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Q:
Alyson and Andrea, country artists, realized that their love of classic rock was also popular with their fans. Their change to their show to incorporate more rock songs with a country flavor is an example of
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. finding a way to adapt a product or service to meet customer needs in a different way.
Q:
Compare and contrast personal experience, hobbies and personal interests, and accidental discovery as a source of startup ideas. Use examples to strengthen the discussion.
Q:
The trend toward more customized consumer goods is what kind of trend?
a. Economic b. Sociocultural
c. Technological d. Demographic
Q:
List the five factors that determine the nature and degree of competition in an industry, as presented by Michael Porter in his book Competitive Advantage. Why is the proper identification of these factors important for a new venture?
Q:
Many direct sales organizations suggest that the new member begin selling the product part-time while continuing to work at his/her regular job. Which explanation best fits this recommendation?
a. The business meets a definite market need. b. The target market is sizable.
c. There are few competitors. d. The business can be tested cheaply and expanded incrementally.
Q:
Describe the differences and relationships between resources, capabilities and core competencies. How do these items relate to inside-out analysis?
Q:
Arlene runs Aquabuddies, a company that makes figurines for aquariums. What type of strategy would be expected?
a. a focus strategy.
b. an unsegmented strategy.
c. a multisegmentation strategy.
d. a marketing mix strategy.
Q:
Briefly state the difference between a market and an industry. How are these two items related to small business success?
Q:
Todays smartphones bear little resemblance to the original analog cell phones of the early 1990s. Their capabilities exceed those of the early desktop computers. It seems nearly every adult carries at least one cell phone. Which of the trends does this represent?
a. Sociocultural b. Demographic
c. Technological d. Global
Q:
What marketing activities suggest that a small firm is following a focus strategy?
Q:
One of the drawbacks of SWOT analysis is:
a. it is very time consuming. b. a professional consultant must perform it.
c. its focus on present conditions. d. it requires information about competitors not readily available to outsiders.
Q:
Name and describe the two broad-based strategy options that a firm can select when pursuing a competitive advantage in the marketplace.
Q:
Which statement is an example of a political/legal 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. declares an increase in tariffs on all agricultural goods.
Q:
The environment that focuses on the strength, position, and likely moves and countermoves of competitors in an industry
Q:
Jeff Bezos original business plan involved taking orders for books and having the items shipped directly from the publisher to the customer. He modified the plan to include other products such as toys and decided to buy the toys from the producers and ship them from his own warehouse. This modification of the original plan is called:
a. a change of plan b. a pivot.
c. a serendipity. d. a competitive move.
Q:
A plan of action designed to provide a product or service with unique attributes that are valued by consumers
Q:
Which segment is part of the general environment?
a. The industry segment
b. The global segment
c. The information segment
d. The human resources segment
Q:
A circumstance or development that alone could render a new business unsuccessful
Q:
Mike and Jane opened a franchise sporting goods store. Neither was athletic; neither had ever managed a retail store; and the business failed within one year. Which statement best explains these results?
a. The venture did not fit with their mission or aspirations. b. They had no connections with suppliers, customers, or investors.
c. They lacked factors critical to the success of the enterprise. d. They failed to complete a feasibility study.
Q:
A companys routines and processes that can coordinate the combined use of its productive assets in order to achieve desired outcomes
Q:
When Jeff Bezos launched Amazon.com, his idea of selling items he did not own from a website was unique. Which type of startup is this?
a. New market idea b. New technology idea
c. New benefit idea d. New product idea
Q:
A preliminary assessment of a business idea that gauges whether the venture envisioned is likely to succeed
Q:
Which statement is an example of an economic trend?
a. The Federal Reserve announces that it will decrease the interest rate charged to banks.
b. Congress passes legislation that increases the tax rate on corporations.
c. A new computer chip is announced which will allow for miniaturization of many electronic devices.
d. The E.U. declares an increase in tariffs on all agricultural goods.
Q:
Those capabilities that provide a firm with a competitive edge and reflect its personality
Q:
Kitty-Kat Korner fabric shop caters to the quilters in the region. Nowhere else can a quilter find everything she needs: fabrics, notions, pattern books, even quilting machines and quilting classes. This is not your typical fabric store by any means. Which of the following best describes Kitty-Kats strategy?
a. innovation b. differentiation
c. cost-based d. strategic alliances
Q:
Readiness to act on existing but unnoticed business opportunities
Q:
The State of Maryland has recently imposed a rain tax based on the amount of non-water-absorbing surfaces on real estate. Which type of trend does this represent?
a. Economic b. Sociocultural
c. Political/legal d. Technological
Q:
A benefit that exists when a firm has a product or service that is seen by its target market as better than those of competitors
Q:
Farmers wishing to sell grain cannot negotiate a price; they either accept the price offered or decline to sell their crop. This is an example of:
a. low barriers to entry. b. availability of substitutes.
c. intense rivalry. d. strong buyers.
Q:
The idea that an attractive market opportunity will draw competitors, diminishing its attractiveness
a. capabilities
b. competitive advantage
c. competitive environment
d. core competencies
e. cost-based strategy
f. differentiation strategy
g. entrepreneurial alertness
h. fatal flaw
i. feasibility analysis
Q:
Generally speaking, a strategy is
a. an action plan that guides resource investments.
b. a formal statement of what the firm intends to do.
c. an expanded description of the firm's mission statement.
d. most effective when it is designed to reflect the tactics that are common within an industry.
Q:
A facility for making desirable discoveries by accident
Q:
Careful analysis of the competitive environment can result in:
a. failure of a new business. b. unexpected response from a rival.
c. loss of the startups supplier base. d. greater financial success of the startup.
Q:
An assessment that provides a concise overview of a firms strategic situation
Q:
TV commercials promote reverse mortgages. Other ads promote medications for high blood pressure, ED, immune system disorders, and high cholesterol. Which type of trend do these represent?
a. Sociocultural b. Global
c. Technological d. Demographic
Q:
The study of the general and industry environments of a business context to identify potential startup opportunities
Q:
Observations about the external environment and organizational potentials can be brought together by means of
a. an alignment strategy.
b. the in-and-out assessment.
c. a SWOT analysis.
d. common sense critique.
Q:
Those organizational resources that are visible and easy to measure
Q:
Rumpelstiltskin, an imp in a Grimm Brothers fairy tale, could spin straw into gold. We would call this a(n)
a. useful skill. b. tangible resource.
c. intangible resource d. capability.
Q:
The basic inputs that a firm uses to conduct its business
Q:
As Chinas production of exportable goods increases, Chinese workers have more money to spend on consumer items. Other developing countries are experiencing the same growth. Which type of trend does this represent?
a. Economic b. Sociocultural
c. Global d. Demographic
Q:
Identification of potential new products or services that may lead to promising businesses
Q:
Israel Kirzner believes entrepreneurs have a unique capability, which he calls _________ ________, to spot existing opportunities for businesses.
a. innovative thinking b. market awareness
c. entrepreneurial alertness d. opportunity recognition
Q:
A plan of action that coordinates the resources and commitments of an organization to achieve superior performance
Q:
According to the feasibility analysis framework, an entrepreneur who has a vision of a multi-unit company will
a. be satisfied with an attractive niche so the company can gain market share.
b. check to see if the health of the micro-market is strong enough for future macro-market growth.
c. desire a healthier micro-market potential growth over the health of the macro-market.
d. be satisfied with an attractive niche if it would serve as a point of entry for long-term potential.
Q:
To refocus or recreate a startup if the initial concept turns out to be flawed
Q:
Considering Michael Porters five factors, the automotive industry in the United States is characterized by:
a. weak rivalry. b. high barriers to entry.
c. many substitute products. d. weak suppliers.
