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a. increases both the attractiveness and the profitability of the target market.
b. decreases both the attractiveness and the profitability of the target market.
c. decreases the attractiveness and increases the profitability of the target market.
d. increases the attractiveness and decreases the profitability of the target market.
87. When conducting an outside-in analysis, one should consider the _____ environment followed by the _____
environment.
a. general; industry
b. general; natural
c. industry; natural
d. industry; political
88. Julie, owner of a bed and breakfast inn, had been asked repeatedly to cater events. Once she realized her kitchen was
not being used during the later part of the day, she started the company. This change is an example of
a. recognizing a hot trend and riding the wave.
b. combining two businesses into one to create a market opening.
c. beginning with a problem in mind.
d. considering ways to adapt a product or service to meet customer needs in a different way.
89. Carol enjoyed yarn crafts but there were no yarn shops in her small town. She reasoned that there were many others
nearby who might appreciate being able to purchase yarns and supplies without a long drive. Within a year her shop was
profitable and expanding into larger space. Which of these statements best describes this situation?
a. Carol grew a business out of her personal experience. b. Carol
turned her hobby into a thriving business.
c. Carol accidentally stumbled upon a gold mine. d. Carol used her
work experience as a source of startup ideas.
90. An example of an idea for a new startup from an accidental discovery is
a. a coin collector, who bought and sold coins for years to build a personal collection, deciding to become a coin
dealer.
b. a furniture salesperson seeing the possibility of opening a new furniture store in a different area of the city.
c. a sharpshooter, who shot holes in a pair of her boyfriend’s jeans during an argument, hearing him get
complimented on the way they look.
d. all of the above are examples.
91. _____ refers to the way entrepreneurs identify new products or services that may lead to promising businesses.
a. Focus-based decisions
b. Elasticity
c. Opportunity recognition
d. Cost-benefit analysis
92. Tangible resources include:
a. cash, technology, and raw materials. b. cash, management
expertise, and a good reputation
c. management expertise, a good reputation, and technology. d.
intellectual property rights, equipment, and a skilled workforce.
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93. A computer technician recognizing a need for more aesthetically pleasing computers would be said to have
entrepreneurial _____.
a. technology
b. alertness
c. strategy
d. rivalry
Enter the appropriate word(s) to complete the statement.
94. The very feature of a market that makes it attractive to one small company (the lack of competition) will make it
attractive to others; this fact is called the __________ ___ ___________.
a. cost-based strategy
b. focus strategy
c. general environment
d. industry environment
e. inside-out analysis
f. intangible resources
g. new benefit ideas
h. new market ideas
i. new technology ideas
95. An assessment that catalogs the startup’s sources of potential strengths
96. A plan of action that isolates an enterprise from competitors and other market forces by targeting a restricted market
segment
97. Startup ideas centered around providing customers with new or improved products or services
98. A plan of action that requires a firm to hold down its costs so that it can compete by charging lower prices and still
make a profit
99. The environment that includes factors that directly impact a given firm and all of its competitors
100. Startup ideas involving new or relatively new technology, centered around providing customers with a new product
101. The broad environment, encompassing factors that influence most businesses in a society
102. Those organizational resources that are invisible and difficult to assess
a. opportunity recognition
b. outside-in analysis
c. pivot
d. resources
e. serendipity
f. startups
g. strategy
h. SWOT analysis
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i. tangible resources
j. paradox of attraction
103. To refocus or recreate a startup if the initial concept turns out to be flawed
104. A plan of action that coordinates the resources and commitments of an organization to achieve superior performance
105. Identification of potential new products or services that may lead to promising businesses
106. The basic inputs that a firm uses to conduct its business
107. Those organizational resources that are visible and easy to measure
108. The study of the general and industry environments of a business context to identify potential startup opportunities
109. An assessment that provides a concise overview of a firm’s strategic situation
110. A facility for making desirable discoveries by accident
111. The idea that an attractive market opportunity will draw competitors, diminishing its attractiveness
a. capabilities
b. competitive advantage
c. competitive environment
d. core competencies
e. cost-based strategy
f. differentiation strategy
g. entrepreneurial alertness
h. fatal flaw
i. feasibility analysis
112. A benefit that exists when a firm has a product or service that is seen by its target market as better than those of
competitors
113. Readiness to act on existing but unnoticed business opportunities
114. Those capabilities that provide a firm with a competitive edge and reflect its personality
115. A preliminary assessment of a business idea that gauges whether the venture envisioned is likely to succeed
116. A company’s routines and processes that can coordinate the combined use of its productive assets in order to achieve
desired outcomes
117. A circumstance or development that alone could render a new business unsuccessful
118. A plan of action designed to provide a product or service with unique attributes that are valued by consumers
119. The environment that focuses on the strength, position, and likely moves and countermoves of competitors in an
industry
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120. Name and describe the two broad-based strategy options that a firm can select when pursuing a competitive
advantage in the marketplace.
121. What marketing activities suggest that a small firm is following a focus strategy?
122. Briefly state the difference between a market and an industry. How are these two items related to small business
success?
123. Describe the differences and relationships between resources, capabilities and core competencies. How do these
items relate to inside-out analysis?
124. List the five factors that determine the nature and degree of competition in an industry, as presented by Michael
Porter in his book Competitive Advantage. Why is the proper identification of these factors important for a new venture?
125. Compare and contrast personal experience, hobbies and personal interests, and accidental discovery as a source of
startup ideas. Use examples to strengthen the discussion.
126. Identify and discuss the five factors entrepreneurs should consider when screening new business ideas.
127. Select one of the ways of innovative thinking, explain it, and give an example of a business idea this type of thinking
might generate.
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Answer Key
1. False
2. False
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26. d
27. a
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52. b
53. d
54. c
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103. c
104. g
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