The three ways to identify an opportunity include:
A) observing trends, solving a problem, and finding gaps in the marketplace
B) studying industry trade journals, talking to consumers, and solving a problem
C) observing trends, conducting brainstorming sessions, and studying industry trade
journals
D) observing trends, talking to consumers, and finding gaps in the marketplace
E) reading books, solving a problem, and findings gaps in the marketplace
Answer:
The FDD contains ________ categories of information.
A) 5
B) 15
C) 23
D) 33
E) 41
Answer:
Which of the following statements is incorrect regarding the personal characteristics of
entrepreneurs?
A) Some people think that entrepreneurs have a ‘sixth sense” that allows them to see
opportunities that others miss.
B) The extent and depth of an individual’s social network affects opportunity
recognition.
C) Several studies show that prior experience in an industry actually blinds an
entrepreneur to the recognition of new opportunities in the same industry.
D) Creativity is the process of generating novel or useful ideas.
E) The corridor principle states that once an entrepreneur starts a firm, he or she begins
a journey down a path where “corridors” leading to new venture opportunities become
apparent.
Answer:
A prototype is:
A) a form of opportunity recognition
B) a tool for evaluating the industry a new firm plans to enter
C) a financial model
D) the first physical depiction of a new product
E) a tool for evaluating the organizational prowess of a new firm
Answer:
________ is the process of determining whether a business idea is viable.
A) Feasibility analysis
B) Opportunity recognition
C) Viability analysis
D) Achievability analysis
E) Scenario analysis
Answer:
In which form of business ownership are the owners called “members”?
A) general partnership
B) limited partnership
C) limited liability company
D) subchapter C corporation
E) C corporation
Answer:
According to the textbook, which is the proper sequence of events in developing
successful business ideas?
A) opportunity recognition, feasibility analysis, development of a business plan
B) feasibility analysis, opportunity recognition, development of a business plan
C) development of a business plan, opportunity recognition, feasibility analysis
D) feasibility analysis, development of a business plan, opportunity recognition
E) development of a business plan, feasibility analysis, opportunity recognition
Answer:
Pacific Printing LLC is a startup that is working on a new technology for the printing
industry. Because the technology it’s working on is highly proprietary, the company is
located in the warehouse district of a large western city. Pacific’s founder, Jan Sims,
rarely gives interviews, and is careful to not divulge much about what the company is
doing. Which of the following common myths about entrepreneurs does the behavior of
its founder, Jan Sims, dispel?
A) Entrepreneurs are born, not made.
B) Entrepreneurs are gamblers.
C) Entrepreneurs are motivated primarily by money.
D) Entrepreneurs should be young and energetic.
E) Entrepreneurs love the spotlight.
Answer:
Amy has just launched a firm in the sports drink industry. She has decided to complete
a grid to see how she stacks up against her competitors. Along the horizontal axis of the
grid, she lists her firm along with her major competitors. Along the vertical axis of the
grid, she lists the main competitive factors in her industry. Amy is completing a:
A) strategic analysis spreadsheet
B) tactical analysis framework
C) competitive analysis grid
D) strategic analysis grid
E) behavioral analysis spreadsheet
Answer:
Which of the following is the correct sequence of events in regard to the process of
selecting a target market and position strategy?
A) creating a unique positioning strategy, selecting a target market, segmenting the
market
B) segmenting the market, creating a unique positioning strategy, selecting a target
market
C) segmenting the market, selecting a target market, creating a unique positioning
strategy
D) selecting a target market, creating a unique positioning strategy, segmenting the
market
E) creating a unique positioning strategy, segmenting the market, selecting a target
market
Answer:
Element Bars, the company profiled in the opening feature for Chapter 5, has a unique
position in its industry. It has positioned itself as:
A) a generic energy bar company that resells energy bars to companies who want to
create their own branded energy bars
B) a niche energy bar company that sells in high-end outlets, like 5 star hotels and spas
C) a premium energy bar company that only uses the most wholesome and healthy
ingredients, and makes special bars for vegetarians and vegans
D) a low-cost energy bar company that makes energy bars more accessible to people in
all income brackets and still offers healthy ingredients
E) a customizable energy bar company that sells to individuals online and also to
companies who want to create their own branded energy bars
Answer:
According to a survey conducted by the National Small Business Association between
August 2008 and December 2009, between ________ percent of business owners
utilized vendor credit.
A) 12 and 18
B) 17 and 21
C) 22 and 29
D) 35 and 40
E) 52 and 58
Answer:
Terry Wells owns a growing company that makes innovative kitchen appliances. One
thing that Terry has to continually work at is to keep enough cash on hand to make sure
she has sufficient liquidity to meet her payroll and cover her other short-term
obligations. The day-to-day challenge of firm growth this example is referring to is:
A) quality control
B) capital constraints
C) price stability
D) cash flow management
E) personnel issues
Answer:
Martin Nelson is thinking about launching a small business consulting company. To get
advice on how to proceed, he stopped by his local Small Business Administration
(SBA) office. The SBA advisor told Martin that one of the first things he needs to do is
to sit down and write a 25 to 35 page narrative that describes what his new business
plans to accomplish and how it plans to accomplish it. The SBA advisor is telling
Martin to write a(n):
A) tactical plan
B) marketing plan
C) operations plan
D) business plan
E) feasibility analysis
Answer:
Paul Kite owns a chain of ice cream stores in New England. To draw attention to his
stores, he adopted a very colorful and distinctive logo several years ago, which depicts
a funny-looking cow churning ice cream. Recently, a dairy company asked Paul if it
could use a characterization of his funny-looking cow on a line of yogurt it is coming
out with, and offered to pay Paul’s company 3 cents for every carton of yogurt it sells
that has the cow’s image on the carton. If Paul accepts this proposal, he will need to
enter into a(n) ________ agreement with the dairy.
A) licensing
B) joint venture
C) strategic alliance
D) new product development
E) exporting
Answer:
Which of the following is the main purpose for writing a business plan?
A) The plan helps the company develop a “road map” to follow.
B) The plan introduces potential investors and other stakeholders to the business
opportunity.
C) Both A and B are equally important.
D) Neither A nor B captures the true purpose of a business plan.
E) Reason A is the most important for experienced entrepreneurs and reason B is the
most important for inexperienced entrepreneurs.
Answer:
An increased focus on health and wellness has resulted in a number of new business
ideas including healthier foods and beverages, yoga instruction and training centers, and
nutrition consulting. An increased focus on health and wellness is an important
________ that is creating opportunities in many areas for entrepreneurial firms.
A) economic force
B) regulatory force
C) legal force
D) technological advances
E) social force
Answer:
Stroome, the focus on the opening feature for Chapter 6, has developed a new
Web-based service for editing and remixing video. Stroome’s initial business model is
based on making money in the following two ways:
A) subscription fees and licensing its software to film producers
B) a “freemium” pricing model and white labeling its site
C) online advertising and affiliate fees
D) white labeling its site and subscription fees
E) Google AdSense and affiliate fees
Answer:
Historically, commercial banks:
A) have been a good source of funds for startup firms
B) have not funded startup firms at all
C) have been a good source of funds for manufacturing firm startups but not for service
firm startups
D) have been a good source of funds for service firm startups but not for manufacturing
firm startups
E) have not been a good source of funds for startup firms
Answer:
Which of the following is not one of the components of a firm’s business model?
A) core strategy
B) strategic resources
C) partnership network
D) business plan
E) customer interface
Answer:
Apple Inc. is a firm that is proactive, innovative and risk-taking. From this description,
we can most accurately conclude that Apple has a high level of:
A) enterprise focus
B) innovative intensity
C) entrepreneurial intensity
D) creative intensity
E) innovative concentration
Answer:
Valarie owns a company that makes specialized components for the auto industry. Her
most important customer is a company that is growing at a rate of 25% per year. Valarie
is working hard to grow her firm, because she knows that unless her company
continually grows it will not be able to keep pace with the growth of its most important
customer. This examples illustrates the reason for growth referred to as:
A) capturing economies of scope
B) executing a scalable business model
C) market leadership
D) influence, power, and survivability
E) need to accommodate the growth of key customer
Answer:
Steven Tanner is in the process of putting together the business model for his startup
and is currently working on his mission statement, product/market scope, and basis for
differentiation. Steven is working on the ________ component of his business model.
A) core strategy
B) strategic resources
C) partnership network
D) customer interface
E) feasibility analysis
Answer:
As new products that are better than the existing generation of products are introduced,
sales normally increase because the new products provide consumers increased value or
worth. This process, which is called ________, stimulates economic activity, which is a
good thing for the economy.
A) creative destruction
B) repetitive destruction
C) iterative replacement
D) inventive replacement
E) iterative destruction
Answer:
Klymit, the company profiled in the opening feature in Chapter 8, makes cold weather
apparel products and related accessories. According to the feature, one of the prominent
challenges Klymit has faced is:
A) cash flow management
B) constructing realistic pro forma financial statements
C) defining its core strategy
D) hiring qualified personnel
E) finding reliable partners
Answer:
Which of Porter’s five forces is most directly influenced by the following factors:
number and balance of competitors, degree of difference between products, growth rate
of an industry, and level of fixed costs?
A) threat of new entrants
B) rivalry among existing firms
C) threat of substitutes
D) bargaining power of buyers
E) bargaining power of suppliers
Answer:
The document that does the best job of introducing potential investors and other
stakeholders with the business opportunity the firm is pursuing and how it plans to
pursue it is the:
A) business plan
B) feasibility analysis
C) opportunity analysis
D) industry analysis
E) marketing plan
Answer:
________ is work that is done for a company by people other than the company’s
full-time employees.
A) Ability enhancement
B) Productivity subcontracting
C) Capacity enhancement
D) Outsourcing
E) Insourcing
Answer:
________ are itemized forecasts of a company’s income, expenses, and capital needs
and are also an important tool for financial planning and control.
A) Profitability statements
B) Financial statements
C) Owners’ equity statements
D) Budgets
E) Statements of cash flows
Answer:
James Williams is the Chief Operating Officer of a startup in the health food industry.
He is also a member of his firm’s board of directors. In board of directors terminology,
James is a(n):
A) inside director
B) outside director
C) expert director
D) junior director
E) senior director
Answer:
Shelly James recently launched a firm in the fruit drink industry, and has already
exported her fruit drinks to 9 different countries. One thing that Shelly’s firm is doing is
that it is varying the tastes of the fruit drinks it sells on a country by country basis to
meet the demands of the local markets. Shelly’s firm is pursuing a ________ strategy.
A) global
B) home
C) universal
D) contemporary
E) multidomestic
Answer:
Ted Donovan owns a store that sells all-terrain vehicles (ATVs). In the past Ted just
sold one version of each of the ATVs he sold in his showroom, but to increase sales,
Ted now sells a low-end, a medium-priced, and a high-end version of each of the ATVs
he sells. Ted’s new strategy is called a(n):
A) improving an existing product or service strategy
B) market penetration strategy
C) product line extension strategy
D) geographic expansion strategy
E) joint venture strategy
Answer:
________ involves all the activities required to manufacture a product.
A) Resource procurement
B) Administration
C) Operations
D) Outbound logistics
E) Inbound logistics
Answer: