Patents, trademarks, copyrights, and licenses are the four key forms of intellectual
property.
Answer:
An idea bank is a physical or digital repository for storing ideas.
Answer:
Most boards of advisers have between 3 and 5 members.
Answer:
A trademark is a form of intellectual property protection that grants to the owner of a
work of authorship the legal right to determine how the work is used and to obtain the
economic benefits from the work.
Answer:
The major difference between a general and a limited partnership is that a limited
partnership includes two classes of owners-general and limited partners.
Answer:
The proper sequence in selecting a target market and positioning strategy is (1) craft a
unique positioning strategy, (2) select a target market, and (3) segment the market.
Answer:
An industry is a group of firms producing a similar product or service, such as tires, life
insurance, or smartphone apps.
Answer:
The pro forma balance sheet 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.
Answer:
The number one reason that people become entrepreneurs is to pursue financial
rewards.
Answer:
A new venture team is the group of founders, key employees, and advisers that either
manage or help manage a new business in its startup years.
Answer:
Internally generated growth is often called organic growth because it does not rely on
outside intervention.
Answer:
Very few businesses require licenses and permits to operate.
Answer:
A firm’s pace of growth is the rate at which it is growing compared to its main
competitors.
Answer:
Budgets are itemized forecasts of a company’s income, expenses, and capital needs and
are also an important tool for financial planning and control.
Answer:
Aging of the population, the increasing diversity of the workplace, and the continual
migration of people from small towns and rural areas to cities are important economic
trends.
Answer:
Corporations are organized as either C corporations, T corporations, or subchapter S
corporations.
Answer:
Several studies have shown that prior experience in an industry helps entrepreneurs
recognize business opportunities.
Answer:
Social plugins are tools that Web sites can use to provide users with personalized social
experiences.
Answer:
Quirky is a Web site that allows you to submit product ideas to a community that vets
and provides feedback on the ideas.
Answer:
A firm’s profit margin, or return on sales, is computed by dividing net income by net
sales.
Answer:
In most industries, the major determinant of industry profitability is the level of
competition among the firms already competing in the industry.
Answer:
Many new businesses are successful by taking advantage of fads.
Answer:
According to the consensus of the research, some people are genetically predisposed to
be entrepreneurs.
Answer:
The fact that a corporation has a board of directors precludes it from having a board of
advisors.
Answer:
A lease is a written agreement in which the owner of a piece of property allows an
individual or business to use the property for a specified period of time in exchange for
payments.
Answer:
A noncompete agreement prevents an individual from competing against a former
employer for a specific period of time.
Answer:
Firms that pursue a multidomestic strategy use the same basic approach in all foreign
markets.
Answer:
The vast majority of corporations in the United States are public corporations.
Answer:
The limited liability corporation is a form of business organization that is rapidly losing
popularity in the United States.
Answer:
The two trends that are most important to focus on in an industry analysis are business
trends and environmental trends.
Answer:
A firm’s ________ is a plan for how it competes, uses its resources, structures its
relationships, interfaces with customers, and creates value to sustain itself on the basis
of the value it creates.
A) business plan
B) business model
C) tactical model
D) strategic plan
E) operations model
Answer:
The What Went Wrong feature in Chapter 13 focuses on Wesabe, a Web-based company
that was launched in 2006 to help people manage their personal finances. According to
Marc Hedlund, one of Wesabe’s cofounders, the company failed for two primary
reasons. First, it didn’t allow a partner to provide it with an essential service that it
decided to build on its own. Second, it ________.
A) didn’t hire an experienced CEO
B) didn’t achieve a large enough critical mass of users
C) didn’t implement a revenue model fast enough
D) didn’t utilize both internal and external growth strategies
E) misunderstood its users
Answer:
Once a venture capitalist makes an investment in a firm, subsequent investments are
made in rounds and are referred to as ________.
A) later funding
B) successive funding
C) subsequent backing
D) follow-on funding
E) ensuing backing
Answer:
Some industries, like the athletic shoe industry, are dominated by a small number of
firms with strong brands. These industries are difficult to break into without spending
heavily on advertising. The barrier to entry that the firms in these types of industries
have erected is referred to as ________.
A) government and legal barriers
B) capital requirements
C) product differentiation
D) cost advantages independent of size
E) access to distribution channels
Answer:
Katherine Ford is thinking about starting a computer company. After doing some
research, she has decided that the computer industry can be divided into the following
product categories handheld computers, laptops, tablet computers, PCs, work stations,
minicomputers, mainframes and super computers. She is now trying to decide which
product category she is the most interested in competing in. The process that Katherine
is going through is called market ________.
A) splitting
B) subdividing
C) segmentation
D) dividing
E) separating
Answer:
Kevin Jackson owns a general contracting company. The way Kevin prices his services
is to figure his cost and then add a 33 percent markup. The method that Kevin uses to
determine his prices is called ________-based pricing.
A) economic
B) value
C) competitive
D) cost
E) conformity
Answer:
Once a firm decides to enter an industry and chooses a market in which to compete, it
must gain an understanding of its competitive environment. This challenge can be
undertaken by completing a(n) ________ analysis.
A) business
B) industry
C) competitor
D) strategic
E) market
Answer:
Shelly Watters owns a chain of fashion boutiques that started in Washington, DC and
has expanded into Maryland, Virginia, and West Virginia. Shelly is growing her
company via a strategy of ________.
A) geographic expansion
B) market penetration
C) product line extension
D) outsourcing
E) licensing
Answer:
In the context of strategic alliances, ________ alliances typically match a company with
a distribution system with a company that has a product to sell to increase sales of a
product or service.
A) promotion
B) marketing
C) organizational
D) directional
E) technological
Answer:
Terry Washington recently started a new firm in the financial services industry. Prior to
starting his firm, he spent considerable time doing research on the potential of the
industry. The research that Terry was doing is called ________ analysis.
A) industry
B) sector
C) commercial
D) business
E) target market
Answer:
Karen West owns a barbecue restaurant. One expense that Karen watches closely is the
cost of propane, which she uses to heat her ovens. The more barbecue food Karen sells,
the more it costs her for propane on a monthly basis. For Karen, the cost of propane is
a(n) ________ cost.
A) variable
B) secondary
C) resultant
D) fixed
E) irregular
Answer:
Which of the following symbols is the copyright bug?
A) ç
B) €
C) ¢
D) ©
E) ™
Answer:
A firm’s ________ reflects the results of its operations over a specified period and
shows whether it is making a profit or is experiencing a loss.
A) statement of cash flows
B) income statement
C) forecast
D) balance sheet
E) operating budget
Answer:
The Savvy Entrepreneurial Firm feature in Chapter 4 focuses on the ways in which
Quirky creates, delivers and captures value for its stakeholders. According to the
feature, Quirky would be a business that would be difficult to copy. According to the
feature, it would be difficult to copy because ________.
A) it has raised over $91 million and has over 550,000 people in its network
B) it has a highly-functional Web site and has a talented management team
C) it has a savvy marketing plan and has over 550,000 people in its network
D) it has raised over $91 million and has a talented management team
E) it has an excellent Internet domain name and has a first-mover advantage
Answer:
The Partnering for Success feature in Chapter 14 is titled “Three Steps to Alliance
Success.” The three steps to alliance success identified in the feature are ________.
A) drafting a licensing agreement, setting up a governance structure, and making it
work
B) selecting a partner, cutting the deal, and making it work
C) interviewing potential partners, cutting the deal, and supervising the implementation
of the agreement
D) drafting a licensing agreement, cutting the deal, and setting up a governance
structure
E) selecting an alliance “manager,” setting up a governance structure, and making it
work
Answer:
The majority of businesses go through a discernable set of stages of growth referred to
as the ________.
A) business rotation cycle
B) business existence cycle
C) organizational sequence
D) business life cycle
E) organizational life cycle
Answer:
The two primary audiences for a business plan are ________ and ________.
A) a firm’s employees; officials with the SEC
B) a firm’s customers; its competitors
C) investors; other external stakeholders and public relations firms
D) officials with the SEC; public relations firms
E) a firm’s employees and investors; other external stakeholders
Answer:
Which of the following statements is correct regarding entrepreneurial activity and age
ranges?
A) The highest percentage of entrepreneurs falls in the 18 to 29 age range.
B) The highest percentage of entrepreneurs falls in the 30 to 39 age range.
C) The highest percentage of entrepreneurs falls in the 40 to 49 age range.
D) The highest percentage of entrepreneurs falls in the 50 to 59 age range.
E) The highest percentage of entrepreneurs falls in the 60+ age range.
Answer:
According to the textbook, although a board of directors has formal governance
responsibilities, its most useful role is to ________.
A) provide guidance and support to the firm’s managers
B) submit papers on behalf of the firm to the SEC
C) represent the firm in public relations activities
D) conduct the firm’s annual meeting
E) provide funding to the firm
Answer:
Cynthia Jones recently surveyed 200 of her classmates to get a sense of the demand for
a new software product she is working on. Collecting data via a survey you administer
yourself is referred to as ________ research.
A) direct
B) derivative
C) primary
D) secondary
E) initial
Answer:
Which of the following statements is incorrect regarding common stock?
A) Common stock is issued more narrowly than preferred stock.
B) The common stockholders have voting rights.
C) The common stockholders get paid after the creditors in the event of the liquidation
of the corporation.
D) Common stock is the form of stock that most shareholders of a corporation own.
E) The common stockholders elect the board of directors.
Answer:
A(n) ________ business plan, which is intended to be a blueprint for a company’s
operations, is 40-100 pages long and is meant primarily for an internal audience.
A) operational
B) full
C) deliberate
D) summary
E) tactical
Answer:
In the five-stage creative process, the stage in which the creative idea is put into final
form is referred to as the ________ stage.
A) insight
B) preparation
C) incubation
D) elaboration
E) evaluation
Answer:
According to the textbook, the first rule in making an oral presentation is to ________.
A) follow instructions
B) be creative
C) emphasize all the positive aspects of a business venture
D) appear confident
E) do something out of the ordinary
Answer:
For startup firms, some products are under development for years before they generate
earnings. The upfront costs often exceed a firm’s ability to fund these activities on its
own. Which of the following reasons that motivate firms to seek funding or financing is
illustrated in this example?
A) Cash flow challenges
B) Marketing costs
C) Capital investments
D) Personnel costs
E) Lengthy product development cycles
Answer:
In regard to business models, which of the following statements is incorrect?
A) There is a standard business model that most firms follow.
B) A firm’s business model is inherently dependent on the collection of resources it
controls and the capabilities it possesses.
C) It is dangerous for a company to assume that it can be successful by simply copying
the business model of another firm.
D) A firm’s business model is its plan or diagram for how it competes.
E) It is often difficult to determine what another firm’s business model is.
Answer:
Cash plus items that are readily convertible to cash, such as accounts receivable,
marketable securities, and inventories are classified as ________ assets on a firm’s
balance sheet.
A) other
B) intermediate term
C) temporary
D) current
E) fixed
Answer:
Which of the following statements is incorrect regarding the industry analysis portion
of a firm’s business plan?
A) It is important to focus simultaneously on a business’s industry and its target market.
B) Industry structure refers to how concentrated or fragmented an industry is.
C) Most industries have 6 to 10 key success factors that should be reported in the
industry analysis.
D) Industry trends, which include both environmental and business trends, should be
discussed.
E) The industry analysis should conclude with a brief statement of your beliefs
regarding the long-term prospects for the industry.
Answer:
Sarah Parks is in the very early stages of putting together a business startup, and is
thinking about writing a business plan to request funds to conduct a feasibility analysis
and write a more complete business plan. What type of business plan should Sarah
write at this point?
A) Full business plan
B) Tactical business plan
C) Summary business plan
D) Operational business plan
E) Strategic business plan
Answer:
A disadvantage of C corporations is that they are subject to ________, which means
that a corporation is taxed on its net income and when the same income is distributed to
shareholders in the form of dividends it is taxed again on shareholders’ personal income
tax returns.
A) double taxation
B) dual toll
C) double duty
D) double assessment
E) dual harm
Answer:
Briefly describe the purpose of the First Screen and how it’s used.
Answer:
Describe the concept of guerrilla marketing. Why is guerrilla marketing particularly
suitable for entrepreneurial firms?
Answer:
What is meant by the term “piercing the corporate veil”? How can the corporate veil be
pierced?
Answer:
What is an elevator speech? How did it get its name?
Answer:
What is a business angel? Describe the prototypical business angel. How much money
do business angels typically invest in a single company?
Answer:
Identify and briefly describe the three types of patents.
Answer:
What is gumshoe research and why is it important?
Answer:
What is intellectual property? Why is it called “intellectual” property? Why is
intellectual property such an important issue for entrepreneurial firms?
Answer:
Describe the Barringer/Ireland Business Model Template and discuss its purpose.
Answer:
Describe the purpose of feasibility analysis. When should a feasibility analysis be
conducted relative to opportunity recognition and the development of a business plan?
Answer:
What is ratio analysis? Why is it important?
Answer:
What is the purpose of market segmentation? How are markets typically segmented?
Can a company segment its market on more than one dimension?
Answer:
What is a skills profile and what is it used for?
Answer:
What is competitive intelligence? What are some of the ways that a firm can ethically
obtain information about its competitors?
Answer:
Describe the purpose of the income statement, the balance sheet, and the statement of
cash flows.
Answer:
Describe what a product line extension strategy is. What are the advantages of this
strategy? Describe a company you are familiar with that utilizes a product line
extension growth strategy.
Answer: