In a link joint venture, the partners collaborate at a single point in the value chain to
gain economies of scale in production or distribution.
Answer:
A niche market is a place within a market segment that represents a narrow group of
customers with similar interests.
Answer:
In a business format franchise, the franchisor provides a formula for doing business to
the franchisee along with training, advertising, and other forms of assistance.
Answer:
The best industry to enter is an industry where the threat of each of Porter’s five forces
is high.
Answer:
Approximately 50 percent of the 9,000 banks in the United States participate in the
SBA Guaranteed Loan Program.
Answer:
Technology licensing is the licensing of proprietary technology that the licensor
typically controls by virtue of a utility patent.
Answer:
A fragmented industry is a new industry in which standard operating procedures have
yet to be developed.
Answer:
The statement of cash flows summarizes the changes in a firm’s cash position for a
specified period of time and details why the change occurred.
Answer:
Disruptive business models are impactful enough that they disrupt or change the way
business is conducted in an industry or an important niche within an industry.
Answer:
Growth usually increases rather than decreases the challenges involved with cash flow
management.
Answer:
The Franchise Disclosure Document contains a total of 23 categories of information
that give a prospective franchisee a broad base of information about the background and
financial health of the franchisor.
Answer:
The operations section of the Barringer/Ireland Business Model Template includes three
sections: product (or service) production, channels, and key partners.
Answer:
A feasibility analysis is an assessment of a potential product or service idea rather than
a potential business.
Answer:
The main challenges for a business in the introduction stage are to make sure the initial
product or service is right and to start laying the groundwork for building a larger
organization.
Answer:
Small businesses outperform their larger counterparts in terms of patent activity
(issuance).
Answer:
A business’s mission or mission statement describes why it exists and what its business
model is supposed to accomplish.
Answer:
A disadvantage of a sole proprietorship is that it is subject to double taxation.
Answer:
Price is the only element in the marketing mix that represents a costall other elements
produce revenue.
Answer:
Design patents are the most common type of patent and cover what we generally think
of as new inventions.
Answer:
“Brand premium” is the term that denotes the set of assets and liabilities that are linked
to a brand and enable it to raise a firm’s valuation.
Answer:
It is important for an entrepreneur to select an attorney as late as possible when
developing a business venture.
Answer:
Sometimes firms are compelled to grow to accommodate the growth of a key customer.
Answer:
A company’s industry analysis and target market analysis are usually included in the
same section of its business plan.
Answer:
Brainstorming sessions are designed to move slowly, so ideas can be presented and
evaluated.
Answer:
A referent account is an early user of a firm’s product who is willing to give a
testimonial regarding his or her experience with the product.
Answer:
A joint venture is a partnership between two or more firms that is developed to achieve
a specific goal and has no joint ownership involved.
Answer:
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:
Pictorial, graphic, and sculptural works can be protected via copyrights.
Answer:
The pro forma financial statements are the heart of the operations section of a business
plan.
Answer:
The majority of businesses go through a discernable set of stages referred to as the
business/industry life cycle.
Answer:
Copyright infringement occurs when one work derives from another or is an exact copy.
Answer:
The majority of entrepreneurial firms first enter foreign markets as exporters.
Answer:
When competing the basis for differentiation portion of the Barringer/Ireland Business
Model template, it is important to emphasize as many points of differentiation as
possible.
Answer:
Fixed costs are the costs a company incurs as it generates sales.
Answer:
Franchising is a form of business organization in which a firm that already has a
successful product or service licenses its trademark and method of doing business to
other businesses in exchange for an initial franchise fee and an ongoing royalty.
Answer:
The two primary areas to consider in organizational feasibility analysis are management
prowess and resource sufficiency.
Answer:
Mediation is the process in which an impartial third party helps those involved in a
dispute reach an agreement.
Answer:
Stock options are a special form of incentive compensation.
Answer:
Economies of scale occur when ________.
A) increasing production lowers the average cost of each unit produced
B) increasing production increases the average cost of each unit produced
C) decreasing production lowers the average cost of each unit produced
D) decreasing production increases the average cost of each unit
E) increasing production increases the fixed cost of doing business
Answer:
According to the textbook, from the franchisor’s point of view, the primary
disadvantage of franchising is that ________.
A) it is a poorly understood form of business ownership
B) an organization allows others to profit from its trademark and business method
C) franchise organizations consistently make less money than alternative forms of
business ownership
D) it typically takes longer to grow an organization via franchising than
company-owned stores
E) it is not legal in seven states and the District of Columbia
Answer:
Kickstarter and Indiegogo are examples of ________ crowdfunding sites.
A) equity-based
B) vendor-based
C) peer-based
D) debt-based
E) reward-based
Answer:
Most of Sarah’s ideas come from interacting with coworkers, friends, her spouse, her
parents, and other people that share the same beliefs that she does. Sarah is getting most
of her ideas through ________ relationships.
A) weak-tie
B) horizontal-tie
C) strong-tie
D) multiple-tie
E) vertical-tie
Answer:
A ________ is any formula, pattern, physical device, idea, process, or other information
that provides the owner of the information with a competitive advantage in the
marketplace.
A) patent
B) copyright
C) trademark
D) trade secret
E) certification mark
Answer:
The Partnering for Success feature in Chapter 15 focuses on how franchise
organizations can boost their sales while at the same time reduce their expenses. The
technique that the feature recommends to achieve these dual objectives is ________.
A) strategic alliances
B) joint ventures
C) outsourcing
D) licensing
E) co-branding
Answer:
Foundersuite, Quirky and Unassumer are Web sites that provide access to ________.
A) feedback on business ideas
B) landing pages
C) surveys
D) prototyping services
E) market research
Answer:
Which of the following is not an appropriate reason for firm growth?
A) Increasing the compensation of the top managers of the firm
B) Ability to attract and retain talented employees
C) Need to accommodate the growth of key customers
D) Market leadership
E) Economies of scale
Answer:
Which of the following was identified in the textbook as an advantage of participating
in strategic alliances and joint ventures?
A) Management complexities
B) Loss of organizational flexibility
C) Partners’ cultures may clash.
D) Risk becoming dependent on a partner
E) Learning
Answer:
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:
________ patents are the most common type of patent and cover what we generally
think of as new inventions.
A) Value
B) Product
C) Method
D) Utility
E) Design
Answer:
Savanna Combs opened a clothing boutique two years ago. Unfortunately, the boutique
failed after 18 months. Savanna attributes the failure of her boutique to the facts that her
employees couldn’t adjust quickly enough to their new roles and that her boutique
lacked a “track record” with outside buyers and sellers, which made it difficult to form
partnerships and make sales. Savanna suffered from what research calls the ________.
A) burden of novelty
B) millstone of innovation
C) liability of newness
D) liability of preparedness
E) burden of newness
Answer:
Which of the following was not identified as one of the four main financial objectives
of a firm?
A) Stability
B) Efficiency
C) Timeliness
D) Liquidity
E) Profitability
Answer:
A(n) ________ channel is a route a product takes from the place it is made to the
customer who is the end user.
A) trade
B) product
C) allotment
D) promotion
E) distribution
Answer:
Match the financial term with its proper definition.
A) Forecasts depict relationships between items on a firm’s financial statements
B) Forecasts written reports that quantitatively describe a firm’s financial health
C) Budget itemized forecasts of a company’s income, expenses, and capital needs
D) Financial ratios written report that quantitatively describes a firm’s financial health
E) Financial statements an estimate of a firm’s future income and expenses
Answer:
The ________ Program is a competitive grant program that provides over $2.5 billion
per year to small businesses for early-state and development projects.
A) SBTA
B) SBIR
C) SBAP
D) SAIR
E) SBTR
Answer:
Brian Ramsey owns a firm that develops and sells smartphone accessories. He is
currently trying to grow his firm through strategic alliances and joint ventures. Brian is
pursuing a(n) ________ growth strategy.
A) domestic
B) external
C) subsidiary
D) internal
E) secondary
Answer:
Which of the following statements is not true regarding the attributes of the founder(s)
of a firm?
A) Evidence suggests that important entrepreneurial skills are enhanced through higher
education.
B) Founders with prior entrepreneurial experience are more likely to avoid costly
mistakes.
C) Founders with experience in the same industry as their new ventures will typically
have “blinders” on and are typically not as effective as founders new to the industry.
D) Founders with broad social and professional networks have an advantage.
E) New ventures that are started by a team rather than an individual have an advantage.
Answer:
A brief, carefully constructed statement that outlines the merits of a business
opportunity is called a(n) ________ speech.
A) subway
B) sway
C) bootstrap
D) teaser
E) elevator
Answer:
Every January thousands of electronic products manufacturers gather in Las Vegas to
display their products and to see what their competitors are up to. This type of event is
called a ________ show.
A) trade
B) promotions
C) deal
D) goods
E) skill
Answer:
Generally, industries are more attractive when the threat of substitutes is ________.
A) high
B) low
C) neutral (neither high or low)
D) high for manufacturing firms and low for service firms
E) high for service firms and low for manufacturing firms
Answer:
Mintel, IBISWorld, and Bizminer are databases most likely to be used during the
________ feasibility stage of the feasibility analysis process.
A) organizational
B) economic
C) political/legal
D) industry/target market
E) product/service
Answer:
Which of the following is not an advantage of buying a franchise?
A) A proven product or service within an established system
B) Franchisor ongoing support
C) Availability of financing
D) Potential for business growth
E) Duration and nature of the commitment
Answer:
A(n) ________ is a group of firms producing a similar product or service, such as soft
drinks, airlines, or smartphone apps.
A) cluster
B) division
C) sector
D) industry
E) network
Answer:
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:
Equity investors typically have a ________ year investment horizon.
A) 1 to 3
B) 2 to 4
C) 3 to 5
D) 4 to 6
E) 5 to 7
Answer:
A board of directors’ three formal responsibilities are to appoint the officers of the firm,
declare dividends, and ________.
A) write the firm’s strategic plan
B) conduct the annual meeting
C) provide funding for the firm
D) represent the firm in public relations activities
E) oversee the affairs of the corporation
Answer:
According to the textbook, Chipotle Mexican Grill in fast-casual restaurants and
1-800-GOT_JUNK? in junk removal are examples of entrepreneurial firms who are
exploiting opportunities in ________ industries.
A) global
B) declining
C) mature
D) emerging
E) fragmented
Answer:
________ means that as the number of employees a firm needs increases, it becomes
increasingly difficult for it to find the right employees, place them in appropriate
positions, and provide adequate supervision.
A) Moral hazard
B) Adverse selection
C) Adverse hazard
D) Complex hazard
E) Complex selection
Answer:
The high failure rate among new ventures is due, in part, to the liability of newness,
which refers to the fact that new companies often falter because ________.
A) they are underfunded and the founders of the firms don’t move quickly enough to put
together boards of directors and boards of advisors that can provide them direction and
advice
B) the founders of the firms underestimate the complexities involved with starting a
new business and the firms lack a “track record” with outside buyers and sellers
C) the people who start the firms can’t adjust quickly enough to their new roles and the
firms lack a “track record” with outside buyers and sellers
D) the people who start the firms can’t adjust quickly enough to their new roles and they
are underfunded
E) the founders of the firms underestimate the complexities involved with starting a
new business and they don’t move quickly enough to establish business partnerships
Answer:
A company’s customer list is most commonly protected under ________ regulations.
A) patent
B) copyright
C) trade secret
D) trademark
E) collective mark
Answer:
Steven Diaz just took a job with Harley Davidson. As part of his employment
agreement, Harley Davidson required Steven to sign an agreement, which states that if
he leaves Harley Davidson, he will not work for a firm that competes against Harley
Davidson for at least two years. The agreement that Steven signed is called a ________
agreement.
A) nondisclosure
B) nonparticipate
C) nonchallenge
D) noncompete
E) noncontend
Answer:
________ costs are costs that a company incurs whether it sells something or not.
A) Fixed
B) Consistent
C) Steady
D) Variable
E) Regular
Answer:
The SBIR is a ________-phase program, meaning that firms that qualify have the
potential to receive more than one grant to fund a particular proposal.
A) two
B) three
C) six
D) nine
E) twelve
Answer:
According to the textbook, the three numbers that receive the most attention when
evaluating an income statement are ________.
A) depreciation, interest income, and income tax expense
B) cost of sales, gross profit, and operating expenses
C) net sales, cost of sales, and operating expenses
D) gross profit, net sales, and incomes tax expense
E) gross profit, other income, and net income
Answer:
What are core competencies? Provide an example of the core competencies that are
utilized by an entrepreneurial firm.
Answer:
Describe the difference between strong-tie and weak-tie relationships. Is it more likely
that an entrepreneur will get new ideas through strong-tie or weak-tie relationships?
Answer:
What is a business plan?
Answer:
Describe the term “liability of newness” and suggest several ways that a new venture
can overcome this handicap.
Answer:
Identify the five competitive forces that determine industry profitably. Explain the
purpose of analyzing these forces?
Answer:
Why do most firms need funding? Provide a brief explanation of each reason.
Answer:
What are the primary day-to-day challenges involved with growing a firm? Briefly
describe each challenge.
Answer:
What is an exclusive distribution agreement? Why do firms enter into exclusive
distribution agreements with other firms?
Answer:
Describe each of the four primary financial objectives of firms.
Answer:
Describe the purpose of industry/target market feasibility analysis, and identify the two
primary issues that should be considered. What is the difference between a firm’s
industry and its target market?
Answer:
List and explain three of the common misconceptions about franchising.
Answer:
What is a copyright? What is protected by a copyright?
Answer:
Describe what a joint venture is. Identify the two types of joint ventures.
Answer:
How can a person tell if franchising is right for them?
Answer:
Describe how brainstorming can help facilitate the generation of ideas, and outline the
four rules for conducting a brainstorming session.
Answer: