Launching New Ventures: An Entrepreneurial Approach 7th Edition

Entrepreneurs typically have a vision of where they want their businesses to go, and generally that vision is on a regional, national, or (more often) ____ level. a. state b. b. global c. country d. local e. None of these choices Answer: b Answer: b Answer: b Industries remain static or stable over time, so it is easy for

The principle of ____ means looking for the strengths or positive aspects of a problem definition first. a. Positive Reinforcement b. Affirmative Judgment c. Best Problem Definition d. Attribute Identification e. Evaluation Matrix Answer: b Answer: b Answer: b Common types of roadblocks to creativity are personal, relational, and environmental. a. True b. False Answer: False Answer: False Answer: False Failure at the rapid growth

Which of these pricing strategies will help a new firm maximize cash flow? a. Lower price to raise volume b. Raise price and reduce direct costs c. Set a higher price to raise perceived value d. Sell online e. None of these choices Answer: b Answer: b Answer: b A firm entering a _____ market in an established

____ is/are used to demonstrate that a company stands behind what it produces and the work that it does. a. ISO 9000 b. Warranties c. Six Sigma d. OEM e. None of these choices Answer: b Answer: b Answer: b Which of the following would not be representative of good team member communication? a. Talking and listening for about

Regarding an MVP, it is correct to say: a. An MVP is always the preferred way to gauge customer interest in a product. b. An MVP is an excellent way to gauge customer interest for all types of products. c. Sometimes, an MVP will not give you the feedback you need. d. An MVP

____ outsource everything except their core-management function. a. Virtual organizations b. Most startups c. Regional organizations d. Manufacturing organizations e. None of these choices Answer: a Answer: a Answer: a There are seven stages in the industry life cycle. a. True b. False Answer: False Answer: False Answer: False In the knowledge economy: a. IP assets are more valuable than physical assets b. Physical assets are

The ____ gives information about the projected profit or loss status of the business for a specified period of time. a. balance sheet b. statement of cash flows c. current ratio d. profit margin e. income statement Answer: e Answer: e Answer: e The Yellow Pages do not effectively generate awareness of new products/services in the early stages. a. True b. False

An example of new industry formation, Apple's iPhone, introduced on January 9, 2007, spurred the development of this new industry: a. The smart phone improvement industry b. The mobile app industry c. The pay-as-you-go-cell phone industry d. The development of scratch-proof screens industry e. The Android industry Answer: b Answer: b Answer: b The most challenging aspect of the

Which of the following is not a professional advisor to an entrepreneur? a. Attorney b. Board of directors c. Accountant d. Banker e. Insurance agent Answer: b Answer: b Answer: b According to Rosabeth Moss Kanter, accountability, collaboration, and initiative are all elements of ____. a. innovation b. confidence c. creativity d. intuition e. invention Answer: b Answer: b Answer: b Early economists recognized that ____ is

Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. Entrepreneurship is a form of creative destruction. a. True b. False ANSWER: True POINTS: 1 REFERENCES: Profile 1.1

Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. Somewhere in the micro strategy process, the business is actually launched in a small, controlled way. a. True

Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. Formal processes are independent and improve the functions of a department. a. True b. False ANSWER: False POINTS:

Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. Entrepreneurs need to start thinking about the cost of operations when their products and services have become commoditized. a.

Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. DBA stands for a certificate of doing business under an assumed name. a. True b. False ANSWER: True

Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. Promotion tends to be more price-focused or incentive-focused and therefore is usually considered a push strategy. a. True

Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. Following the Golden Rule that says "Do unto others as you would have them do unto you," is a comprehensive

Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. When venture capitalists scrutinize a new opportunity, they typically evaluate the market, management, and technology in that order. a.

Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. Risk is a fact of life, but a company's exposure to risk decreases as the venture grows. a. True

Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. Entrepreneurship is a personal journey that begins in the mind of the nascent entrepreneur. a. True b. False

Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. Creativity enables entrepreneurs to differentiate their businesses from competitors so that customers will notice them. a. True b.

Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. Entrepreneurs identify their primary customers by recognizing a need, or pain, in the market. a. True b. False

Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. Drucker's five questions are the basis for the development of the business concept. a. True b. False ANSWER:

Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. Each time a new product or service or an improvement to an existing product or service is introduced, it will

Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. Businesses create a lot of knowledge for their owners, which has no intrinsic value. a. True b. False

Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. Choosing a good attorney is a time-consuming but vital task that should be accomplished immediately after startup. a. True

Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. A new venture's health is measured by its balance sheet. a. True b. False ANSWER: False POINTS: 1

Entrepreneurship is a form of creative destruction. a. True b. False Answer: True Answer: True Answer: True Recent research has identified four categories of ethical decision making that entrepreneurs face on a daily basis, including individual values, organization values, external accountability, and ____. a. core values b. social responsibility c. corporate vision d. customer satisfaction e. None of these choices Answer:

A manufacturing firm is likely to use process-focused manufacturing if: a. They are highly decentralized b. They are distributed so that they can respond better to market demands c. Manufacturing is capital-intensive d. They act as separate company or profit centers e. None of these choices Answer: c Answer: c Answer: c Product-focused organizations generally are highly decentralized

Anyone investing in a new venture has four principal concerns: rate of growth, return on investment, ____ and ____. a. degree of risk / protection b. cash flow / degree of risk c. founding team / protection d. balance sheet / income statement e. assets / equity Answer: a Answer: a Answer: a Nonprofit corporations are not allowed

Once a company has become a public company, returning to private status is ____. a. a way of raising more capital b. easy to accomplish c. not allowed by the SEC d. a nearly insurmountable task e. not allowed by the board of directors Answer: d Answer: d Answer: d The ____ in a professional network are the

Which of the following is one of the three broad questions that a feasibility analysis answers? a. How will the operating systems be structured? b. Do the capital requirements, based on estimates of sales and expenses, make sense? c. Does the entrepreneur have enough passion for the business? d. Does the entrepreneur have the

The goal in ____ is to provide the exact service the customer wants at minimal cost. a. logistics b. supply chain management c. outsourcing d. human resources e. purchasing Answer: b Answer: b Answer: b A ____ consists of a novel and confidential formula, device, idea, process, pattern, or compilation of information that gives the owner a competitive

The Macro Environment includes all of the following factors except: a. The availability of credit b. Market factors and trends c. Industry factors and trends d. Global economic factors e. All of these are factors in the Macro Environment Answer: a' Answer: a' Answer: a' Product development and intellectual-property development are not closely intertwined. a. True b. False Answer: False Answer: False Answer: False Working

The owner is the only person responsible for the activities of the business in a ____. a. limited partnership b. nonprofit business c. dormant partnership d. sole proprietorship e. limited liability company Answer: d Answer: d Answer: d Brand equity, advertising expense, and the rate of industry growth are part of which of Porter's forces? a. Threat of substitute

The term ____ refers to a customer's perceived preference for, and evaluation of, product attributes, attribute performances, and consequences arising from use that facilitates (or blocks) achieving the customer's goals and purposes in use situations. a. customer value customer relationships c. customer costs d. customer savings e. customer satisfaction Answer: a Answer: a Answer: a The only reason

____ product development provides a young firm with a network of expertise that it couldn't afford to hire in-house. a. Outsourcing Patenting c. Protecting d. Networking e. Testing Answer: a Answer: a Answer: a ____ comprise over fifty percent of all small businesses in the United States. a. Startups b. Home-based businesses c. Nonprofit businesses d. Serial entrepreneurs e. Corporate entrepreneurs Answer: b Answer: b Answer: b The

To guard against contingencies, it is wise for a startup to use one supplier for about ____ percent of its needs and one or more additional suppliers for the rest. a. 50 b. 50 to 60 c. 60 to 70 d. 70 to 80 e. 80 Answer: d Answer: d Answer: d Today most investors want to see

Which type of business is most likely to be launched on the strength of a feasibility analysis alone? a. Baked goods business b. Technology business c. Internet-related business d. Clothing business e. Investment business Answer: c Answer: c Answer: c The value derived by assuming the sale of all assets and calculating the amount that could be recovered from

When an entrepreneur decides to use a team effort to create the new venture, he or she generally looks for people who have ____ skills. a. independent b. competing c. complementary d. differentiated e. homogeneous Answer: c Answer: c Answer: c Giving customers something for nothing makes sense in an environment where it is hard to get customers'

Copyright law protects: a. The concept b. The idea c. The thought process d. The form in which the idea is displayed e. None of these choices Answer: d Answer: d Answer: d One vital question, often answered incorrectly is 'Who is the customer?' . a. True b. False Answer: True Answer: True Answer: True Because entrepreneurs operate in a world of uncertainty, they

The components of a business model include all of these except: a. A value proposition b. Business concept c. Strategic partners d. None of these e. B and C only are not components of a business model Answer: b Answer: b Answer: b ____ is the mechanism that drives an individual to become a nascent entrepreneur because all other

Each time a new product or service or an improvement to an existing product or service is introduced, it will have gone through a design and development process. a. True b. False Answer: True Answer: True Answer: True The principle of Affirmative Judgment: a. Finds the negative aspects of a problem definition b. Recognizes that the problem exists c. Avoids

Once the entrepreneur determines where the new venture lies in the value chain, he or she must create a ____. a. process map b. feasibility analysis c. business plan d. timeline e. None of these choices Answer: d Answer: d Answer: d A corporate form that enjoys the pass-through tax benefits of partnerships in addition to the limited liability

Promotion tends to be more price-focused or incentive-focused and therefore is usually considered a push strategy. a. True b. False Answer: True Answer: True Answer: True ____ in ethical decision making says that "Everyone needs to look out for himself." a. Dogmatism b. Egoism c. Utility d. Relativism e. Subjectivism Answer: b Answer: b Answer: b ____ has provided a way of effectively

Google, Wikipedia, journals, and trade magazines are examples of ____. a. industry analysis b. market research c. primary sources d. secondary sources e. None of these choices Answer: d Answer: d Answer: d During startup, the entrepreneur's main concerns are to ensure sufficient startup capital, _____, and design a way to deliver the product or service. a. Add human resources Seek

Briefly discuss the six sources of primary industry data. Answer: Sources include: industry observers, suppliers and distributors, customers, employees of key firms in the industry, professionals from service organizations, and trade shows. Answer: Sources include: industry observers, suppliers and distributors, customers, employees of key firms in the industry, professionals from service

____ is concerned with the process of commercializing or extracting value from ideas. a. Problem identification b. Creativity c. Invention d. Innovation e. Marketing Answer: d Answer: d Answer: d ____ is found if a trademark is likely to cause confusion with a trademark already existing in the marketplace. a. Infringement b. Dilution c. Counterfeiting d. Trademark violation e. None of these choices Answer:

Choosing a good attorney is a time-consuming but vital task that should be accomplished immediately after startup. a. True b. False Answer: False Answer: False Answer: False ____ from lawyers, accountants, consultants, and investment bankers are essentially a promise not to charge the full fee if an IPO fails. a. Fair market provisions b. Stop-loss statements c. Forfeiture

A business concept is a concise description of an opportunity that contains seven essential elements. a. True b. False Answer: False Answer: False Answer: False The more information an entrepreneur acquires through ____, the higher the chance that his or her predictions will be close to the mark, risk will be reduced and uncertainty managed. a. market research b.

Investors tend to look for technology-driven companies rather than market-driven companies. a. True b. False Answer: False Answer: False Answer: False Most successful startups involve ____. a. only the founders b. people with skills and capabilities beyond those that the business requires c. solo entrepreneurs rather than teams d. teams rather than solo entrepreneurs e. people with MBAs Answer: d Answer:

Sole proprietorships, partnerships, S-corporations, and limited liability companies all permit pass-through earnings and losses, but S-corporations and LLCs offer more protection from liability. a. True b. False Answer: True Answer: True Answer: True A/an ____ is an advocate, but a/an ____ is bound by rules and ethics that do not permit advocacy. a. insurance agent /

In terms of its treatment of income, expenses, and taxes, a partnership is essentially a sole proprietorship consisting of more than one person. a. True b. False Answer: True Answer: True Answer: True All of the following are part of an entrepreneur's extended network except ____. a. government agencies personal advisors c. manufacturing support d. sales support e. customers Answer:

____ benefits that customers appreciate include such things as access, saving money, saving time, convenience, and health. a. Tangible b. Material c. Intangible d. Niche e. Advertising Answer: c Answer: c Answer: c The question, "Would I be proud if my actions were announced in my local newspaper?" is part of the ____ approach to ethical decision making. a.

Essential to creating an opportunity in a complex world, entrepreneurs must embrace: a. Networking b. Research c. Uncertainty d. Decision-making e. strategic alliances / acquisition Answer: c Answer: c Answer: c When choosing a banker, the entrepreneur planning a new venture should seek out an officer with the rank of assistant vice president or higher. a. True b. False Answer: True Answer:

One way to innovate with business models is to consider: a. Market research b. A Feasibility analysis c. A Competitive analysis d. An Industry analysis e. A 'blue ocean strategy' Answer: e Answer: e Answer: e Because of the benefits that have accrued to new product development from information and systems technologies: a. The probability of success at launch is

____ was not alone in asserting that the United States was rapidly and by necessity becoming an entrepreneurial economy. a. Steve Jobs b. b. Peter Drucker c. Mike Boyer d. Marc Weinstein e. Sam Goody Answer: b Answer: b Answer: b ____ can be defined as the activity that transforms a set of requirements into a format that brings

The vision that guides a company in the right direction is expressed through its ____. a. core values b. purpose c. mission d. goals e. All of these choices Answer: e Answer: e Answer: e The illumination step in Wallas's creative process brings the idea to an outcome. a. True b. False Answer: False Answer: False Answer: False Through giving something back to the

Outsourced staff typically have a high turnover rate because ____________, so it is important for the entrepreneur to create a culture that encourages the staff to stay with the business long term. a. the average age is 25 b. of communication issues c. there are not enough workers d. equipment is too expensive e. none

Good SCM enables your company to forecast demand, match supply with demand, and fulfill the demand through optimal distribution channels. a. True b. False Answer: True Answer: True Answer: True Which of the following is not a component of a business model? a. Pricing model b. Revenue model c. Value proposition d. Internet commerce e. Action plan Answer: e' Answer: e' Answer: e' Entrepreneurs

A new industry goes through volatile and rapid changes as companies and their respective technologies jockey for position and the right to determine industry standards. This is what stage of the industry life cycle? a. Birth b. Shakeout c. Differentiation and competition d. Growth and adaptation e. Maturity and decline Answer: d Answer: d Answer: d Business concepts are

Business models can change by: a. Incrementally expanding the existing model geographically b. Revitalizing an established model c. Taking an existing model into a new area d. All of the above e. A and C only Answer: d Answer: d Answer: d Poor execution in product development results in missed opportunities to enter the market at a quiet time

The three key factors for determining value in real estate are ____. a. location, location, and location b. economic base, financial incentives, and demographics c. trade area, competition, and demographics d. accessibility, cost of labor, and technology e. location, competition, and cost Answer: a Answer: a Answer: a Discovery theory and creation theory help explain how entrepreneurial opportunities

____ represent(s) how the startup uses its cash to cover its overhead before it generates a positive cash flow from operations. a. Monthly burn rate b. Contribution margin c. Financial metrics d. Bootstrapping e. Process map Answer: a Answer: a Answer: a Closing the door, shutting off the phone, and turning off email to prepare to do some

Which of the following is not a technique that can help entrepreneurs arrive at a realistic forecast of demand for their product or service? a. Talk to customers Interview prospective end-users and intermediaries c. Prepare revenue forecasts d. Apply the entrepreneur's knowledge and experience e. Go into limited production Answer: c Answer: c Answer: c Strategies are the