Entrepreneurship: Successfully Launching New Ventures

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Entrepreneurship: Successfully Launching New Ventures, 6e (Barringer/Ireland)

Chapter 2 Recognizing Opportunities and Generating Ideas

1) Wiivv, the company profiled in the opening feature of Chapter 2, is in the 3D printing

business of footwear insoles. To manufacture the insoles, the company uses a process called

________ manufacturing.

A) structured

B) adhesive

C) bounded

D) batch

E) adaptive

Answer: E

Diff: 2

LO: 2.1: Explain the difference between opportunities and ideas.

AACSB: Analytical Thinking

Quest. Category: Critical Thinking

2) A(n) ________ is a favorable set of circumstances that creates a need for a new product,

service, or business.

A) idea

B) scheme

C) design

D) proposal

E) opportunity

Answer: E

Diff: 1

LO: 2.1: Explain the difference between opportunities and ideas.

AACSB: Reflective Thinking

Quest. Category: Analytical

3) According to the textbook, opportunities are ________.

A) easy to spot

B) easy to spot in fast growing industries, but tough to spot in slow growing industries

C) easy to spot in the manufacturing sector, but tough to spot in the service sector

D) tough to spot

E) neither easy nor tough to spot

Answer: D

Diff: 2

LO: 2.1: Explain the difference between opportunities and ideas.

AACSB: Reflective Thinking

Quest. Category: Critical Thinking

2

4) An opportunity has the following four essential qualities: ________.

A) attractive; timely; durable; and anchored in a product, service, or business that creates or adds

value for its buyer or end user

B) practical; opportune; appropriate; and anchored in a product, service, or business that is

efficient and effective

C) realistic; striking; timely; and anchored in a product, service, or business that is timely

D) attention-getting; attractive; timely; and anchored in a product, service, or business that

creates or adds value for its buyer or end user

E) attractive, durable, resilient, and opportune

Answer: A

Diff: 2

LO: 2.1: Explain the difference between opportunities and ideas.

AACSB: Reflective Thinking

Quest. Category: Critical Thinking

5) Brad Johnson is starting an upscale men’s clothing store in a mall near Seattle. He wants to

open his store during the time period in which a business like his can realistically enter the new

market. Brad is trying to open his business while the ________ is open.

A) safe harbor

B) window of opportunity

C) portal of entry

D) doorway of opportunity

E) safety zone

Answer: B

Diff: 2

LO: 2.1: Explain the difference between opportunities and ideas.

AACSB: Reflective Thinking

Quest. Category: Critical Thinking

6) The term “window of opportunity,” as discussed in Chapter 2, is a metaphor that describes the

time period in which a firm can ________.

A) obtain funding or financing

B) hire new employees

C) complete a financial analysis

D) realistically enter a new market

E) write a business plan

Answer: D

Diff: 2

LO: 2.1: Explain the difference between opportunities and ideas.

AACSB: Reflective Thinking

Quest. Category: Critical Thinking

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7) Which of the following is correct regarding opportunities and ideas?

A) An opportunity and an idea are essentially the same thing.

B) An idea almost always meets the criteria of an opportunity.

C) An opportunity is a thought, an impression, or a notion.

D) An idea is a favorable set of circumstances that creates a need for a new product, service, or

business.

E) It’s important to discern whether a particular idea meets the criteria for an opportunity.

Answer: E

Diff: 2

LO: 2.1: Explain the difference between opportunities and ideas.

AACSB: Analytical Thinking

Quest. Category: Analytical

8) A(n) ________ is a favorable set of circumstances that creates the need for a new product,

service, or business. A(n) ________ is a thought, an impression or a notion.

A) scheme, notion

B) opportunity, idea

C) idea, design

D) idea, opportunity

E) notion, scheme

Answer: B

Diff: 1

LO: 2.1: Explain the difference between opportunities and ideas.

AACSB: Reflective Thinking

Quest. Category: Critical Thinking

9) Jessica Smith is thinking about starting a chain of fitness centers for young adults ages 18-30.

Which of the following is NOT an appropriate criterion for Jessica to test her idea against?

A) Determine whether the “window of opportunity” is open.

B) Determine whether a fitness center for young adults ages 18-30 meets the threshold of being a

good idea.

C) Determine the extent to which the notion takes advantage of an environmental trend, solves a

problem, or fills a gap in the marketplace.

D) Determine whether opening a fitness center for young adults ages 18-30 is timely.

E) Determine whether opening a fitness center for young adults ages 18-30 is a concept that

creates value for its buyer or end user.

Answer: B

Diff: 2

LO: 2.1: Explain the difference between opportunities and ideas.

AACSB: Reflective Thinking

Quest. Category: Critical Thinking

4

10) An idea is a favorable set of circumstances that creates a need for a new product, service, or

business.

Answer: FALSE

Diff: 1

LO: 2.1: Explain the difference between opportunities and ideas.

AACSB: Reflective Thinking

Quest. Category: Critical Thinking

11) An opportunity has four essential qualities. It is (1) rare, (2) attractive, (3) timely, and (4)

anchored in a product, service, or business that creates or adds value for its buyer or end user.

Answer: TRUE

Diff: 2

LO: 2.1: Explain the difference between opportunities and ideas.

AACSB: Analytical Thinking

Quest. Category: Analytical

12) The term “window of opportunity” is a metaphor describing the time period in which a firm

can realistically raise money.

Answer: FALSE

Diff: 2

LO: 2.1: Explain the difference between opportunities and ideas.

AACSB: Reflective Thinking

Quest. Category: Critical Thinking

13) An idea is a thought, impression, or notion. It may or may not meet the criteria of an

opportunity.

Answer: TRUE

Diff: 1

LO: 2.1: Explain the difference between opportunities and ideas.

AACSB: Reflective Thinking

Quest. Category: Critical Thinking

14) Describe the difference between an idea and an opportunity. Why is the distinction

important?

Answer: An opportunity is a favorable set of circumstances that creates a need for a new

product, service, or business. An opportunity has four essential qualities. It is (1) attractive, (2)

durable, (3) timely, and (4) is anchored in a product, service, or business that creates or adds

value for its buyer or end user. In contrast, an idea is a thought, impression, or notion. It may or

may not meet the criteria of an opportunity. This distinction between an idea and an opportunity

is important because many entrepreneurial ventures fail not because the entrepreneurs that

launched them didn’t work hard, but rather because there was no real opportunity to begin with.

Diff: 1

LO: 2.1: Explain the difference between opportunities and ideas.

AACSB: Analytical Thinking

Quest. Category: Critical Thinking

5

15) The three ways to identify an opportunity include ________.

A) observing trends, solving a problem, and finding gaps in the marketplace

B) studying industry trade journals, talking to consumers, and solving a problem

C) observing trends, conducting brainstorming sessions, and studying industry trade journals

D) observing trends, talking to consumers, and finding gaps in the marketplace

E) reading books, solving a problem, and findings gaps in the marketplace

Answer: A

Diff: 2

LO: 2.2: Describe the three general approaches entrepreneurs use to identify opportunities.

AACSB: Reflective Thinking

Quest. Category: Critical Thinking

16) GasBuddy is a company started to help consumers save money on gas. Which environmental

trend is most likely to have provided the impetus for the creation of this company?

A) Regulatory changes

B) Political changes

C) Economic forces

D) Technological advances

E) Social forces

Answer: C

Diff: 2

LO: 2.2: Describe the three general approaches entrepreneurs use to identify opportunities.

AACSB: Analytical Thinking

Quest. Category: Analytical

17) Economic forces impact the opportunities available to entrepreneurs. Which of the following

alternatives reflects a set of economic forces that would be of interest to entrepreneurs?

A) Level of disposable income, new uses of old technologies, and new laws and regulations

B) New technologies, consumer spending patterns, and new laws

C) Housing starts, consumer spending patterns, and stability of interest rates

D) Social and cultural trends, level of interest rates, and what people think is “in”

E) New changes in political areas, new laws, and level of disposable income

Answer: C

Diff: 2

LO: 2.2: Describe the three general approaches entrepreneurs use to identify opportunities.

AACSB: Reflective Thinking

Quest. Category: Critical Thinking

6

18) Which of the following is NOT an example of a social force?

A) Changes in interest rates

B) Increasing participation in social networks

C) Increasing diversity of the workplace

D) Aging of the population

E) Continual migration of people from small towns and rural areas to cities

Answer: A

Diff: 2

LO: 2.2: Describe the three general approaches entrepreneurs use to identify opportunities.

AACSB: Reflective Thinking

Quest. Category: Critical Thinking

19) An increased focus on health and wellness has resulted in a number of new business ideas

including healthier foods and beverages, yoga instruction and training centers, and nutrition

consulting. An increased focus on health and wellness is an important ________ that is creating

opportunities in many areas for entrepreneurial firms.

A) economic force

B) regulatory force

C) legal force

D) technological advances

E) social force

Answer: E

Diff: 2

LO: 2.2: Describe the three general approaches entrepreneurs use to identify opportunities.

AACSB: Reflective Thinking

Quest. Category: Critical Thinking

20) The increasing number of social networks on the Internet is attributed to a jump in the

number of people who are wanting to connect with one another online. The increasing number of

social networks is an important ________ trend.

A) political

B) economic

C) legal

D) social

E) demographic

Answer: D

Diff: 2

LO: 2.2: Describe the three general approaches entrepreneurs use to identify opportunities.

AACSB: Reflective Thinking

Quest. Category: Critical Thinking

21) Hulu.com allows people to watch television shows and movies on the Internet. Hulu.com’s

business opportunity was made possible by ________ that enhanced the ability of television

shows and movies to be uploaded to the Internet and played by anyone with a suitable computer

and an Internet connection.

A) social forces

B) technological advances

C) legal changes

D) regulatory changes

E) economic forces

Answer: B

Diff: 2

LO: 2.2: Describe the three general approaches entrepreneurs use to identify opportunities.

AACSB: Reflective Thinking

Quest. Category: Critical Thinking

22) If a new firm was launched to help businesses comply with The Affordable Care Act, that

opportunity was created by ________.

A) changes in economic forces

B) demographic changes

C) changes in social forces

D) changes in technological forces