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
Answer:
Jason Andersen just finished writing a business plan for a new type of office supply
store. One thing Jason included in the “Management Team & Company Structure”
section of his business plan is a chart that depicts the most important skills that are
needed for his business and where skills gaps exist. Jason included a(n)________ in his
business plan.
A) skills profile
B) talent report
C) abilities profile
D) expertise report
E) talent summary
Answer:
Phil Atkinson recently entered into an agreement with Sonic to open seven Sonic
Fast-Food Restaurant franchises. According to the agreement that Phil entered into, he
has the right to open up to seven Sonic Fast-Food Restaurant franchises within the city
limits of Portland, Oregon. Phil has entered into a(n):
A) individual franchise agreement
B) area franchise agreement
C) locality franchise agreement
D) district franchise agreement
E) neighborhood franchise agreement
Answer:
According to the textbook, the businesses that have the potential to grow the fastest
over a sustained period of time are ones that:
A) solve a significant problem or have a major impact on their customers’ productivity
or lives
B) are cost leaders and promote themselves aggressively
C) have a major impact on their customers’ lives and sell high quality products
D) take advantage of environmental trends and are cost leaders
E) solve a significant problem or sell high quality products
Answer:
The Google program called ________ allows advertisers to buy keywords on the
Google Home Page.
A) AdSense
B) Adcenter
C) AdWords
D) Search Marketing
E) AdGoogle
Answer:
Which of the following statements is incorrect regarding the process of building a
company’s brand?
A) A firm’s name, logo, Web site design, and even its letterhead are part of its brand.
B) One of the keys to effective branding is to create a strong personality for a firm.
C) Some companies monitor the integrity of their brands through brand management.
D) Startups must build a brand from scratch, which starts with selecting the company’s
name.
E) Most experts recommend a heavy reliance on advertising in building a firm’s brand.
Answer:
A(n) ________ is a written document that describes all the aspects of a business venture
in a concise manner.
A) business plan
B) business model
C) operations plan
D) corporate plan
E) contingency plan
Answer:
Which of the following is not a source of equity funding?
A) initial public offering
B) angel investors
C) private placement
D) venture capital
E) government grants
Answer:
________ are projections for future periods based on forecasts and are typically
completed for two to three years into the future.
A) Chronological financial statements
B) Pro forma financial statements
C) Ad-hoc financial statements
D) Concurrent financial statements
E) Historical financial statements
Answer:
The Savvy Entrepreneurial Firm feature in Chapter 3 focuses on Bill Gross, and how a
company he was leading, Knowledge Adventure, made a 180-degree turn on the
positioning of a product. According to the feature, Gross and his team made the change
as a result of:
A) observing how customers acted when buying their product
B) studying industry trends
C) conducting Internet research
D) administering a concept test and a buying intention’s survey
E) hiring consultants to provide them advice
Answer:
A(n) ________ is a panel of experts who are asked by a firm’s managers to provide
counsel and advice on an ongoing basis.
A) consultation board
B) idea panel
C) counseling panel
D) advisory board
E) suggestion panel
Answer:
Lincoln & Lexi, the company profiled in the opening feature for Chapter 4, was
founded to:
A) sell consulting services to e-commerce sites
B) provide nannie and tutoring services
C) sell jewelry online
D) sell iPhone apps for casual gamers
E) sell children’s clothing through home parties and baby showers
Answer:
Consider the following questions: Are products under development that require patent
protection? Are we in compliance with the copyright license agreements into which we
have entered? Is anyone infringing on our trademarks? Are company trade secrets
leaking out to competitors? These are the types of questions that would be asked when
conducting a(n):
A) intangible material examination
B) intellectual property inventory
C) intangible material inspection
D) patent, trademark, copyright, and trade secret review
E) intellectual property audit
Answer:
Southwest Airlines uses its assets very productively. Its turnaround time, or the time
that its airplanes sit on the ground while they are being loaded and unloaded, is the
lowest in the airline industry. In terms of the primary financial objectives of a firm, this
attribute is a measure of Southwest’s:
A) efficiency
B) effectiveness
C) stability
D) liquidity
E) profitability
Answer:
Which of the following is an advantage of internal growth strategies?
A) encourages internal entrepreneurship
B) adds to industry capacity
C) need to develop new resources
D) investment in a failed internal effort can be difficult to recoup
E) slow form of growth
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 example of a social force?
