The Euromonitor provides very industry specific information on companies in the
European Union.
The reason that many noncompete agreements, which help protect trade secrets, are
thrown out of court is that they are poorly structured and written.
The type of funds most frequently used by businesses is externally generated funds.
When hiring employees for the venture, the entrepreneur should consider the
candidate’s skills and abilities and avoid considering the individual’s personality.
The first step in conducting a competitive analysis is to document the pricing strategy
of each competitor.
Imitation of other products increases the downside loss associated with new entry.
The four Cs of credit are computers, capital, compromise, and collateral.
The cost of goods sold expense can be determined either by directly computing the
variable cost of producing a unit times the number of units sold or by using an industry
standard percentage of sales.
The Patent Cooperation Treaty, which has over 100 participants, was established to
facilitate patent filings in multiple countries in one office rather than filing in each
separate country.
Focus groups should be led by the entrepreneur.
Creative synthesis is closely connected to the technique of parameter analysis.
Brainwriting is a written form of brainstorming.
An online company’s front-end operations involve integration of customer orders with
distribution channels.
Using a spreadsheet software package is helpful when developing budgets as it helps to
gauge the impact of different financial scenarios.
Members of the distribution channel are usually good sources of ideas for new
products.
The management team and the venture’s company mission are examples of external
environmental factors.
The source of knowledge about the unmet demand for an energy bar (PowerBar) came
from extensive market research of athletes.
The pro forma balance sheet depicts the condition of the business at one point in time.
The best way to “increase the size of the pie” in negotiation is to use a conflict
resolution approach.
When a retail tire store buys a tire wholesaler this is an example of horizontal
integration.
The process of dividing the market into smaller homogeneous groups is called market
segmentation.
A narrow scope strategy offers a small product range to a small number of customer
groups.
Angel investors usually expect to play an active role in the businesses they invest in.
The depth and detail in the business plan depend on the size and scope of the proposed
new venture.
Only 60% of businesses have a succession plan in place.
The entrepreneur’s ability to recognize a business opportunity is a result of his or her
knowledge and experience.
Comprehension questions are designed to stimulate entrepreneurs to think about their
own understanding.
The future earnings capacity of the company is the most important factor in valuation.
Market development strategies involve selling the firm’s existing products to a new
group of customers, such as a new geographic market.
Any invention requiring FDA approval has the term of its patent extended by the
amount of time it takes the FDA to review the invention.
A common procedure for determining a merger’s value is to estimate the present value
of discounted cash flows and the expected after-tax earnings attributable to the merger.
Bootstrap financing helps avoid some of the problems of external capital like decreases
in flexibility and increased impulse to spend.
When preparing the industry analysis section of the business plan, using secondary
sources is not appropriate.
Profits and tax benefits are common motivations for going global.
The McMullen-Shepherd Model helps identify the common traits of successful
entrepreneurs.
The value-added chain is usually available only to large national firms.
Gifts related to business proceedings are illegal in most other countries and should not
be offered to foreign business partners.
Promotion using television is more expensive than promotion using the Internet and
direct mail.
Which of the following statements is(are) not true?
A.A trademark may be a word, slogan, symbol, design or particular sound.
B.Unlike a patent, trademark does not last indefinitely.
C.It is possible to file for a trademark if you intend to use this mark in the future.
D.There are four categories of trademarks.
Which of the following documents is not usually included in the Financial Plan?
A.Statement of cash flows
B.Income statement
C.Price lists from suppliers
D.Projected balance sheet
In the idea stage of the product planning and development process:
A.conversational interviewing is used.
B.product samples are given out.
C.systematic market evaluation is used.
D.multiple brand comparison is used.
A common reason why companies do not come out successfully from a Chapter 11
bankruptcy is because they ____.
A.are in denial
B.don’t have legal representation
C.wait too long to file for protection
D.do not understand the bankruptcy process
All of the following would be considering part of the description of the venture section
of the business plan except:
A.the business location.
B.the history of the business.
C.what equipment will be purchased.
D.the projected statement of cash flows for the first year.
Which of the following is the most significant advantage of an acquisition according to
the text?
A.Established image and track record
B.Location
C.Cost
D.Existing employees
In ____ the entrepreneur sells equipment to the lender then arranges for its continued
use.
A.a factoring arrangement
B.trust receipts
C.cash flow financing
D.a sale-leaseback arrangement
The initial registration for a trademark lasts:
A.10 years.
B.14 years.
C.17 years.
D.20 years.
The computerized system developed by the grocery and pharmaceutical industry to link
chain members is:
A.Efficient Computer Response (ECR)
B.Efficient Computer Distribution (ECD)
C.Electronic Demand Distribution (EDD)
D.Computerized Check Out Systems (CCOS)
The standard term of a limited liability company is:
A.15 years.
B.20 years.
C.25 years.
D.30 years.
In designing the organization:
A.the initial design is usually complicated.
B.poor design is a significant cause for business failure since the entrepreneur often
performs all organization functions themselves.
C.the entrepreneur easily transitions from a growing start-up to a growing, well
managed business.
D.as the workload increases the organizational structure will contract.
By being first to market a product, the venture:
A.can tends to lose customer loyalties to late entrants.
B.loses out to switching costs.
C.secures access to important sources of supply.
D.can sell its products and services at a higher price.
The _______ created the commission that prescribes safety standards for products.
A.Consumer Product Safety Act
B.Patent Cooperation Treaty
C.Sarbanes-Oxley Act
D.U.S. Labor Department
Interviewing or surveying is the most common approach used to gather primary market
data.
Probably the most well-known and widely used technique for creative problem solving
is:
A.brainstorming.
B.focus groups.
C.forced relationships.
D.scientific method.
Fixed expenses:
A.are incurred regardless of sales volume.
B.can be estimated by taking into consideration the production.
C.includes labor, raw materials, and commissions.
D.must be linked to strategy in the business plan.
The causal process of thinking:
A.starts with a desired outcome and focuses on the possible means to generate that
outcome.
B.starts with what one has and selects among possible outcomes.
C.involves bricolage.
D.starts with brainstorming by meeting with industry professionals.
The depth and detail of a business plan depend on:
A.the target audience.
B.the size and scope of the new venture.
C.the experience of the entrepreneur.
D.the amount of capital needed.
Which of the following is true?
A.Independent, venture-capital-based start-ups by entrepreneurs tend to outperform
corporate start-ups significantly.
B.New ventures started within a corporation performed better than those started
independently by entrepreneurs.
C.Independent entrepreneurs find difficulty in maintaining a long-term commitment.
D.Corporate ventures become profitable twice as fast as independent ventures.
All these are characteristics of an entrepreneurial environment except:
A.there are short term horizons.
B.new ideas are encouraged.
C.the organization operates on frontiers of technology.
D.it uses a multidiscipline teamwork approach.
The _____ budget is used to project cash flows for the cost of goods produced.
A.operating
B.production
C.capital
D.depreciation
Which among the following influences whether customers are able to use the good or
service properly and whether they are able to understand the firm’s advertising or other
promotional messages?
A.Political philosophy
B.Religion
C.Manners and customs
D.Education
What type of insurance is mandatory in some states?
A.Property
B.Bonding
C.Life
D.Workers’ Compensation
The __________ is the specific group of potential customers toward which a venture
aims its marketing plan.
A.target market
B.external environmental factor
C.channel of distribution
D.consumer market
Focus groups use which of the following methods?
A.A moderator leads the group in an open, in-depth discussion.
B.A moderator asks each individual in the group questions, interview style.
C.Each participant fills out a questionnaire, followed by individual exit interviews.
D.Each participant obtains new ideas and solutions by focusing on problems.
To assess the potential profitability of a venture, the entrepreneur needs to ascertain
expected sales and expense figures for the first:
A.month.
B.year.
C.quarter.
D.three years.
A narrow-scope market strategy:
A.does not provide the entrepreneur an opportunity to build up specialized knowledge
and expertise.
B.provides substantial protection against competitors.
C.is like putting all your eggs in one basket.
D.can be thought of as taking a “portfolio” approach to dealing with uncertainties.
Competitor analysis begins with:
A.gathering samples of the competitors product(s).
B.discovering each competitors advertising budget.
C.documenting the current strategy of each primary competitor.
D.identifying which competitors are most successful.
Involving employees in the decision-making process is:
A.a passive management style.
B.a participative management style.
C.an autocratic management style.
D.impossible for small businesses.
Which of the following interested parties should not have access to the venture’s
business plan?
A.Competitors
B.Lenders
C.Investors
D.Suppliers
Obtaining funds from private investors:
A.is inappropriate for new ventures.
B.is a public offering.
C.is covered by Regulation D.
D.involves a great deal of time and expense.