List the three basic types of acquisitions and identify the purpose of each.
The primary factor in determining the location for a sawmill would probably be
proximity to the market.
The ability to pay insurance premiums is all that is needed to obtain insurance.
Internal control is a system of checks and balances that safeguards a firm’s assets and
enhances the accuracy and reliability of financial statements.
What are the major elements of the formal marketing plan and what is the purpose of
each of these elements?
The times interest earned ratio is often used to determine one dimension of a firm’s
profitability.
You Make the CallSituation 3
Dr. Juldiz Afgazar, a native of the Republic of Kazakhstan, had been invited to spend a
semester in the United States as a visiting scholar in entrepreneurial finance.
Kazakhstan gained its independence from the former Soviet Union in 1991, and only
after that were laws passed allowing citizens to own private businesses. Dr. Afgazar
wanted to learn more about the free market economy of the United States to determine
whether such a system could be implemented in Kazakhstan.
Prior to this visit to the United States, Dr. Afgazar had not traveled extensively outside
her country. Although she enjoyed many aspects of U.S. culture, she was particularly
impressed by the seemingly unlimited quantity and variety of goods and foods that were
readily available. After a visit to a local restaurant’s pizza buffet, she became an avid
fan of American-style pizza! Dr. Afgazar found the crisp yeast crust, spicy tomato
sauce, melted mozzarella cheese, and assortment of toppings to be a delicious
combination. Pizza was an entirely new type of food for her, since it was not available
in Kazakhstan. A true entrepreneur, Dr. Afgazar began to wonder if a pizza restaurant
could be successful in her country.
Source: Developed by Elisabeth J. Teal of Northern Georgia College and State
University, Dahlonega, Georgia, and Aigul N. Toxanova of Kokshetau Higher College
of Management and Business, Kazakhstan.
Question 1 What obstacles would an entrepreneur have to overcome to establish a pizza
restaurant in a country with a developing market-based economy, such as Kazakhstan?
Question 2 Is Dr. Afgazar’s idea of developing a pizza restaurant in Kazakhstan ahead
of its time? That is, do you think the economy of Kazakhstan is sufficiently developed
to support a pizza restaurant?
Question 3 What methods could an entrepreneur use to evaluate the likelihood of
success of a pizza restaurant in Kazakhstan?
You Make the CallSituation 3
Jay Sorenson of Portland, Oregon, created a product called the Java Jacket, which is a
patented honeycombed insulating sleeve that slides over a paper cup containing a hot
beverage to make it comfortable to hold. Having introduced the new product to the
market, Sorenson has already cut deals with coffeehouses, specialty stores, and
convenience stores nationwide. He started the business with $15,000 in 1993, but his
2003 sales were projected to be between $12 and 15 million. Sorenson is now in a
position where he would like to continue expanding his business, but he is concerned
that large and established competitors could introduce their own variations of the same
product.
Source: Don Debelak, “Send in the Clones,” Entrepreneur, September 2003, pp.
128″132.
Question 1 Will the market for Sorenson’s product continue to grow in the years ahead?
Question 2 If he is successful, what sources of competition should he expect?
Question 3 What steps would you recommend that he take to protect his company from
the onslaught of competition that is likely to come?
The promotional mix is influenced by three major factors: the geographical nature of
the market to be reached, customer income, and the target market.
Net profit is the difference between cash inflows and outflows.
Explain the nature and role of quality circles.
Define the terms franchising, franchisor, and franchisee.
An important source of credit information is the customer’s previous credit history.
What are the four questions financial ratio analysis should answer?
A job description refers to a listing of the knowledge, skills, abilities, and other
characteristics necessary to perform a job.