22) A competitive advantage can be based on any of six factors. Which of the following is not
one of the six?
A) Selection
B) Opportunity
C) Quality
D) Cost
E) Service
Learning Obj.: LO 3
AACSB: Analytical thinking
23) In analyzing your competitive advantage, you will need to ask three questions. Among these
is/are ________.
A) Competitive offers: How do you compare with competitors on a feature-by-feature basis?
B) Cost structure: Are you at a cost advantage or disadvantage?
C) What is your unique selling proposition: What do you have that competitors cannot or will not
match?
D) Both A and B
E) All of the above
Learning Obj.: LO 3
AACSB: Analytical thinking
24) When you start your business, your ________ will guide the business operations and
decisions.
A) Core beliefs
B) Track record
C) Competitive offers
D) Guiding light
E) Core theories
Learning Obj.: LO 2
AACSB: Analytical thinking
7
25) If the Foreign Exchange rate between the Japanese yen and the euro is 190:1, how many yen
will equal 10 euros?
A) 1900
B) 1800
C) 2000
D) 300
E) 500
Learning Obj.: LO 4
AACSB: Application of knowledge
26) The business definition has three elements: ________.
A) Offer, target market, and production/delivery capability
B) Offer, acceptance, and consideration
C) Business definition, target market, and market analysis
D) Target market, potential customers, and production capability
E) None of the above
Learning Obj.: LO 1
AACSB: Analytical thinking
27) Giovanni’s entrepreneurial venture produces a tangible product. This is an example of a
________ venture.
A) Service
B) Wholesale
C) Manufacturing
D) None of the above
E) All of the above
Learning Obj.: LO 1
AACSB: Analytical thinking
28) What type of business buys in bulk from a manufacturer and sells smaller quantities to a
retailer?
A) Wholesaler
B) Attorney
C) Consumer driven
D) Service firm
E) All of the above
Learning Obj.: LO 1
AACSB: Analytical thinking
8
29) Once you know your ________ you can calculate gross profit.
A) Cost of goods sold
B) Unit of sale
C) Gross cost
D) Profit
E) Fixed costs
Learning Obj.: LO 4
AACSB: Analytical thinking
30) For a business to be successful, a competitive advantage must be ________.
A) Sustainable
B) Profitable
C) Legal
D) Expensive
E) Clever
Learning Obj.: LO 2
AACSB: Analytical thinking
31) A manufacturing type of business sells an intangible product to businesses or consumers.
Learning Obj.: LO 1
AACSB: Analytical thinking
32) You only need to be concerned with having a competitive advantage over direct competitors.
Learning Obj.: LO 2
AACSB: Reflective thinking
33) A unique selling proposition is the distinctive feature and benefit that sets you apart from
your competition.
Learning Obj.: LO 3
AACSB: Analytical thinking
34) Leaders of a company build a particular culture by making the beliefs, values, and behavioral
norms explicit and intentional.
Learning Obj.: LO 2
AACSB: Analytical thinking
9
35) An offer includes the complete bundle of products and services the entrepreneur will be
bringing to the marketplace.
Learning Obj.: LO 1
AACSB: Analytical thinking
36) The function of a mission statement is to clarify what the business is trying to do in the
present, but it can provide direction and motivation for future action through a clear and
compelling message.
Learning Obj.: LO 2
AACSB: Reflective thinking
37) Core values include the fundamental ethical and moral philosophy and beliefs that form the
foundation of the organization and provide broad guidance for all decision making.
Learning Obj.: LO 2
AACSB: Reflective thinking
38) The offer can be defined as what the business will sell to customers.
Learning Obj.: LO 1
AACSB: Analytical thinking
39) A tactic is a plan for outperforming the competition.
Learning Obj.: LO 3
AACSB: Reflective thinking
40) The vision for your business is narrower and less comprehensive than its mission.
Learning Obj.: LO 2
AACSB: Analytical thinking
41) Competitive advantage must be sustainable over the long term.
Learning Obj.: LO 2
AACSB: Reflective thinking
10
42) Barriers to entry are the factors that contribute to the ease or difficulty of a new competitor’s
joining an established market.
Learning Obj.: LO 3
AACSB: Analytical thinking
43) The decision process can occur in three different ways, all of which are market driven.
Learning Obj.: LO 2
AACSB: Analytical thinking
44) A target market can never be too broad and unfocused.
Learning Obj.: LO 1
AACSB: Analytical thinking
45) Economic forces, social forces, technological advances, and political and regulatory changes
are not sources for finding competitive advantage.
Learning Obj.: LO 3
AACSB: Analytical thinking
46) Briefly describe a product or service idea (e.g., a bookstore) and describe how you might
create a competitive advantage.
Learning Obj.: LO 3
AACSB: Reflective thinking
47) Before you can start your business, you must define it. Describe the questions that the
business definition answers and its three elements.
Learning Obj.: LO 1
AACSB: Analytical thinking
11
48) Describe the six factors of competitive advantage.
Learning Obj.: LO 3
AACSB: Analytical thinking
49) Why is it a good idea to figure out your Economics of One Unit?
Learning Obj.: LO 4
AACSB: Analytical thinking
50) How do you decide whether your competitive advantage is strong enough? Give an example.
Learning Obj.: LO 3
AACSB: Analytical thinking
12