The two components of industry/target market feasibility analysis are:
A) industry status and target market status
B) industry attractiveness and target market attractiveness
C) industry sufficiency and target market demand
D) industry attractiveness and product/service demand
E) industry evolution and target market attractiveness
Answer:
The Partnering for Success feature in Chapter 8 focuses on buying groups, and
recommends that small businesses seek out buying groups to participate in. What is a
“buying group” in the context of the feature?
A) a partnership that bands small businesses together to attain volume discounts on
common products and services that they buy
B) a partnership that bands small businesses together to collectively make the
commitment to “buy local” at every available opportunity
C) a partnership that bands small businesses together to get the best prices possible
from foreign importers and manufacturers
D) a partnership that bands small businesses together to get the best possible terms from
finance companies
E) a partnership that bands small businesses together to get the best possible rates on
property and liability insurance
Answer:
Melissa Jones just launched a firm in the wireless communications industry. Shortly
after the company was launched, Melissa announced that a prominent Silicon Valley
venture capitalist had agreed to serve on her board of directors. Melissa knows that such
a high quality appointment will send an important message to her potential business
partners and clientele. This phenomenon is referred to as:
A) trumping
B) championing
C) profiling
D) signaling
E) indicating
Answer:
Internally generated growth is often called ________ growth because it does not rely on
outside intervention.
A) natural
B) whole
C) expected
D) organic
E) ordinary
Answer:
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.
Answer:
For startup firms, the cost of buying real estate, building facilities, and purchasing
equipment often exceeds the firm’s ability to provide funds for those needs on its own.
Which of the following reasons that motivate firms to seek funding or financing is
illustrated in this example?
A) lengthy product development cycles
B) costs associated with building a brand
C) cash flow challenges
D) capital investments
E) personnel costs
Answer:
The Partnering for Success feature in Chapter 6 focuses on 99designs, an online
company that features a “crowdsourcing” model for getting design work done.
99designs’ approach to partnering with ________ is the essence of its disruptive
business model.
A) professional art studios
B) freelance designers
C) art students
D) Google, Yahoo, and Microsoft
E) art teachers
Answer:
A firm’s ________ is its current assets divided by its current debt.
A) working share
B) present share
C) working capital
D) owners’ equity
E) current ratio
Answer:
________ patents are the second most common type of patent and cover the invention
of new, original, and ornamental designs for manufactured products.
A) Aesthetic
B) Utility
C) Visual
D) Blueprint
E) Design
Answer:
The ________ section of a business plan breaks the industry into segments and zeroes
in on the specific segment (or target market) to which the firm will try to appeal.
A) competitive analysis
B) current status
C) market analysis
D) marketing plan
E) operations plan
Answer:
A(n) ________ industry is an industry that is experiencing slow or no increase in
demand.
A) declining
B) global
C) mature
D) emerging
E) fragmented
Answer:
A(n) ________ is a chart that depicts the most important skills that are needed in a new
venture and where skills gaps exist.
A) expertise report
B) talent profile
C) abilities summary
D) skills profile
E) talent summary
Answer:
Which of the following is an example of an external growth strategy?
A) licensing
B) improving an existing product or service
C) increasing the market penetration of an existing product or service
D) extending product lines
E) geographic expansion
Answer:
According to the textbook, a brand is all of the following except:
A) reputation
B) collection of memories
C) a pledge
D) a promise
E) a written warranty
Answer:
Most founders’ agreements include a ________, which legally obligates the departing
founder to sell to the remaining founders his or her interest in the firm if the remaining
founders are interested.
A) redemption clause
B) buyback clause
C) statutory purchase clause
D) voluntary recoup clause
E) shareholder surrender clause
Answer:
William Woods recently launched a printing company. One thing William is thinking
about creating is a panel of experts who can provide him ongoing direction and advice
regarding the future of his business. William is thinking about creating a(n):
A) analysis panel
B) discussion board
C) advisory board
D) suggestion panel
E) accountability panel
Answer:
A firm’s pro forma financial statements are similar to its historical financial statements
except that:
A) they do not include the income statement
B) they are required by the SEC in all cases
C) they look back rather than forward
D) they look forward rather than back
E) they do not include the statement of cash flows
Answer:
Which of the following is an advantage of a C Corporation?
A) Setting up and maintaining one is more difficult than for a sole proprietorship or a
partnership.
