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Entrepreneurship: Successfully Launching New Ventures, 6e (Barringer/Ireland)
Chapter 3 Feasibility Analysis
1) Owlet Baby Care, the company profiled in the opening feature of Chapter 3, produces a
“smart sock” that can be used to monitor a baby via an app. The feature describes how Owlet
Baby Care’s founders accidentally validated their business idea when ________.
A) they went on Kickstarter to raise funds
B) they won a business plan competition
C) they were featured on CNBC’s Shark Tank
D) parents began inquiring about the product after a video of a mockup of the product somehow
got out
E) a big company made a pitch to acquire them
2) ________ is the process of determining whether a business idea is viable.
A) Feasibility analysis
B) Opportunity recognition
C) Viability analysis
D) Achievability analysis
E) Scenario analysis
3) ________ research is research that is collected by the person or persons completing the
analysis. ________ research probes data that is already collected.
A) Primary, Derivative
B) Secondary, Primary
C) Primary, Secondary
D) Indirect, Direct
E) Direct, Indirect
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4) Cynthia Jones recently surveyed 200 of her classmates to get a sense of the demand for a new
software product she is working on. Collecting data via a survey you administer yourself is
referred to as ________ research.
A) direct
B) derivative
C) primary
D) secondary
E) initial
5) Talking to industry experts, obtaining feedback from prospective customers, and
administering surveys are examples of ________ research.
A) primary
B) secondary
C) derivative
D) principal
E) fundamental
6) Trade journals, industry-related publications, government statistics, and competitors’ Web
sites are examples of ________ research.
A) secondary
B) action
C) principal
D) legacy
E) vertical
7) Jennifer Burroughs is thinking about starting a firm in the upscale women’s fashion industry.
To get a full appreciation of the competitive nature of the industry, and how she might position
her products, Jennifer has spent considerable time looking at industry-related publications,
Hoover’s Online, and ABI-Inform, which is a database that provides access to articles covering a
wide-variety of business and industry related issues. Jennifer is conducting ________ research.
A) primary
B) secondary
C) action
D) temporary
E) purposeful
8) Which of the following is NOT one of the four areas of feasibility analysis discussed in the
textbook?
A) Product/service feasibility
B) Financial feasibility
C) Societal feasibility
D) Organizational feasibility
9) Feasibility analysis is the process of determining if a business idea is viable.
10) A feasibility analysis is an assessment of a potential product or service idea rather than a
potential business.
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11) The four forms of feasibility analysis include: product/service feasibility, industry/target
market feasibility, organizational feasibility, and financial feasibility.
12) Primary research probes data that is already collected.
13) Census Bureau data, analyst forecasts, and other pertinent information gleaned through
library and Internet research are examples of primary research.
14) Describe the purpose of feasibility analysis. When should a feasibility analysis be conducted
relative to opportunity recognition and the development of a business plan?
15) ________ feasibility is an assessment of the overall appeal of the product or service being
proposed.
A) Consumer
B) Industry/market segment
C) Industry/market
D) Product/service
E) Purchaser/end-user
16) The two components of product/service feasibility analysis are product/service ________
and product/service ________.
A) value; affordability
B) demand; timeliness
C) timeliness; value
D) durability; value
E) desirability; demand
17) Does it make sense? Is it reasonable? Is it something consumers will get excited about? Does
it take advantage of an environmental trend, solve a problem, or fill a gap in the marketplace?
These are the types of questions asked during the ________ feasibility component of a complete
feasibility analysis.
A) financial
B) industry/target market
C) organizational
D) concept
E) product/service
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18) Which of the following is NOT a part of assessing the product/service feasibility of a
business idea?
A) “Get out of the building” and talk to potential customers
B) Surveying potential customers
C) Library research
D) Analyzing industry attractiveness
E) Concept test
19) A(n) ________ involves showing a preliminary description of a product or service idea to
prospective customers to gauge customer interest, desirability, and purchase intent.
A) concept test
B) product/service statement
C) impression test
D) idea prospectus
E) idea test
20) Which of the following items is typically NOT included in a concept statement?
A) A brief description of the company’s management team
B) A description of how the product or service will be sold and distributed
C) A description of how much money the new venture needs
D) The benefits of the product or service
E) The intended target market
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21) Tracy Brady is in the process of developing an exciting new product in the smartphone
industry. She’d like to show a preliminary description of the product to industry experts and
prospective customers to solicit their feedback. Tracy should complete and distribute a(n)
________ statement.
A) perception
B) usability
C) early adopter
D) concept
E) adoption risk-reward
22) Which of the following is an incorrect approach to administering a concept test?
A) The concept statement shouldn’t exceed one page.
B) After the concept statement is developed, it should be shown to at least 10 people.
C) The best candidates to distribute a concept statement to are family and friends.
D) If time permits, a concept statement should be used in an iterative manner and distributed to
several groups of people.
E) A short survey should be attached to the concept statement to solicit feedback.
23) A/B split testing, landing pages, prototyping services, and Web site usability testing are all
online tools available to assist in the ________ stage of developing a business idea.
A) opportunity recognition
B) feasibility analysis
C) business model
D) business plan
E) growth plan
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24) 3 Minute Optimizer and Optimizely are Web sites that provide access to ________.
A) 3D printing services
B) Web site usability testing
C) online whiteboarding services
D) A/B split testing services
E) feedback on business ideas
25) Growth Hackers, Meetup and Reddit are Web sites that provide access to ________.
A) feedback on business ideas
B) landing pages
C) surveys
D) prototyping services
E) market research
26) Three commonly utilized methods for determining product/service demand are ________.
A) assessing the overall financial attractiveness of the proposed venture, talking face-to-face
with potential customers, and assessing industry attractiveness
B) analyzing the financial performance of other businesses, talking face-to-face with potential
customers, and assessing target market attractiveness
C) assessing target market attractiveness; utilizing online tools, such as Google AdWords and
landing pages; and calculating total startup cash needed
D) assessing industry attractiveness; library, Internet and gumshoe research; and talking face-to–
face with friends and family
E) talking face-to-face with potential customers; utilizing online tools, such as Google AdWords
and landing pages; and library, Internet and gumshoe research
27) Katlin Smith is investigating the feasibility of developing an iPhone app to help high school
students with math. To get a good handle on the potential demand for her service, Katlin is
scrounging around for information wherever she can find it. She even spent two weeks
volunteering as a math tutor at a local high school to see how students responded to her methods.
Katlin is conducting ________ research.
A) parallel
B) derivative
C) gumshoe
D) secondary
E) on-the-ground
28) Conner Brandshaw is investigating the feasibility of a new type of electronic game targeting
middle school and high school-age boys. Which of the following is an example of “gumshoe
research” that Conner could conduct to get a sense of the likely demand for his game?
A) Download electronic games industry reports from the Internet.
B) Administer a buying intentions survey.
C) Administer a concept test.
D) Look at the Web sites of a number of companies that sell electronic games.
E) Spend several days in electronic games arcades and stores to observe the types of games that
attract the interest of middle school age and high school age boys.
29) According to the textbook, the only way to know if your product or service is what people
want and need is by ________.
A) interviewing industry experts
B) library, Internet and gumshoe research
C) conducting brainstorming sessions
D) talking to them
E) surveying them
30) A ________ is a single Web page that typically provides direct sales copy, like “click here to
buy a Hawaiian vacation.”
A) sales page
B) marketing page
C) destination page
D) call for action page
E) landing page
31) The Savvy Entrepreneurial Firm feature in Chapter 3 focuses prototyping. According to the
feature, a prototype is ________.
A) observing how customers acted when buying their product
B) studying industry trends
C) conducting Internet research
D) an early sample, model, or release of a product that is built to test a concept or a process
E) hiring consultants to provide them advice
32) Product/service feasibility analysis is an assessment of the overall appeal of the product or
service being proposed.
33) The two components to product/service feasibility analysis are product/service desirability
and total startup funds needed.
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34) A concept statement should be two to three pages long.
35) The temptation to show a concept statement to friends and family members should be
avoided because they are predisposed to give positive feedback.
36) Unassumer is a Web site that allows you to submit product ideas to a community that vets
and provides feedback on the ideas.
37) Describe what a concept statement is, and what it should include.
38) What is gumshoe research and why is it important?
39) A(n) ________ is a group of firms producing a similar product or service. A firm’s ________
is the limited portion of the industry that it goes after or to which it wants to appeal.
A) target market; industry
B) trade group; industry
C) industry; trade group
D) competitive group; target market
E) industry; target market
40) The two components of industry/target market feasibility analysis are industry ________.
A) status and target market status
B) attractiveness and target market attractiveness
C) sufficiency and target market demand
D) attractiveness and product/service demand
E) evolution and target market attractiveness