MGT 757 Foreign licensing is when a

subject Type Homework Help
subject Pages 11
subject Words 2864
subject Authors Jeffrey R. Cornwall, Norman M. Scarborough

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Foreign licensing is when a business buys and sells products in many countries, either
in its own name, or as an agent for its buyer-seller clients.
Adding innovative products and services is important to a companies' success and small
entrepreneurial companies may be able to respond faster than larger organizations.
An important way to prevent online credit card fraud is to ask customers not only for
their card number and expiration date, but also for the three-digit number above the
signature panel on the back of the credit card - the card verification value.
One advantage of installment loans for a small business is that the business owner
retains a security interest in the item sold as collateral on the loan.
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Entrepreneurs can use the Web to generate sales leads by researching customers and
market characteristics in other countries.
If a limited partner withdraws, sells his ownership in the partnership, or dies, the
partnership is not forced into dissolution.
The small business with a high debt-to-net worth ratio has more borrowing capacity
than a firm with a low ratio.
Because they lack the size and financial resources of their larger competitors, small
companies are powerless when it comes to developing effective marketing strategies.
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Creativity and innovation are the signature of large, entrepreneurial businesses.
Although e-commerce can lower many costs of doing business, it still requires
________.
A) a professional Web designer's input
B) a basic infrastructure in the distribution channel to process orders, maintain
inventory, fill orders, and handle customer service
C) a brick-and-mortar store presence
D) None of the above
Approximately ________ percent of corporate managers who are "cast off" as
companies downsize become entrepreneurs.
A) 5
B) 15
C) 20
D) 45
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In a general partnership, ________.
A) each partner is held responsible for an agreement/decision made by any one of the
partners
B) partners can be held responsible only for decisions they make personally
C) no partner can be held legally responsible for decisions since the partnership itself is
a legal entity
D) no decision is binding unless all partners agree to it in writing
To launch a successful Web site, business owners should consider ________.
A) a simple design that is easy to navigate
B) that to stand out on the Web, the site really has to sparkle
C) all the "bells" and "whistles" technology can provide
D) that flash makes a Web site better
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A sweep account is a checking account that ________.
A) bears interest, allowing depositors to write checks without tying up money for a
specific period of time
B) never has funds as they are drawn from a master account
C) automatically moves all funds in a company's checking account above a
predetermined minimum into an interest-bearing account
D) need to be reviewed and updated on a regular basis
The process of determining whether an entrepreneur's idea is a viable foundation for
creating a successful business is known as a ________.
A) business plan
B) strategic analysis
C) industry analysis
D) feasibility analysis
The primary purpose of the five forces matrix is to ________.
A) assign values to each of the five elements
B) provide a graphic
C) list the five forces in rank order
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D) assess the five forces as compared to a standard value
The most common reasons for leaving a site without purchasing include which of the
following?
A) Shipping charges were too high.
B) Site did not look trustworthy.
C) Customers could not find the items they were looking for.
D) All of the above
More companies fail for the lack of ________ than for the lack of ________.
A) cash; profit
B) profit; cash
C) net revenue; gross revenue
D) vision; profit
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Products or services that may be sought as alternative solutions (e.g., purchasing tax
planning software rather than paying a CPA to assist with preparing your taxes) are
referred to as ________.
A) buyers products
B) rivalry products
C) substitute products
D) competitive alternatives
"Verification" refers to ________.
A) validating the idea as accurate and useful
B) possibly conducting experiments, running simulations, and test marketing a product
or service
C) possibly asking questions such as "will it work?" and "is it really a better solution?"
D) All of the above
Location, delivery services, effective use of easy-to-use technology and multiple
communication options are examples of ________.
A) convenience
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B) customer service
C) blogging
D) social media marketing
A bank loan that imposes restrictions or covenants on the business decisions an
entrepreneur makes concerning the company's operations is called a ________.
A) home equity loan
B) floor planning
C) term loan
D) line of credit
The largest single source of external equity capital for small businesses is ________.
A) angels
B) venture capitalists
C) Small Business Administration loans
D) the stock market (i.e., "going public")
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Explain why it is important to "go global." What benefits can companies that take the
plunge into global business expect?
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What is leadership? How does leadership differ from management?
List the 12 key ratios outlined in the text and explain the type of information they
provide the small business owner.
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Identify the benefits of selling on the Web.
If Harry's profit target is $15,000, what level of sales must be achieved?
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After years of being an entrepreneur, Wynn has come to you for help in establishing his
first Web site. He has expressed a desire to have a site with all the "bells and whistles"
he can get. What should your advice to him be? Which other factors should he consider
before launching an e-commerce site?
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Mini Case 1-1: Hudson's Dilemma
Bill Hudson was a real craftsman when it came to being a machinist. Bill had learned
almost all that he knew from Hugo Huffman, his first and only employer. Bill Hudson
was married and had three young children. He was 33 years old and had worked for
Hugo ever since he finished his tour in the Army. In 12 years, Bill had polished his
skills under the watchful and critical eye of Hugo Huffman. Hugo was quick to
recognize Bill's talent for the trade. Bill had a positive attitude about learning and
displayed a drive for perfection that Hugo admired.
Hugo's Machine Shop was a successful small business. Its success was based mostly on
the reputation for quality that had been established over its 42 years in operation. Hugo
had come to this country with his new wife, Hilda, when he was in his late twenties.
Now the business was a success, but Hugo remembered the early years when he and
Hilda had to struggle. Hugo wanted the business to continue to produce the highest
quality craftsman products possible. On a Friday evening, he called Bill into his office
at closing time, poured him a cup of half-day-old coffee, and began to talk with him
about the future.
"Bill, Hilda and I are getting old and I want to retire. It has been 42 years of fun but
these old hands need a rest. In short, Hilda and I would like you to buy the business. We
both feel that your heart is in this craft and that you would always retain the quality that
we have stood for." Bill was taken back by the offer. He, of course, knew Hugo was
getting older, but had no idea Hugo would retire. Bill and his wife, Anna, had only
$4,200 in the bank. Most of Bill's salary went for the normal costs of rearing three
children. Hugo knew Bill did not have the money to buy the business in cash, but he
was willing to take a portion of the profits for the next 15 years and a modest initial
investment from Bill.
Bill had, for the past four years, made most of the technical decisions in the shop. Bill
knew the customers and was well respected by the employees. He had never been
involved in the business side of the operation. He was a high school graduate but had
never taken business courses. Bill was told by Hugo that even after deducting the
percentage of the profits he would owe under the sales agreement, he would be able to
almost double his annual earnings. Bill would have to take on all the business functions
himself because Anna had no business training either.
What steps should Bill take to avoid the pitfalls common to a small business?
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List five ways entrepreneurs can stimulate their own creativity and encourage it among
workers.
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Explain what ratio analysis is. Name the four categories of ratios and describe the type
of information each group provides the small business owner.

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