Entrepreneurship: Successfully Launching New Ventures, 5e, Global Edition
(Barringer/Ireland)
Chapter 2 Recognizing Opportunities and Generating Ideas
1) iCracked, the company profiled in the opening feature of Chapter 2, was started by AJ
Forsythe and Anthony Martin, two California college students. Through personal experiences,
the two discovered that an opportunity existed to start a company that would ________.
A) repair computer printers inexpensively and conveniently
B) repair used automobiles inexpensively and conveniently
C) repair broken items (e.g., furniture and appliances) in college dorm rooms and apartments
inexpensively and conveniently
D) repair laptop computers inexpensively and conveniently
E) repair iPhones inexpensively and conveniently
2) A(n) ________ is a favorable set of circumstances that creates a need for a new product,
service, or business.
A) idea
B) scheme
C) design
D) proposal
E) opportunity
3) According to the textbook, opportunities are ________.
A) easy to spot
B) easy to spot in fast growing industries, but tough to spot in slow growing industries
C) easy to spot in the manufacturing sector, but tough to spot in the service sector
D) tough to spot
E) neither easy nor tough to spot
4) An opportunity has the following four essential qualities ________.
A) attractive; timely; durable; and anchored in a product, service, or business that creates or adds
value for its buyer or end user
B) practical; opportune; appropriate; and anchored in a product, service, or business that is
efficient and effective
C) realistic; striking; timely; and anchored in a product, service, or business that is timely
D) attention-getting; attractive; timely; and anchored in a product, service, or business that
creates or adds value for its buyer or end user
E) attractive, durable, resilient, and opportune
5) Brad Johnson is starting an upscale men’s clothing store in a mall near Seattle. He wants to
open his store during the time period in which a business like his can realistically enter the new
market. Brad is trying to open his business while the ________ is open.
A) safe harbor
B) window of opportunity
C) portal of entry
D) doorway of opportunity
E) safety zone
6) The term “window of opportunity,” as discussed in Chapter 2, is a metaphor that describes the
time period in which a firm can ________.
A) obtain funding or financing
B) hire new employees
C) complete a financial analysis
D) realistically enter a new market
E) write a business plan
7) Which of the following is correct regarding opportunities and ideas?
A) An opportunity and an idea are essentially the same thing.
B) An idea almost always meets the criteria of an opportunity.
C) An opportunity is a thought, an impression, or a notion.
D) An idea is a favorable set of circumstances that creates a need for a new product, service, or
business.
E) It’s important to discern whether a particular idea meets the criteria for an opportunity.
8) A(n) ________ is a favorable set of circumstances that creates the need for a new product,
service, or business. A(n) ________ is a thought, an impression or a notion.
A) scheme, notion
B) opportunity, idea
C) idea, design
D) idea, opportunity
E) notion, scheme
9) Jessica Smith is thinking about starting a chain of fitness centers for young adults ages 18-30.
Which of the following is not an appropriate criterion for Jessica to test her idea against?
A) Determine whether the “window of opportunity” is open.
B) Determine whether a fitness center for young adults ages 18-30 meets the threshold of being a
good idea.
C) Determine the extent to which the notion takes advantage of an environmental trend, solves a
problem, or fills a gap in the marketplace.
D) Determine whether opening a fitness center for young adults ages 18-30 is timely.
E) Determine whether opening a fitness center for young adults ages 18-30 is a concept that
creates value for its buyer or end user.
10) An idea is a favorable set of circumstances that creates a need for a new product, service, or
business.
11) 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.
12) The term “window of opportunity” is a metaphor describing the time period in which a firm
can realistically raise money.
13) An idea is a thought, impression, or notion. It may or may not meet the criteria of an
opportunity.
14) Describe the difference between an idea and an opportunity. Why is the distinction
important?
15) 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
16) GasBuddy and GasPriceWatch.com are companies started to help consumers save money on
gas. Which environmental trend is most likely to have provided the impetus for the creation of
these companies?
A) Regulatory changes
B) Political changes
C) Economic forces
D) Technological advances
E) Social forces
17) Economic forces impact the opportunities available to entrepreneurs. Which of the following
alternatives reflects a set of economic forces that would be of interest to entrepreneurs?
A) Level of disposable income, new uses of old technologies, and new laws and regulations
B) New technologies, consumer spending patterns, and new laws
C) Interest rates, consumer spending patterns, and level of disposable income
D) Social and cultural trends, level of interest rates, and what people think is “in”
E) New changes in political areas, new laws, and level of disposable income
18) 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
19) 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
20) 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
21) Hulu.com allows people to watch television shows and movies on the Internet. Hulu.com’s
business opportunity was made possible by ________ that enhanced the ability of television
shows and movies to be uploaded to the Internet and played by anyone with a suitable computer
and an Internet connection.
A) social forces
B) technological advances
C) legal changes
D) regulatory changes
E) economic forces
22) If a new firm was launched to help businesses comply with The Affordable Care Act, that
opportunity was created by ________.
A) changes in economic forces
B) demographic changes
C) changes in social forces
D) changes in technological forces
E) political actions and regulatory changes
23) SafetyWeb is a Web-based service that helps parents protect their children’s online
reputation, privacy, and safety. Which of the following approaches to identifying an opportunity
was most likely the impetus for SafetyWeb?
A) Observing trends
B) Studying government reports
C) Finding gaps in the marketplace
D) Talking to consumers
E) Solving a problem
24) The Savvy Entrepreneurial Firm feature in Chapter 2 focuses on a technique through which
entrepreneurs can learn about emerging trends. The technique focused on in the chapter is
________.
A) online databases
B) newspapers and magazines
C) targeted Internet searches
D) social media
E) radio and television
25) Casey Griggs is a very capable computer engineer. Recently, he noticed a problem that
computer engineers have, and thought of a solution to the problem that might represent an
opportunity for a new software product. Casey’s idea for a new software product is an example of
a(n) ________ discovery.
A) chance
B) serendipitous
C) traditional
D) conventional
E) opportune
26) Clothing boutiques and specialty shops often start because there is a need for a particular
product, but large retailers like Wal-Mart and Costco can’t sell enough of the item to stock it on
their shelves. If a clothing boutique started to sell designer clothes or clothing for hard-to-fit
people because the clothing wasn’t being offered by a larger retailer, the best way to describe
how that idea was recognized is ________.
A) finding a gap in the marketplace
B) brainstorming
C) observing trends
D) solving a problem
E) talking to consumers
27) In 2000, Tish Cirovolo realized that there were no guitars on the market made specifically
for women. As a result, she started Daisy Rock Guitars, a company that makes guitars just for
women. Daisy Rock Guitars are stylish and come in feminine colors, and incorporate design
features that accommodate a woman’s smaller hand and build. The best way to describe how
Cirovolo’s business idea was recognized is ________.
A) brainstorming
B) talking to consumers
C) reading industry reports
D) observing trends
E) finding a gap in the marketplace
28) A common way that gaps in the marketplace are recognized is ________.
A) by observing changing environmental trends
B) by recognizing problems that need to be solved
C) via studying industry reports
D) when people become frustrated because they can’t find a product or service that they need and
recognize that other people feel the same way
E) via combined focus groups and brainstorming sessions
29) The three ways to identify an opportunity include observing trends, solving a problem, and
finding gaps in the marketplace.
30) Economic factors, social factors, technological advances, and political action and regulatory
changes are the most important trends to follow in trying to identify opportunities.
31) Many new businesses are successful by taking advantage of fads.
32) 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.
33) Describe the three separate ways that entrepreneurs identify new business, product, and
service opportunities?
34) The What Wrong feature in Chapter 2 focuses on Everpix, a company that enabled users to
organize and store photos online in an innovative manner. Regrettably, Everpix failed.
According to the feature, Everpix’s failure resulted from that fact that it’s founders ________.
A) spent too much time and energy perfecting their service at the expense of building a business
B) spent too much time and energy raising money at the expense of perfecting their service
C) spent too much time networking at the expense of building a business
D) spent too much time marketing their product at the expense of perfecting their service
E) spent too much time analyzing their market at the expense of networking
35) 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.
36) The ability to notice things without engaging in deliberate search is referred to as ________.
A) cognitive alertness
B) cognitive awareness
C) managerial alertness
D) entrepreneurial alertness
E) individual awareness
37) Kelly Pryor, who has launched several successful entrepreneurial firms, seems to have a
“sixth sense” that allows him to see opportunities that others miss. Kelly’s ability is referred to as
_________.
A) individual awareness
B) cognitive alertness
C) entrepreneurial alertness
D) individual readiness
E) cognitive readiness