A) changes in interest rates
B) emphasis on clean forms of energy including wind, solar, biofuels, and others
C) aging of baby boomers
D) increased diversity of the workforce
E) increasing number of people going back to school and/or retraining for new jobs
Answer:
Copyright law protects any work of authorship:
A) 90 days after it is approved by the U.S. Copyright Office
B) one year after it assumes a tangible form
C) the moment it assumes a tangible form
D) as soon as it is approved by the U.S. Copyright Office
E) 30 days after it assumes a tangible form
Answer:
The Partnering for Success feature in Chapter 1 focuses on how pharmaceutical
products are brought to market. The “lesson learned” from the feature for entrepreneurs
is:
A) large firms and smaller entrepreneurial firms can often produce the best results by
partnering with each other rather than acting as adversaries
B) it rarely works out for large firms and smaller entrepreneurial firms to partner with
each other, particularly in the pharmaceutical industry
C) the most compelling partnerships between smaller entrepreneurial firms and large
firms allow both categories of firms to be generalists, and not focus strictly on their
areas of expertise
D) partnerships between smaller entrepreneurial firms and large firms almost always
favor the smaller entrepreneurial firms, particularly in the pharmaceutical industry
E) partnerships between smaller entrepreneurial firms and large firms almost always
favor the large firm, particularly in the pharmaceutical industry
Answer:
Which of the following was not identified in the textbook as one of the five primary
reasons passion is important for the launch of a successful entrepreneurial organization?
A) the ability to stick to a plan even when faced with evidence that changes are needed
B) a willingness to work hard for an extended period of time
C) ability to overcome setbacks and “no’s”
D) the ability to listen to feedback on the limitations of your organization and yourself
E) perseverance and persistence when the going gets tough
Answer:
According to research in this area, it is more likely that an entrepreneur will get a new
business idea through a ________ relationship than the alternatives.
A) weak-tie
B) moderate-tie
C) vertical-tie
D) lateral-tie
E) strong-tie
Answer:
There are two primary audiences for a business plan:
A) a firm’s employees and officials with the SEC
B) a firm’s customers and its competitors
C) investors and other external stakeholders and public relations firms
D) officials with the SEC and public relations firms
E) a firm’s employees and investors and other external stakeholders
Answer:
Which of the following statements is incorrect regarding acquisitions?
A) In an acquisition, the surviving firm is called the acquirer.
B) An acquisition is the outright purchase of one firm by another.
C) In most cases, a firm acquires a competitor or a company that has a product line or
distinctive competency that it needs.
D) If a firm decides to grow through acquisitions, it is extremely important for it to
exercise extreme care in finding acquisition candidates.
E) Many firms have found that the process of assimilating another company into their
current operation was easier than they thought it would be.
Answer:
Every year 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:
A) trade show
B) promotions show
C) deal show
D) goods show
E) skill show
Answer:
The two most common strategies pursued by firms in global industries are the
________ strategy and the ________ strategy.
A) inclusive, multidomestic
B) multidomestic, global
C) multidomestic, worldwide
D) inclusive, global
E) home, worldwide
Answer:
According to the textbook, the three different types of competitors a business will face
are:
A) potential, direct, and upcoming
B) indirect, fleeting, and future
C) serious, cautious, and future
D) direct, indirect, and future
E) potential, fleeting, and indirect
Answer:
According to the textbook, the number one reason that people become entrepreneurs is
to:
A) realize financial rewards
B) gain prestige
C) be their own boss
D) continue a family tradition
E) pursue their own ideas
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:
Equity investors typically have a ________ investment horizon.
A) 1 to 3 year
B) 2 to 4 year
C) 3 to 5 year
D) 4 to 6 year
E) 5 to 7 year
Answer:
A firm’s ________ is the set of controllable, tactical marketing tools that it uses to
produce the response it wants in the target market.
A) tactical mix
B) promotional blend
C) organizational mix
D) marketing mix
E) selling mix
Answer:
Aquafina operates in the bottled water industry. The companies that offer identical or
similar products and go after the same customers that Aquafina does are Dasani and
Zephyrhills. Dasani and Zephyrhills are Aquafina’s:
A) direct competitors
B) indirect competitors
C) future competitors
D) impending competitors
E) potential competitors
Answer:
________ are costs that a company incurs whether it sells something or not. ________
are the costs a company incurs as it generates sales.
A) Preset costs, Marginal costs
B) Variable costs, Fixed costs
C) Set costs, Marginal costs
D) Fixed costs, Variable costs
E) Marginal costs, Set costs
Answer:
In a business model context, the three components of a firm’s partnership network are:
A) business mission, partners, and strategic assets
B) core competencies, suppliers, and target customer
C) suppliers, partners, and other key relationships
D) business mission, product/market scope, and basis for differentiation
E) pricing structure, fulfillment and support, and target customer
Answer:
Operating leverage is highest in companies that have:
A) a service rather than a manufacturing emphasis
B) virtually no fixed costs
C) equal variable costs and fixed costs
D) a high proportion of variable costs relative to their fixed costs
E) a high proportion of fixed costs relative to their variable costs
Answer:
Which of the following statements is incorrect regarding the “core strategy” component
of a firm’s business model?
A) A firm’s core strategy describes how it competes relative to its competitors.
B) The product a firm chooses has little impact on its core strategy and business model.
C) A company’s product/market scope defines the products and markets on which it will
compete.
D) From a broad perspective firms typically choose one of two generic strategies: cost
leadership or differentiation.
E) The generic strategy a firm chooses greatly affects its business model.
Answer: