Chapter 1 (Entrepreneurial Opportunities)

Q1Most important internal factor that can affect the working of an

enterprise is:
a) consumers b) employees c) Suppliers d) competitors.
Answer a (consumers)
Explanation: Consumer is the one who ultimately consumes or uses the
product or service and are the most important factor that can affect the
working of an enterprise.
Q2. Use of solar energy for producing electricity is a source of idea field
relating to:
a) market idea b) trading idea c) service sector idea d) natural
resources.
Answer d (natural resources)
Explanation: Ideas and product may come from natural resources i.e.,
forest, agriculture, horticulture, marine or aqua mineral, animal
husbandry, wind, sun, etc. solar energy is derived from sun, which is
natural source.
Q3. The most difficult element under creativity process is:
a) illumination b) Verification c) preparation d) incubation

Answer b (Verification)
Explanation: Verification is most difficult element under process of
creativity as it is the stage where an idea is validated and proved to be
valuable. It is considered as a difficult stage as obstacles and hurdles start
to occur due to application of idea.
Q4. The source of idea field that helps in knowing and assessing
competitors and gain advantage over them by developing better products
and keep up with the trends and preferences of consumers is:
a) market idea b) existing product idea
c) natural resource idea d) trading idea.

Answer b (existing product idea)

Explanation: A business develops, its existing product or make changes to
it to expand and grow. To keep up with its competitors in the market, a
business either must develop new product or make changes to its existing
products to keep its customers. Another reason for developing or changing
a product is increasing sales and profits of the business.
Q5. The process that assists managers in deciding the future actions for
an organisation is:
a) environment sensing b) Innovation c) creativity d) environmental
scanning

Answer a (environment sensing).

Explanation: Environment scanning is the process of gathering
information regarding company’s environment, analysing it and forecasting
the impact of all predictable environmental changes. It helps managers to
decide future path of the organization.

Q6. The stage where an entrepreneur develops a plan to give practical

shape to his idea as the idea re-surfaces in a realistic way is:
a) illumination b) verification c) incubation d) innovation

Answer: a. (Illumination)
Explanation: Illumination is a stage where an idea re-surfaces in a
realistic way. An entrepreneur comes with a viable plan to give practical
shape to his idea.

Q7. Increase in petrol prices is considered as a:

a) political factor b) social factor c) economic factor d) legal factor.

Answer c (economic factor)

Explanation: Economic factors have major impact on how businesses
operate and take decisions. it includes factors like inflation rates, interest
rates, unemployment rate, oil prices, taxation, etc.

Q8 Spotting trends through trade shows and exhibition is an example of

a) Think trends b) Read trends c)Watch trends d)Talk trends

Answer: c (watch trends)

Explanation: Entrepreneurs observe, study the habits, preferences and

likes and dislikes of the consumers. Trade shows provide a great place to
get trend ideas. In case target consumers are youth, then, visiting a mall,
observing trends of clothing, eating habits, etc. can be done.
Q9 The process that helps entrepreneurs to know about potential of
market is
a) market demand b)market assessment c)innovation d)SWOT analysis

Answer: b (market assessment)

Explanation: Market assessment helps to study factors like demand,
supply, cost and price of product and innovation to know about market
potential for a product or service.

Q10 The idea for electronic cars developed because of depletion of natural
resources and pollution. The source of perceiving such an idea is:
a) problem b)change c) competition d) innovation

Answer: a (problem)
Explanation: Solution to a problem may lead to generation of idea. In
above case, due to problem of depletion of natural resources and pollution,
the idea for electronic cars was generated.

Q11 The external and internal analysis of environment done together is

known as:

a) SWOT analysis b)environmental scanning c)sensing opportunities

d)entrepreneurial activity
Mark(s):

Answer: a (SWOT analysis)

Explanation: SWOT represents strengths, weaknesses, opportunities and
threats. The internal and external analysis are together known as SWOT
analysis.

Q12. The factor of external environment that affects the demand for a
company's products is:
a) legal factors b) political factors c)economic factors d)social factors
Mark(s):1

Answer: d (social factors)

Explanation: Social factors include consumption habit of consumers,

attitude of customers, lifestyle, religion, etc that affects demand for a
company's products and how the company operates.

Q13. The objectives of problem identification include following except:

a) spotting target group facing the problem.
b) Acceptance of market for solution to the problem.
c) To achieve profits and revenues.
d) Clearly stating the problem.
Mark(s):1
Answer: c (to achieve profits and revenues)

Explanation: The objectives of problem identification include spotting

target group facing the problem, acceptance of market for solution to the
problem and clearly stating the problem

Q14. A systematic method that helps to gather information about

consumers and organisations and helps in generation of idea is:
a) Market plan b) market research c) trading d) creativity
Mark(s):1
Answer: b (market research)

Explanation: Market research is a systematic approach for gathering and

interpreting information. It provides information about market needs,
market size, and level of competition, general environment, and
technology.

Q15. Element of innovation that includes identification of features of the

product or service, design and resources is:

a) resource organisation b)analytical planning c)implementation

d)commercial application
Mark(s):1

Answer: b (analytical planning)

Explanation: Analytical planning includes identification of features of the
product or service, design, and resources.

Q16. Germination of idea, preparing for implementing, incubation,

illumination and verification are part of:
a) creativity process b) innovation process
c)sensing opportunity d) Entrepreneurship.
Mark(s):1
Answer: a. (creativity process)
Explanation: The process of creativity includes Germination of idea,
preparing for implementing, incubation, illumination, and verification.

Q17 Many sources like e-mails, newsletters or websites and forums are
used to spot new trends. Such a way of spotting trends is:

a) talk trends b) think trends c) read trends d)watch trends

Mark(s):1
Answer: c (read trends)
Explanation: Information about latest trends can be collected from sources
such as reading leading publications, various websites related, tech-tools
like RSS feeds, e-mails, newsletters, or websites. This way for spotting
trend is called read trends.

Q18. Frames of reference for designing the process of ideas generation are
called:
a) trend spotting b)business opportunity c)innovation d) idea fields
Mark(s):

Answer: d (idea fields)

Explanation: Idea fields are referred as frames of reference for designing
the process of ideas generation. It provides an entrepreneur with advantage
of structuring ideas based on frames.

Q19 Elements existing within organisation, including management, current

employees and corporate culture are part of:

a) external environment b)macro environment c)internal environment

d)economic environment
Mark(s):1
Answer: c (internal environment)
Explanation: Internal environment includes elements existing within
organisation like management, employees and culture of organization that
influence its activities and choices.

Q20 Aspect that promotes the idea of establishing an enterprise and earn
revenues is:
a) business environment b) business opportunity
c)entrepreneurship d) environmental scanning
Mark(s):1
Answer: b (business opportunity)
Explanation: business opportunity is an idea that is feasible to be
converted into an enterprise and get profits.

Q21. John thought to develop a Smartphone that would have a wireless

charger. He thought of the idea in the 2014 but was able to develop in
2017. Can you name the process of creativity referred in the above case.
Mark(s):1
Answer: The process of creativity referred in the case is Illumination.
Illumination: It involves planning regarding how the idea will be converted
into a venture. The entrepreneur gathers the necessary resources for
making his idea practically viable.

Q22 How can trends be spotted by an entrepreneur?

Answer: Trends can be spotted through reading materials and sources,
talking with others, watching, and observing market changes and through
analysis

Q23 what is required to be considered before seeking a business

opportunity?

Answer: Before seeking a business opportunity, one must be sure that the
a) Market for the product is there.
b) Rate of return on the investment is acceptable.

Q24. Define Business environment.

Mark(s)
Answer: Business environment represents all external forces, factors or
conditions that exert some degree of impact on the business decisions,
strategies and actions taken by the firm. Success of a business is generally
dependent on its business environment.

Q25. State some examples through which information for environmental

scanning can be attained.
Mark(s):1
Answer: Information for environmental scanning can be attained by
• Direct information from customers, wholesalers, retailers,
distributors, consultants, etc.
• Company’s records
• Publication of Government or by financial institutions
• Formal studies by strategic planners
Q26. Roy owns a clothing business. He observed that it is important for
him to spot trends and keep up with the changes due to nature of his
business. He hired a team of expert for trend spotting to be updated with
the changes. How does trend spotting will help Roy?
Mark(s):1
Answer: Trend spotting will help Roy to know about the changes in tastes
of customers with regards to different clothing styles which would help him
to produce and offer products as per the market trends, fashion,
preferences, etc. to his customers and keep up with the new market trends.

Q27. List the objectives of problem identification.

Answer: The objectives are

• The problem should be defined properly.
• Choosing the target group for problem
• To find a feasible solution

Q28. Sierra plans to open a salon in her neighbourhood as she knows it

will be good opportunity for her. Since, there are no other salons; she
thinks she will be able to earn good profits. How do think Sierra has
chosen the right opportunity?
Mark(s):1
Answer: Before selecting any business opportunity, Sierra should analyse
the factors that can affect her business, even if she thinks there is no
competition. Hence, Sierra should consider the PESTEL factors before
starting her business.

Q29. Identify and explain the process that assists managers in deciding the
future actions for an organisation.
Mark(s):1
Answer: The process that assists managers in deciding the future actions
for an organization is environment scanning. It is the process of gathering
information regarding company’s environment, analysing it and forecasting
the impact of all predictable environmental changes. It helps managers to
decide future path of the organization.

Q30 How is SWOT analysis useful for managers?

Answer: SWOT represents strengths, weaknesses, opportunities, and
threats.
 • Through such an analysis, strengths and weaknesses within an
organization can be matched with opportunities and threats in
environment so that an effective strategy can be formulated.
An effective organizational strategy that capitalises on the opportunities
using strengths and neutralises the threats by minimizing the impact of
weaknesses.

Q31 How is identification of problem useful for an entrepreneur?

Mark(s):2
Answer: Identification of problems is useful as it helps an entrepreneur to:
a) Develop new products
b) Become more innovative and creative
c)Become aware about the demand of consumers.
d)Contribute towards economic development

Q32 How does sensitivity towards environment helps business in tapping

useful resources?
Mark(s):2
Answer: Sensitivity towards business environment helps firms to obtain
various resources for operating the business-like finance, machines, raw
materials, power and water, labour, sell goods and services to customers,
pay taxes to government, give return on investment to investors, etc.
Business environment provides various resources as inputs and provides
an outlet for the business output.

Q33 Big Bakes is a bakery that is famous for its cakes and breads.
However, with the increase in competition in offering new products, Big
Bakes decided to make some changes and bake its products. Can you
suggest how idea field will help Big Bakes?
Mark(s):

Answer: Big Bakes can generate better ideas through the process of
generation of idea fields.
Idea fields are the references or sources that help in making the
process of idea generation easy and smoother.
Idea fields can help Big Bakes in following ways:
• Big Bakes can develop their existing product and be more
successful as changes can help the firm to grow more.
it will help in knowing and assessing its competitors and gain advantage
over them by developing better products and keep up with the trends and
preferences of consumers.

Q34 Give any three significance of understanding business environment for

managers?
Mark(s):3
Answer: The significance of business environment is:
• Identification of threats and warning signals: Business
environment helps firms to identify threats for business and
perceive early warning signals for the business and industry.
• Planning & Policy Formulation: Business Environment helps
firms in deciding the future course of action or training
guidelines for decision making and understanding and
analysing the business dynamics.
• Improvising Performance: Business Environment helps firms in
improving their performance by closely monitoring their
immediate environment and adopting suitable business
practices to improve their present performance.

Q35 How does observation in the market place helps to spot trends?
Mark(s):3
Answer: Observation helps entrepreneurs to analyse and watch the
changes in preferences and consumers. Many business stores hire
specialists that observe the behaviour of consumers while buying the
products so as to know what consumers actually desire.
It also helps to know what kind of products attract customers and how
customers respond to the products being offered by a business.

Q36 Who is an entrepreneur?

Mark(s):3
Answer: Meaning of an Entrepreneur
The word entrepreneur is Derived from the French word
‘Entreprende,’ that means to undertake some activity. He/she is an
innovator of new ideas and business processes.
An entrepreneur
• has management skills, team building abilities and leadership
qualities.
• exercises initiative by organising venture to take benefit of
opportunity.
 • perceives opportunity, organises resources.
• needed for exploiting opportunity, etc.
• is a catalytic agent who converts a situation into an
opportunity?
Q37 Aarav started his business 5 years ago. He decided to start his own
small business of selling customised products which attracted lot of
customers. His idea for the start-up turned out to be a successful business
opportunity for him and made him successful. Can you define with what
Aarav was able to convert his idea into an enterprise opportunity?
Mark(s):3
Answer: Entrepreneurs with their vision can spot the opportunity,
synthesise the information and evaluate emerging patterns, which other
people can ignore. Aarav was able to sense the opportunity and perceive
into an enterprise.
Sensing of opportunities is a process of perceiving an idea, converting
it into an opportunity and then finally into an enterprise.
An entrepreneur persuades customers, partners, and employees to
see the opportunity, share and support it.
Q38 What do you understand by PESTEL analysis?
Mark(s):3
Answer: PESTLE involves identifying the political, economic, socio-cultural,
technological, environmental, and legal influences on an organization and
providing a way of scanning the environmental influences that have
affected or are likely to affect an organization or its policy
These are the factors which affect the industry. These are political,
economic, social, technological, ecological, and legal factors, abbreviated as
PESTEL.

Q39What is innovation? State its components.

Mark(s):4
Answer: Innovation refers to the process of converting an idea into a
product or service that has worth. It involves planning, developing
strategies and managing operations efficiently.

Innovation involves following components:

• Analytical planning: this involves designing and developing of
products and services.
• Resource Organisation: this includes important resources like
money, men, software and technology and raw materials.
• Implementation: it involves utilizing resources so as to provide
 product and services.
• Commercial application: this involves worth of company to
employees, giving rewards to workers and providing information
to stakeholders.
Q40 what do you understand by SWOT analysis?
M
Answer: SWOT represents strengths, weaknesses, opportunities and
threats.
Through such an analysis, strengths and weaknesses within an
organization can be matched with opportunities and threats in
environment so that an effective strategy can be formulated.
Business firms undertake SWOT analysis to understand external and
internal environment.
• Strength: An inherent capacity which an organization can use to
gain strategic advantage over its competitors
• Weaknesses: An inherent limitation or constraint which creates
a strategic disadvantage
• Opportunities: A favourable condition in the organization's
environment which enables it to consolidate and strengthen its
position
• Threats: An unfavourable condition in the organization's
environment which creates a risk for, or causes damage to, the
organization

Q41Explain any three factors to be considered while assessing the market.

4Answer: Following factors should be considered for market assessment:
• Demand: market research should be done so as to identify the
needs and demands of customers before developing a product.
Analysing the demand helps to know about target market and
what customers want.
• Competition: it is important to know and understand the level of
competition in the market so as to develop and adopt better
strategies and gain advantage over the competitors.
• Cost and price: it is important to adopt most suitable pricing
strategy and produce goods efficiently so as to minimise the
costs. The price should be set keeping in mind the type of
product, features of product, cost of production and pricing
 strategy of the competitors.

Q42 Pam decided to start her own business of selling artificial jewellery.
She did research to develop an idea for her business and analysed that
many women like to buy artificial jewellery as it is trendier. Can you
explain what helps entrepreneurs like Pam for perceiving an idea?

Answer: An opportunity or an idea can be perceived from following

sources:
• Solution of a problem: Solution to a problem may lead to
generation of idea.
• Change: Change in social, legal, or technological aspects, may
lead to a new business opportunity.
• Invention: Invention of a new product or service may lead to a
new opportunity that can be converted into an enterprise.
• Competition: It results in new business opportunities so as to be
better that the competitors.
• Innovation: it helps in adding value to the existing product by
introducing new process, idea, etc.

Q43 Explain how suppliers and customers can affect a business.

Answer: Following affect the business as:

a. Consumers/Customers
• Customers are people who pay money to acquire an
organization's products.
• Consumer is the one who ultimately consumes or uses the
product or service and is the most important factor that can
affect the working of an enterprise.
• It is important to identify the needs and wants and consumer
and offer them products as per their requirements as it can
affect the profits and sales of a business.
b. Suppliers
• The provide raw materials, equipment, services and so on. Large
companies rely on hundreds of suppliers to maintain their
production.
 • Suppliers with their own bargaining power affect the cost
structure of the industry and affect the availability of resources
required for production of goods.
• It is important to consider the relationship with suppliers as it
can affect the production and operational activities of a
business.
Q44 It is important for an entrepreneur to identify and spot trends to be
successful and survive in the market. Explain methods through which
trends can be spotted.
Mark(s):5
Answer: Trends can be spotted through following ways:
• Read Trends: it involves referring to different reading material
sources like articles, popular newsletters, Websites Business
magazines, blogs, international trends through internet, etc.
Such sources provide information necessary for businesses to
keep up with the market trends.
• Talk Trends: it involves talking and socializing with people
through social media like Facebook, Instagram, etc. to know
what people desire. Many companies organize events and
contests to get to know people and talk to them about their
needs and what they like.
• Watch Trends: it involves analyzing and studying the trends in
the market. Many companies hire experts who observe the
behaviour of consumers and analyse what consumers like and
what they don’t.
• Think Trends: this involves the ability of an entrepreneur to
identify trends and develop products accordingly after reading
and watching trends. The entrepreneur analyses and processes
the information as per trends which are spotted in the market.

Q45 After completing his MBA, Kate decided to take a trip to northeastern
states as he had never visited those states. While he was staying in one of
the villages in Assam, he observed that jute was grown a lot by farmers. He
though that he can supply jute and start his own business. He talked to
the farmers about the idea and decided to train them. He analysed that
jute can be used for many purposes and he can specialize in making jute
bags as it can also help in serving as an eco-friendly alternative. He also
decided to give fair share of wages to the farmers for their hard work.
a. Identify the process and its factors through which Kate was able to
 convert his idea into an entrepreneurial opportunity.
Answer: a. Karan was able to convert his idea through sensing and
perceiving opportunity.
Factors involved in Sensing Opportunities
1. Ability of perceiving and preserving the basic ideas : An
opportunity or an idea can be perceived from following sources:
• Solution of a problem: Solution to a problem may lead to
generation of idea.
• Change: Change in social, legal or technological aspects, may
lead to a new business opportunity.
• Invention: Invention of a new product or service may lead to a
new opportunity that can be converted into an enterprise.
• Competition: It results in new business opportunities so as to
be better that the competitors.
• Innovation: it helps in adding value to the existing product by
introducing new process, idea, etc.
2. Ability of harnessing various sources of information:
Information can be collected from magazines, books, journals,
seminars, trade shows, family members, customers, friends, etc. This
has to be analysed to identify an opportunity
3. Vision, creativity and innovation: Entrepreneurs provide a
solution to the problem through creativity. Entrepreneur’s vision
helps him to:
• Overcome difficulties.
• Take control of the business.
• Create a difference.
Q46 Creativity is a process that helps in development of an idea. Explain.
Mark(s):

Answer: Creativity is the initial stage that leads to development of an idea.

It is one of the most important characteristics that an entrepreneur should
have so as to generate a business opportunity.
It involves following steps:
• Idea germination: it is the stage that leads to emergence of an
idea. The entrepreneur develops an idea through different
 sources so as to convert it into a business opportunity. It is also
called seeding stage.
• Preparation: it involves analyzing the validity of the idea. The
entrepreneur conducts research to see whether the idea will be
successful or not.
• Incubation: it involves implementation of the idea before it is
actually presented. An entrepreneur imagines how the idea can
be turned into an opportunity before actually converting into an
enterprise.
• Illumination: it involves actual planning regarding how the idea
will be converted into a venture. The entrepreneur gathers the
necessary resources for making his idea practically viable.
• Verification: it refers to testing the idea and checking its
applicability. It involves knowing the worth of idea after its being
developed.
Q47 Roy and David decided to open a career counselling centre. They
decided to conduct research to see the market potential of such business.
Explain the parameters which needs to be checked to determine the future
of their business.
Mark(s):6
Answer: The parameters which need to be checked are:
• Product identification: the idea should be concrete. The product
so developed should be sold at affordable price and should be
different from that of competitors so it can be identified by
customers.
• Application: the product idea should have benefits and can be
used easily. There should be modifications and changes to
existing product also.
• Level of operation: the scale of business depends on the owner
whether they want to start a small business or large business. It
also depends on the product being sold to the customers.
• Cost: it is important to determine different costs and expenses
being incurred for developing a product so as to set a price for
the product.
• Competition: it is important to know the competitors and what
kind of demand and supply situation exists in the market for
the product.
 • Technical complexity: it is important to understand the
technicality of the product, in case the product offered is of
complex nature.
• Profits: it is important to set targets and estimate revenues
during a particular period so as to know if the firm can earn
profits.

Q48 Environmental scanning helps an entrepreneur to prepare for any

changes that can affect the business operations. Explain.

Answer:
• First Mover Advantage: identify opportunities for business
success and be the first to exploit business opportunities
instead of losing them to competitors.
• Threats & Warning Signals: Know about threats for business. It
helps to perceive early warning signals for the business and
industry and take corrective measures such as quality
improvement, cost reduction, advertising etc.
• Tapping Useful Resources: helps to obtain various resources for
operating the business-like finance, machines, raw materials,
power and water, labour etc. sell its goods and services to
customers, provide its taxes to government, give return on
investment to investors, etc.
• Coping With Rapid Changes: helps to deal with continuous
changes taking place such as less brand loyalty, fragmentation
of market, more demanding customers, rapid changes in
technology, intense global competition, etc. and develop suitable
courses of action to cope with the changes.
• Planning & Policy Formulation: it helps in deciding the future
course of action or training guidelines for decision making AND
understanding and analysing the business dynamics.
• Improvising Performance: IT helps firms in improving their
performance by closely monitoring their immediate environment
AND adopting suitable business practices to improve their
present performance and succeed in the market for longer
period
Q49 Miller, an architect, saw a building which was not fully constructed
near his office. He saw it as an opportunity and decided to quit his job and
start his own constructing business. With the help of his father, he bought
the building and decided to fully construct it with his own creativity. When
the building was completed, it was very much appreciated for its design
and many big firms approached Miller to design building for them.
a. Can you identify the source of idea field that help Miller in generating
the idea?
b. Also explain the other ways of idea field that help entrepreneurs in
generating business ideas
Mark(s):6

Answer: a. The source of idea field that helped Miller is Creativity.

Creativity is a crucial idea field that helps to identify and develop
opportunities. It helps in developing new products. Ideas are
generated through following ways:
(a) Development of a new product
(b) Modification of an existing product or service.
(c) New innovation or process for producing goods
(d) Explore new markets for existing products
b. other sources of idea fields are:
• Natural Resources: a product can be developed by using natural
resources, farming activities, renewable resources, etc. which
can help in creating innovative products.
• Existing Products or Services: entrepreneurs can add features,
specification, and modifications to existing product so as to
make it more creative. It can help to save costs regarding new
product development and help in providing better products.
• Market or Demand Driven ideas: through market research and
analysis, businesses can gather information about what
customers want and then develop the product accordingly. This
helps in providing products which are desired and achieve
customer satisfaction.
• Trading Related Ideas: it refers to buying and selling of goods
and services and involves less risk as compared to other
businesses. However, many big firms have now entered into
 sectors which have increased the scope of this sector.
• Service Sector Related Ideas: it involves developing of ideas in
different service-related fields like tourism, health, education,
transportation, distribution, food, consultancies, software and
technology, etc.
Q50 Explain PESTEL analysis

Answer: PESTEL involves identifying the political, economic, socio-cultural,

technological, environmental, and legal influences on an organization and
providing a way of scanning the environmental influences that have
affected or are likely to affect an organization or its policy.
These are the factors (Political, Economic, Social, Technological, Ecological
and Legal factors) which affect the industry as a whole and are abbreviated
as PESTEL. These factors are:
Political factors: These are how and to what extent the government
intervenes in the economy and the activities of business firms.
Also influence goods and services which the government wants to provide,
health, education and infrastructure of a nation.
Economic factors: It has major impact on how businesses operate and
take decisions. For example - interest rates affect a firm's cost of capital
and therefore to what extent a business grows and expands.
Social factors: These affect demand for a company's products and how the
company operates.
Technological factors: These factors determine barriers to entry,
minimum efficient production level and influence outsourcing decisions.
Legal factors: they affect how a company operates, its costs, and demand
for its products.
Environmental factors: They affect industries such as tourism, farming,
and insurance.
Growing awareness towards climate change affects how companies operate
and the products they offer.

Board questions

(2016)
Q1 Rishabh lives in Vijay Nagar, a residential colony near Delhi University
(DU). Being close to DU this area is a hub for students who come from
outside Delhi to study here as they find good accommodation with Tiffin
service readily available. Rishabh has a vacant residential building there.
He found it to be an attractive economic idea to start a Paying Guest
House. He knows that he has a good market because of the location of his
building. State the other requirement he has to ensure before opting for
this opportunity. (1)

Ans. The rate of return on the investment must be attractive to be accepted

by him.

Q2 Ragini, a career-oriented mother, hardly got time to cook for the family.
She decided to hire a cook but was not able to find one who could cook
according to the taste of the family. Her sister Abha sensed that this
problem is not only faced by her sister but also by many working women.
She launched a website namely ‘Dial for food’ where housewives who had
culinary ability and were interested to cook could drop in their contact
details and households where specific cuisine was required could leave in
their requirements so that through the website home cooked food could
be delivered. The website mainly helped in identifying the requirement
and fulfilled it through providing delivery service. Identify any two uses of
problem identification to Abha. (2)

Ans. 1. Bring out new products in the market.

2. Increase employment generation.
3. Understand the problems and needs of the market. (Any two)

Q3 Explain the first two elements in the innovation process? (2)

Q4 Explain how the following factors affect idea and opportunity assessment.
(3)

a. Application and use

b. Level of operation
c. Competition
 Q5 Sensitivity to environmental factors is crucial for an entrepreneur. With an
appropriate example explain the relevance of the statement. (3)

Ans. Importance of environment: (Any three)

Q6 Sheila has a degree in robotics, and she loves to design products. She started
her career in ‘Robotic’ which uses high end technology in all their products. Her
job profile included travelling a lot also. Whenever she travelled, she noticed that
disabled people have difficulty in maneuvering their wheelchair from one place to
another because in some places ramp is not provided and there is no way they can
walk up the stairs. She came up with an idea of a wheelchair which can be used on
stairs easily. She decided to quit her job and start her own company. She realized
that her idea was the first stage in the process of innovation. Identify the concept
and explain the steps in its process. (6)

Ans. Creativity and its process

Q7 To be Successful an entrepreneur needs to work on various areas. One

such area is generation of ideas which is very crucial for the ultimate
success of the firm. To streamline the generation of ideas the
entrepreneurs will have to use various convenient frames of reference.
Comment on any two such frames. (2)

Ans Idea fields