B) Stock is liquid if traded on a major stock exchange.
C) Business losses cannot be deducted against the shareholders’ other sources of
income.
D) Income is subject to double taxation.
E) Small shareholders typically have little voice in the management of the firm.
Answer:
A board of directors is typically made up of both inside and ________ directors.
A) leading
B) subordinate
C) specialist
D) outside
E) impartial
Answer:
According to the textbook, there are three types of startup firms:
A) lifestyle firms, general firms, and entrepreneurial firms
B) standard-of-living firms, statutory firms, and general firms
C) entrepreneurial firms, standard-of-living firms, and statutory firms
D) lifestyle firms, salary-substitute firms, and entrepreneurial firms
E) innovative firms, entrepreneurial firms, and standard firms
Answer:
According to Penrose, ________ generate new market, product and service ideas, while
________ administer the routine functions of the firm and facilitate the profitable
execution of new opportunities.
A) managerial services, entrepreneurial services
B) administrative services, business services
C) entrepreneurial services, managerial services
D) business services, commercial services
E) commercial services, administrative services
Answer:
A ________ is the group of founders, key employees, and advisers that move a new
venture from an idea to a fully functioning firm.
A) new venture panel
B) startup team
C) new venture team
D) new project team
E) startup cadre
Answer:
Which of the following qualities was not identified in the textbook as a preferred
attribute of the founder or founders of a firm?
A) prior entrepreneurial experience
B) firm started by a team
C) relevant industry experience
D) prior experience working in a government or university position
E) higher education
Answer:
The members of homogeneous teams are:
A) diverse in terms of their abilities and experiences
B) diverse in terms of their abilities, but very similar in terms of their experiences
C) similar in terms of their abilities and experiences
D) diverse in terms of their experiences, but very similar in terms of their abilities
E) sometimes diverse in terms of their abilities and experiences and sometimes similar
along the same dimensions
Answer:
The strength and vigor of a firm’s overall financial posture is referred to as:
A) liquidity
B) effectiveness
C) stability
D) profitability
E) efficiency
Answer:
Which of the following was not identified in the textbook as a nontraditional barrier to
entry?
A) inventing a new approach to an industry and executing the idea in an exemplary
fashion
B) unique business model
C) capital requirements
D) strength of management team
E) passion of management team and employees
Answer:
Jared King is starting a firm in the electronic games industry. The firm will produce
games similar to popular games on the market, but they won’t be as sophisticated and
will be priced at the low end of the market. Jared has chosen the generic strategy
referred to as:
A) price reduction
B) differentiation
C) quality plus
D) cost leadership
E) cost differentiation
Answer:
Catherine Smith has just finished writing a business plan for a startup in the medical
products industry. She has now reached the point where she needs to develop a plan for
how her firm will compete, use its resources, structure its relationships, interface with
customers, and create value to sustain itself on the basis of the profits it earns. Jennifer
needs to establish her firm’s:
A) tactical plan
B) feasibility plan
C) business model
D) business template
E) operating plan
Answer:
Shelly Ford is starting a fashion boutique in an upscale mall near San Antonio. She
wants to open her store during the time period in which a business like hers can
realistically enter the new market. Shelly is trying to open her business while the
________ is open.
A) safe harbor
B) window of opportunity
C) portal of entry
D) doorway of opportunity
E) safety zone
Answer:
The ________ provides a firm a sense of how its activities will affect its ability to meet
its short-term liabilities and how its finances will evolve over time.
A) pro forma balance sheet
B) pro forma statement of cash flows
C) pro forma income statement
D) pro forms expense statement
E) pro forma statement of owners’ equity
Answer:
Entrepreneurial firms:
A) are small firms that yield a level of income for their owner or owners that is similar
to what they would earn when working for an employer
B) bring to market new products and services that are not particularly innovative
C) offer to customers common products that are not particularly innovative, and provide
their owner or owners the opportunity to pursue a particular lifestyle and earn a living
while doing so
D) provide their owner or owners the opportunity to pursue a particular lifestyle and
earn a living while doing so
E) bring new products and services to market by creating and seizing opportunities
Answer:
Which of the following is an example of an industry-level factor as opposed to a
firm-level factor?
A) a firm’s assets
B) a firm’s culture
C) the teamwork among a firm’s employees
D) a firm’s products
E) threat of substitutes
Answer: