in water.

D Carry a few sample bags to show how it can carry goods and how it dissolves in
water.
Answer C, D
TotalMarks 2
Scoring Weighted
Scenario
Difficulty 2
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16 Mia wants to open a chain of gymnasiums across the country. Traditional gyms
having expensive equipment quote high membership costs as they offer customized
work-out plans for each member. Mia plans to offer non-traditional low-cost
methods to attain fitness as her unique value proposition (UVP). Which of the
following is the best way to refine her UVP and test her business idea?

Select the correct answer.

Type MCQ
A Eliminate benefits such as customized work-out plans based on one's health
condition.
B Eliminate benefits such as high-end machines and gyms in upmarket locations.
C Create a website for her business and let customers sign-up for a free trial.
D Rent garage spaces in at least three different locations and hire trained instructors
for multiple activities.
Answer C
TotalMarks 1
Scoring Simple
Scenario
Difficulty 3
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17 Nancy has started a high-end clothing and accessories rental service for an elite
group of customers. Based on customer profiling, she has bucketed these into
various groups such as party wear, formal, all-day wear, etc. Customers can opt for
either individual items or any of these buckets through her website. Which of the
following revenue streams can she explore to generate additional revenue for her
venture?
Select the two correct answers.
Type MCQMultiple
A Advertising fee
B Renting fee
C Licensing fee
D Subscription fee
Answer A, D
TotalMarks 2
Scoring Weighted
Scenario
Difficulty 2
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18 Elton is a passionate cook and wants to start a Brazilian restaurant. Which of the two
ways will help him manage the costs of his venture?
Select the two correct answers.
Type MCQMultiple
A Invest his savings in purchasing, setting up, and decorating a restaurant in an upscale
location.
B Invest part of his savings in sharing a kitchen with another restaurant in an upscale
location.
C Take a loan from the bank to buy specialized kitchen equipment and ingredients.
D Talk to some market suppliers and sign up for a two-month credit period.
Answer B, D
TotalMarks 2
Scoring Weighted
Scenario
Difficulty 3
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19 Xing starts a Chinese fast food chain in Mexico city. Which of the following will help
him check the profitability of his business?

Select the two correct answers.

Type MCQMultiple
A His breakeven, i.e., the actual sales he needs to make in a pre-determined period in
order to recover the fixed expenses for that period.
B Trade payback period or the time he requires to pay off her suppliers who have
agreed to give her trade credit.
C The no. of outlets that he manages to add to his chain every six months.
D The revenue that he is left with after the fixed and variable costs are deducted from
his total revenue.
Answer A, D
TotalMarks 2
Scoring Weighted
Scenario
Difficulty 3
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20 Melinda is a successful fashion designer with boutiques spread across multiple

cities. She has two interns to manage production. Melinda encourages her two
interns to come up with regular improvement suggestions. Then they discuss and
together decide which suggestions to implement and which not to. What style of
leadership does Melinda portray?
Select the correct answer.
Type MCQ
A Shared leadership
B Autocratic leadership
C Laissez-faire leadership
D Facilitative leadership
Answer A
TotalMarks 1
Scoring Simple
Scenario
Difficulty 2
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21 Keith and Lavinia have started a venture that remodels old clothes and accessories
into new ones. Lavinia has majored in Fashion design, and Keith has a degree in sales
and marketing. Both of them manage the production and keep the business going.
However, keeping in mind the upcoming college festivals and spring break, they feel
they should leverage the opportunity and try to reach out to more customers. In
your view, which one of the following options will work best for them?
Select the best answer.
Type MCQ
A Hire a full-time marketing professional who will focus only on reaching out to more
customers.
B Refrain from adding any new hires and prolong delivery schedules if needed.
C Keith should let Lavinia handle the production, leaving him more bandwidth to focus
on marketing.
D Hire some rolling interns for each season.
Answer C
TotalMarks 1
Scoring Simple
Scenario
Difficulty 3
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22 Which of the following statements are true about a brand positioning statement?
Select the two correct answers.
Type MCQMultiple
A It captures all benefits offered to multiple market segments and the price for those
 benefits.
B It is a focused attempt to highlight a relevant and unique benefit for any single
customer segment.
C It is usually targeted towards the top 20 percent of the customer segment that
generates the most revenue.
D It should be 200 to 250 words long capturing all the features and benefits of the
solution.
Answer B, C
TotalMarks 2
Scoring Weighted
Scenario
Difficulty 1
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23 Jenny wants to start a venture that sells lifestyle products and everyday living aids
for the elderly. Considering that her target customers are the people aged over 65
years, who may not be active on Social media and may not have online accounts,
which two channels will most effectively help Jenny reach her customer segment?
Select the two correct answers.
Type MCQMultiple
A Facebook
B Posters, flyers, and pamphlets
C Email Marketing
D Offline Events such as setting up kiosks at neighborhood market centers
Answer B, D
TotalMarks 2
Scoring Weighted
Scenario
Difficulty 2
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24 Sunny has opened an online store to sell goods for left-handed people, such as left-
handed school supplies, sports goods, gardening tools, and kitchen appliances. He is
now working on a sales plan for his venture. Which of the following groups of people
 can be classified as leads for Sunny’s venture?
Select the two correct answers.
Type MCQMultiple
A All left-handed people in the geographies where he delivers the products.
B Specific visitors who spend some time browsing through his product pages.
C Specific visitors who signed up on his website for newsletters and product updates.
D All visitors who visited the homepage of his website.
Answer B, C
TotalMarks 2
Scoring Weighted
Scenario
Difficulty 2
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25 John has set up a manufacturing plant for making water-soluble carry bags that can
replace plastic bags in Thailand. Using the Sales Funnel, he has identified his Target
Market to be the 5000 retail stores which are within a 150-kilometer radius of his
manufacturing plant. Which of the following can be considered as his Opportunities
in the sales funnel?
Select the correct answer.
Type MCQ
A All retailers within the 150-kilometer radius who have been contacted over the
phone.
B All retailers in Thailand who spent more than a minute on his website landing page.
C All retailers within the 150-kilometer radius who have requested for a sample
product.
D All retailers in Thailand who received an email message from his company.
Answer C
TotalMarks 1
Scoring Simple
Scenario
Difficulty 3
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