Q&A Hero

Q: There is no need to find out more information about a prospective franchise as the franchisor should be the primary source of information. a. True b. False

Q: An accounting firm that provides tax services for a company would be considered to be part of that company's supply chain.

Q: Franchising offers both a proven line of business and reduced risk. a. True b. False

Q: One drawback of becoming a franchisor relates to possible new restrictions as a requirement for contract renewal. a. True b. False

Q: Competition in the 21st century is no longer between companies; it is between supply chains.

Q: Financial statements can mislead a potential purchaser trying to develop an accurate business valuation. a. True b. False

Q: Marketing, production/operations, and ________ are the three functions that all organizations must perform to create goods and services.

Q: One of the benefits of a franchise agreement for the franchisee is that the franchisor is solely responsible for advert​ising the franchise. a. True b. False

Q: Which of the following tasks within an airline company are related to operations? A) crew scheduling B) international monetary exchange C) sales D) advertising E) accounts payable

Q: The practice of putting one franchise right next to another is referred to as piggyback franchising. a. True b. False

Q: The marketing function's main concern is with: A) producing goods or providing services. B) procuring materials, supplies, and equipment. C) building and maintaining a positive image. D) generating the demand for the organization's products or services. E) securing monetary resources.

Q: Which of the following would NOT be an operations function in a commercial bank? A) auditing B) teller scheduling C) maintenance D) collection E) check clearing

Q: As of 2008, the Federal Trade Commissions Franchise Rule prescribes that franchisors must disclose to prospective franchisees information such as bankruptcies, business experience of the principals, and litigation in which the firm is involved. a. True b. False

Q: Conducting a thorough due diligence should always be accomplished if purchasing an existing corporation or franchise, but is unnecessary if acquiring a sole proprietorship. a. True b. False

Q: Which of the following pioneers was NOT making a professional impact during the Scientific Management Era? A) Frank Gilbreth B) W. Edwards Deming C) Henry L. Gantt D) Lillian Gilbreth E) Frederick W. Taylor

Q: A wise buyer will also evaluate the legal commitments of an existing business. a. True b. False

Q: Which of the following are the primary functions of all organizations? A) production/operations, marketing, and human resources B) marketing, human resources, and finance/accounting C) sales, quality control, and production/operations D) marketing, production/operations, and finance/accounting E) research and development, finance/accounting, and purchasing

Q: A nondisclosure agreement signed by a prospective buyer shows the seller that the buyer intends to purchase the business. a. True b. False

Q: Define operations management. Will your definition accommodate both manufacturing and service operations?

Q: The unscrupulous actions by franchisors to void contracts of franchisees in order to sell the franchise to someone else and collect an additional fee is called chewing. a. True b. False

Q: Identify three or more operations-related tasks carried out by Hard Rock Caf.

Q: One of the advantages of buying a franchise is that the purchaser has access to a proven business system. a. True b. False

Q: The processing of a loan application can be completed more quickly if the franchising organization is registered with the U.S. Small Business Administration. a. True b. False

Q: ________ is the set of activities that creates value in the form of goods and services by transforming inputs into outputs.

Q: Operations management is applicable: A) mostly to the service sector. B) to services exclusively. C) mostly to the manufacturing sector. D) to all firms, whether manufacturing or service. E) to the manufacturing sector exclusively.

Q: Which statement is an example of a global trend? a. The Federal Reserve announces that it will decrease the interest rate it charges banks. b. Congress passes legislation that increases the tax rates on corporations. c. A new computer chip is announced that will allow for miniaturization of many electronic devices. d. The E.U. declares an increase in tariffs on all agricultural goods.

Q: An operations task performed at Hard Rock Caf is: A) borrowing funds to build a new restaurant. B) advertising changes in the restaurant menu. C) calculating restaurant profit and loss. D) preparing employee schedules. E) all of the above.

Q: According to a study by the National Federation of Independent Business, the most common source of new product ideas for small business startups is a. prior work experience. b. personal interests and hobbies. c. a chance happening. d. existing records of a business.

Q: At Hard Rock Caf, tasks that reflect operations or operations management include: A) designing efficient layouts. B) providing meals. C) receiving ingredients. D) preparing effective employee schedules. E) all of the above.

Q: Angela noticed an interest among her friends and colleagues in wearing high-end watches and other jewelry for special occasions, so she started a company where customers could rent high-end jewelry. Angela is a. considering ways to adapt a product or service to meet customer needs in a different way. b. offering products through a subscription service. c. cashing in on the sharing economy. d. imagining how a market for a product could be creatively expanded.

Q: An example of a "hidden" production function is the transfer of funds between accounts at a bank.

Q: An inside-out analysis is one that: a. considers the general environment and industry setting. b. catalogs the startups sources of potential strengths. c. considers the strengths of buyers and suppliers. d. catalogs the possible responses of rivals in the industry.

Q: Operations management is the set of activities that creates value in the form of goods and services by transforming inputs into outputs.

Q: Which factor determines the nature and degree of competition in an industry, as identified by Michael Porter in his book Competitive Advantage? a. The interest of small businesses b. Bargaining power of competitors c. Threat of substitute products or services d. The macroeconomic level of the industry

Q: All organizations, including service firms such as banks and hospitals, have a production function.

Q: Containers Etc. manufactures household containers. In contrast to traditional market designs, all of the products are microwaveable, child-proof and come in an assortment of 35 colors. Accordingly, Containers Etc. is pursuing a _____ strategy. a. product-based b. differentiation-based c. concept-based d. efficiency-based

Q: Because Hard Rock Cafs are themed restaurants, operations managers focus their layout design efforts on attractiveness while paying little attention to efficiency.

Q: Peggy would like to open a dog grooming business in her home. Which of the following, if true, would indicate this is a good idea? a. More households now own dogs but the owners dont want to give them regular baths. b. Fewer households now own dogs but the owners dont want to give them regular baths. c. Fewer households now own dogs but the owners give them regular baths. d. More households own dogs but the owners give them regular baths.

Q: Drs. James and Janet Baker saw that many people experienced difficulty and frustration when typing, some because of physical disabilities. So they invented a voice recognition software to allow users to talk to the computer. Their ideas have become Dragon Naturally Speaking, a popular talk-to-type software application. Which of these statements describes their startup? a. Borrow heavility from existing products or services. b. Combine two businesses to create a market opening. c. Begin with a problem in mind or a pain you can relieve. d. Recognize a hot trend and ride the wave.

Q: Some of the operations-related activities of Hard Rock Caf include designing meals and analyzing them for ingredient cost and labor requirements.

Q: Based on William A. Sahlman's suggestions, which question about competitors should be answered by the business plan? a. Are there ways to co-opt potential or actual competitors by forming alliances? b. How easily can new competitors enter the industry? c. Do small businesses have special advantages when competing in the industry? d. What is the average size of competitors?

Q: Katarina has founded three different businesses in the past eight years, all of which have become so successful she has sold them at large profits. We can say Katarina is good at: a. innovative ideas. b. entrepreneurial alertness. c. new market ideas. d. opportunity recognition.

Q: The quote Good artists borrow; great artists steal is the principle that launched which company? a. Aimies Dinner and Movie b. Apple c. C and D Landscape Company d. Xerox

Q: Mark is the owner of Delectable Delights, a specialty store offering chocolates, candies, and fruit baskets. After a recent analysis of the competitive environment, Mark concluded that three distinct consumer segments exist for his products - A, B, and C consumers. In an effort to maximize the effectiveness of its strategy, Mark has decided to limit his efforts to fulfilling the needs of A consumers. He is employing a _____ strategy. a. multisegmentation b. selective c. focus d. concentration

Q: For the past several years the borrowing interest rates has been very low in the United States. This is an example of a(n) ______________ trend. a. economic b. sociocultural c. political/legal d. demographic

Q: Isabella listens whenever someone says Someone ought to make a ... She expects one of these ideas to develop into a profitable business. Isabella possesses: a. market awareness. b. entrepreneurial alertness. c. opportunity recognition. d. innovative thinking.

Q: Richard could see the demand for towable recreational vehicles declining so beginning in the early 1970s he used his equipment, employees, and professional network to design and build utility trucks, a more recession-resistant industry. This is an example of: a. serendipity. b. diversification. c. innovative thinking d. market ideas.

Q: Kitty-Kat Korner fabric shop caters to the quilters in the region. Other fabric shops carry fabrics for all types of clothing along with floral, yarn, and other craft supplies. Kitty-Kat carries only items related to quilting. Which of the following best describes Kitty-Kats strategy? a. focus b. cost-based c. quality d. innovation

Q: Marketplace Farms is a regional cooperative of apple and orange growers. In order to compete against larger regional growers, the company relies on inexpensive packaging processes and lower cost labor instead of machines. Marketplace Farms is relying on what type of strategy? a. price-based b. marketing-based c. efficiency-based d. cost-based

Q: A(n) _____ exists when multiple resources are integrated and then deployed to the firm's advantage. a. networked resource b. common intangible c. capability d. industry edge

Q: The increased trade between the United States and Mexico since the enactment of the North American Free Trade Agreement is related to the ____ element of the general environment. a. technological b. global c. ecological d. sociocultural

Q: When Sally realized her vintage clothing pieces were being bought by the local college students and not just their parents, she started adding more vintage pieces to her inventory. Sally is a. recognizing a hot trend and riding the wave. b. combining two businesses into one to create a market opening. c. beginning with a problem in mind. d. considering ways to adapt a product or service to meet customer needs in a different way.

Q: Janis wants to open a restaurant. She is not interested in a franchise; she wants to build her business literally from the ground up. When she does, her business will be classified as a: a. entrepreneurial opportunity. b. startup. c. new market idea. d. serendipity.

Q: As the success of the athletic teams at O-MY-U skyrocketed, so did attendance at the games. Out-of-town visitors found all the hotels fully booked. So Bob and Shirley opened their home to guests on weekends, operating as a bed-and-breakfast. Soon many of their neighbors did the same and Bob and Shirley found they could no longer fill all their rooms every game weekend. How would Michael Porter explain this? a. The focus strategy was imitated. b. Demand disappeared. c. The target segment lost its uniqueness. d. The industry became further segmented.

Q: Which statement is an example of a technological trend? a. The Federal Reserve announces that it will decrease the interest rate it charges banks. b. Congress passes legislation that increases the tax rates on corporations. c. A new computer chip is announced which will allow for miniaturization of many electronic devices. d. The E.U. announces an increase in tariffs on all agricultural goods.

Q: Morris built a thriving business by selling tailor-made clothing at off-the-rack prices. All other custom-clothing stores charge much higher prices. We can say that Morris has a(n) a. core competency. b. competitive advantage. c. serendipity. d. opportunity alertness.

Q: An example of an idea for a new startup from a hobby is a. a coin collector, who bought and sold coins for years to build a personal collection, deciding to become a coin dealer. b. a furniture salesperson seeing the possibility of opening a new furniture store in a different area of the city. c. a sharpshooter, who shot holes in a pair of her boyfriend's jeans during an argument, hearing him get complimented on the way they look. d. all of the above are examples.

Q: Using a focus strategy, a company would focus its attention on producing one product that satisfied the greatest number of customers. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

Q: Using a cost-based strategy, a company would take steps to increase efficiency and hold down costs. a. True b. False

Q: It is nearly impossible to make a business out of a hobby. a. True b. False

Q: By observing trends in the use of leisure time, technology, or other areas, an entrepreneur can discover potential business ideas. a. True b. False

Q: Many businesses are formed because an entrepreneur saw ways to improve or modify a product as a result of previous work experience. a. True b. False

Q: Serendipity describes a new product idea resulting from deliberate search activities. a. True b. False

Q: An inside-out analysis identifies a companys strengths and the competitions weaknesses. a. True b. False

Q: During a feasibility analysis, an entrepreneur may discover a fatal flaw in the idea. a. True b. False

Q: The general environment includes rival companies and products. a. True b. False

Q: When screening new business ideas, the entrepreneur need not focus on the size of the targeted market. a. True b. False

Q: An increase in the bargaining power of suppliers a. increases both the attractiveness and the profitability of the target market. b. decreases both the attractiveness and the profitability of the target market. c. decreases the attractiveness and increases the profitability of the target market. d. increases the attractiveness and decreases the profitability of the target market.

Q: The diamond market is monopolized by the DeBeers organization, from mining to cutting and polishing to wholesaling. Jewelers can do little to negotiate prices. This situation typifies: a. low barriers to entry. b. availability of substitutes. c. intense rivalry. d. strong suppliers.

Q: Many commuters grab a cup of coffee and drink it during their ride to work. So someone invented specially shaped cups that dont tip and lids with sip openings that close and dont spill. Which of these innovative ways of thinking best fits this situation? a. Combine two businesses to create a market opening. b. Study a product or service to see if you can make it green. c. Recognize a hot trend and ride the wave. d. Study an existing product and explore ways to improve its function.

Q: An evaluation of the general environment a. is done before the feasibility analysis. b. helps identify a trend that could be used for a possible startup idea. c. will clarify the unique value of the startup idea. d. will be the primary determinant for a possible startup idea.

Q: Laura discovered to her amazement that the skin oil she sold seemed to repel mosquitos. She relabeled the product and began selling it as alternative to brands such as Cutter and Off!. Lauras startup is which kind? a. New market idea b. New technology idea c. New benefit idea d. New product idea

Q: Consuela noticed significant growth in the Hispanic population in her mid-size town. The local grocery carried mostly traditional American products. She knew her neighbors would want familiar foods so she decided to open a food market catering to their preferences. Which kind of startup will her store be? a. New market idea b. New technology idea c. New benefit idea d. New product idea

Q: A focus strategy is best described as a. an attempt to compete directly with industry giants. b. a domestic marketing strategy. c. a strategy that isolates the firm from market forces. d. targeting the high end of a market.

Q: Wilma needed wine glasses but all she had were candlestick holders and 8-ounce canning jars. Gluing the two together, she created what she called mountain crystal which became a big hit. The local crafters association asked her to make enough for them to sell, and her business took off. This is an example of building a business from: a. work experience. b. hobbies. c. personal interest. d. accidental discovery.

Q: A SWOT analysis can be described best as a. a means of assessing the firm's industry situation. b. an assessment of the internal strengths and weaknesses of the firm. c. a dynamic analysis of the firm's current situation. d. a concise overview of the firm's strategic situation.

Q: A company that is the lowest-cost producer within the market will have what type of strategy? a. price-based b. marketing-based c. efficiency-based d. cost-based

Q: Select one of the ways of innovative thinking, explain it, and give an example of a business idea this type of thinking might generate.

Q: Intangible resources include: a. a good location, cash, and capable business partners. b. a good reputation, a respected brand name, and an extensive personal network. c. intellectual property rights, equipment, and technology. d. capable business partners, intellectual property rights, and equipment.

Q: Identify and discuss the five factors entrepreneurs should consider when screening new business ideas.