[HBSDS] HBS DISRUPTIVE STRATEGY Certification Exam
Preparation
**Question 1.** Which type of disruptive innovation targets customers who are overserved by
existing products and offers a “good enough” solution at the low end of the market?
A) Sustaining Innovation
B) Low‑End Disruption
C) New‑Market Disruption
D) Incremental Innovation
Answer: B
Explanation: Low‑End Disruption enters the bottom of the market, providing a simpler, cheaper
offering that satisfies overserved customers.
**Question 2.** In the “Jobs to Be Done” framework, what does the term “job” refer to?
A) The demographic profile of a consumer
B) The functional task a product helps a consumer accomplish
C) The price point a consumer is willing to pay
D) The brand loyalty of a consumer
Answer: B
Explanation: A “job” is the underlying functional (and often social/emotional) task that a
consumer hires a product to perform.
**Question 3.** Which of the following best describes the “Incumbent’s Dilemma”?
A) Incumbents lack resources to innovate.
B) Incumbents fail because they focus on serving their most profitable customers.
C) Incumbents cannot adopt new technologies due to regulations.
D) Incumbents are too risk‑averse to enter new markets.
Answer: B
Explanation: The Incumbent’s Dilemma occurs when successful firms prioritize existing
profitable customers, causing them to miss disruptive opportunities.
, [HBSDS] HBS DISRUPTIVE STRATEGY Certification Exam
Preparation
**Question 4.** In the RPP framework, which element determines the economic logic that
decides which projects receive funding?
A) Resources
B) Processes
C) Profit Formula
D) Capabilities
Answer: C
Explanation: The profit formula defines margins, cost structures, and return expectations that
guide funding decisions.
**Question 5.** What is the primary difference between an integrated strategy and a
specialized (modular) strategy?
A) Integrated strategy focuses on cost leadership, modular on differentiation.
B) Integrated strategy owns the whole value chain; modular focuses on a specific component.
C) Integrated strategy targets high‑end customers; modular targets low‑end.
D) Integrated strategy is used only in mature industries.
Answer: B
Explanation: Integrated strategies control the entire value chain, whereas modular strategies
concentrate on a single component or module.
**Question 6.** Which of the following statements best captures the concept of “Technology
Trajectory”?
A) The speed at which a company can commercialize a new product.
B) The rate of technological progress versus the rate customers can adopt it.
C) The total R&D spending of an industry.
D) The number of patents filed each year.
, [HBSDS] HBS DISRUPTIVE STRATEGY Certification Exam
Preparation
Answer: B
Explanation: Technology trajectory compares how fast technology advances with how quickly
customers can absorb those advances.
**Question 7.** In the context of disruptive strategy, what does “non‑consumer” refer to?
A) A consumer who refuses to purchase any product.
B) A potential customer who currently does not use any solution for a particular job.
C) A competitor that has no market share.
D) A demographic group with low purchasing power.
Answer: B
Explanation: Non‑consumers are people who have a need but are not served by existing
products, representing a new‑market disruption opportunity.
**Question 8.** Which of the following is NOT a dimension of a job specification in the JTBD
framework?
A) Functional
B) Social
C) Emotional
D) Geographic
Answer: D
Explanation: Job specifications focus on functional, social, and emotional dimensions, not
geographic location.
**Question 9.** Which process best illustrates the Resource Allocation Process (RAP) in a large
organization?
A) The CEO directly approving every new project.
B) Middle managers filtering ideas based on existing profit formulas.
, [HBSDS] HBS DISRUPTIVE STRATEGY Certification Exam
Preparation
C) An external venture capital firm selecting startups.
D) Employees voting on project priorities.
Answer: B
Explanation: RAP describes how middle management acts as a filter, often shaping which ideas
survive regardless of top‑level directives.
**Question 10.** What characterizes a “hardened” company in the context of disruptive
strategy?
A) It has diversified its product portfolio.
B. Its profit formula is so rigid that it cannot pivot to new opportunities.
C. It consistently outsources its R&D.
D. It maintains a flat organizational structure.
Answer: B
Explanation: A hardened company’s entrenched profit logic prevents it from adapting to
disruptive changes.
**Question 11.** Which financing characteristic distinguishes “good money” from “bad money”
for a disruptive venture?
A) High interest rates
B) Short investment horizon focused on immediate profit
C) Patient capital that tolerates early losses for long‑term growth
D) Mandatory equity ownership by the founder
Answer: C
Explanation: Good money is patient, allowing the venture to prioritize growth over early
profitability.
Preparation
**Question 1.** Which type of disruptive innovation targets customers who are overserved by
existing products and offers a “good enough” solution at the low end of the market?
A) Sustaining Innovation
B) Low‑End Disruption
C) New‑Market Disruption
D) Incremental Innovation
Answer: B
Explanation: Low‑End Disruption enters the bottom of the market, providing a simpler, cheaper
offering that satisfies overserved customers.
**Question 2.** In the “Jobs to Be Done” framework, what does the term “job” refer to?
A) The demographic profile of a consumer
B) The functional task a product helps a consumer accomplish
C) The price point a consumer is willing to pay
D) The brand loyalty of a consumer
Answer: B
Explanation: A “job” is the underlying functional (and often social/emotional) task that a
consumer hires a product to perform.
**Question 3.** Which of the following best describes the “Incumbent’s Dilemma”?
A) Incumbents lack resources to innovate.
B) Incumbents fail because they focus on serving their most profitable customers.
C) Incumbents cannot adopt new technologies due to regulations.
D) Incumbents are too risk‑averse to enter new markets.
Answer: B
Explanation: The Incumbent’s Dilemma occurs when successful firms prioritize existing
profitable customers, causing them to miss disruptive opportunities.
, [HBSDS] HBS DISRUPTIVE STRATEGY Certification Exam
Preparation
**Question 4.** In the RPP framework, which element determines the economic logic that
decides which projects receive funding?
A) Resources
B) Processes
C) Profit Formula
D) Capabilities
Answer: C
Explanation: The profit formula defines margins, cost structures, and return expectations that
guide funding decisions.
**Question 5.** What is the primary difference between an integrated strategy and a
specialized (modular) strategy?
A) Integrated strategy focuses on cost leadership, modular on differentiation.
B) Integrated strategy owns the whole value chain; modular focuses on a specific component.
C) Integrated strategy targets high‑end customers; modular targets low‑end.
D) Integrated strategy is used only in mature industries.
Answer: B
Explanation: Integrated strategies control the entire value chain, whereas modular strategies
concentrate on a single component or module.
**Question 6.** Which of the following statements best captures the concept of “Technology
Trajectory”?
A) The speed at which a company can commercialize a new product.
B) The rate of technological progress versus the rate customers can adopt it.
C) The total R&D spending of an industry.
D) The number of patents filed each year.
, [HBSDS] HBS DISRUPTIVE STRATEGY Certification Exam
Preparation
Answer: B
Explanation: Technology trajectory compares how fast technology advances with how quickly
customers can absorb those advances.
**Question 7.** In the context of disruptive strategy, what does “non‑consumer” refer to?
A) A consumer who refuses to purchase any product.
B) A potential customer who currently does not use any solution for a particular job.
C) A competitor that has no market share.
D) A demographic group with low purchasing power.
Answer: B
Explanation: Non‑consumers are people who have a need but are not served by existing
products, representing a new‑market disruption opportunity.
**Question 8.** Which of the following is NOT a dimension of a job specification in the JTBD
framework?
A) Functional
B) Social
C) Emotional
D) Geographic
Answer: D
Explanation: Job specifications focus on functional, social, and emotional dimensions, not
geographic location.
**Question 9.** Which process best illustrates the Resource Allocation Process (RAP) in a large
organization?
A) The CEO directly approving every new project.
B) Middle managers filtering ideas based on existing profit formulas.
, [HBSDS] HBS DISRUPTIVE STRATEGY Certification Exam
Preparation
C) An external venture capital firm selecting startups.
D) Employees voting on project priorities.
Answer: B
Explanation: RAP describes how middle management acts as a filter, often shaping which ideas
survive regardless of top‑level directives.
**Question 10.** What characterizes a “hardened” company in the context of disruptive
strategy?
A) It has diversified its product portfolio.
B. Its profit formula is so rigid that it cannot pivot to new opportunities.
C. It consistently outsources its R&D.
D. It maintains a flat organizational structure.
Answer: B
Explanation: A hardened company’s entrenched profit logic prevents it from adapting to
disruptive changes.
**Question 11.** Which financing characteristic distinguishes “good money” from “bad money”
for a disruptive venture?
A) High interest rates
B) Short investment horizon focused on immediate profit
C) Patient capital that tolerates early losses for long‑term growth
D) Mandatory equity ownership by the founder
Answer: C
Explanation: Good money is patient, allowing the venture to prioritize growth over early
profitability.