Q:
Those organizational resources that are invisible and difficult to assess
a. opportunity recognition
b. outside-in analysis
c. pivot
d. resources
e. serendipity
f. startups
g. strategy
h. SWOT analysis
i. tangible resources
j. paradox of attraction
Q:
Jesse would like to start a landscaping company that concentrates on using native plants. The feasibility study showed a need for $100,000 to start the company (she has $10,000), competition of three other companies (one concentrated on using native plants), and buyers who were predominantly 60 years or older (who loved yard work). Which statement is true?
a. This plan shows fatal flaws with financing, competition, and market as none of these flaws could be fixed.
b. The plan has a fatal flaw with financing and competition as the market might have an interest in her speciality.
c. The plan has a fatal flaw with financing but competition might not be as much of an issue if the native plant landscaping is growing with the buyers.
d. The plan could be fixed if an investor went into business with her.
Q:
The broad environment, encompassing factors that influence most businesses in a society
Q:
According to Michael Porter, a focus strategy can erode when
a. the strategy is protected.
b. the target segment's differences from other segments narrow.
c. new firms reconstruct the industry.
d. demand for the product grows and thus attracts new competitors.
Q:
Startup ideas involving new or relatively new technology, centered around providing customers with a new product
Q:
Miriam opened a yarn craft store in her small town based on her personal interests and hobbies. There were no competitors locally; the merchandise was readily available; and she had the initial capital to open the store. Yet her business failed. Too few customers visited her store. What was Miriams fatal flaw?
a. The merchandise was patent-protected. b. Miriam could not raise enough capital.
c. Miriam lacked industry knowledge. d. Miriam ignored the market limitations.
Q:
The environment that includes factors that directly impact a given firm and all of its competitors
Q:
Resources are best described as
a. those basic inputs that a firm uses to conduct its business.
b. only those features that are visible and easy to quantify.
c. the firm's lending capacity.
d. capabilities that can be exploited.
Q:
A plan of action that requires a firm to hold down its costs so that it can compete by charging lower prices and still make a profit
Q:
Miltons Auto Service is a small auto maintenance and repair shop located in a small town in a garage behind Miltons house. Milton doesnt charge as much as auto dealerships so he has a steady stream of local customers. Which of the following best describes Miltons strategy?
a. innovation b. strategic alliances
c. cost-based d. differentiation
Q:
Startup ideas centered around providing customers with new or improved products or services
Q:
The two broad strategies for building a competitive advantage are the _____ strategies.
a. cost-based and differentiation-based
b. price-advantage and cost-advantage
c. marketing-advantage and price-advantage
d. focus-advantage and marketing-advantage
Q:
A plan of action that isolates an enterprise from competitors and other market forces by targeting a restricted market segment
Q:
Which of the following could be considered a core competency?
a. Zappos 365 day return policy b. NutriSystems claim that users lose weight by eating
c. McDonalds ability to fry hamburgers quickly d. Southwest Airlines ability to make flying fun
Q:
An assessment that catalogs the startups sources of potential strengths
Q:
Considering Michael Porters five factors, the chicken meat processing industry is characterized by:
a. low barriers to entry. b. intense rivalry among competitors.
c. availability of many substitutes. d. strong buyers.
Q:
The very feature of a market that makes it attractive to one small company (the lack of competition) will make it attractive to others; this fact is called the __________ ___ ___________.
a. cost-based strategy
b. focus strategy
c. general environment
d. industry environment
e. inside-out analysis
f. intangible resources
g. new benefit ideas
h. new market ideas
i. new technology ideas
Q:
Substitute products
a. reduce the attractiveness and profitability of an industry.
b. represent those items manufactured by direct rivals within an industry.
c. are usually cheaper than the products they can replace.
d. are always a serious threat to rivals in an industry.
Q:
A computer technician recognizing a need for more aesthetically pleasing computers would be said to have entrepreneurial _____.
a. technology
b. alertness
c. strategy
d. rivalry
Enter the appropriate word(s) to complete the statement.
Q:
Verlin worked in a cabinet shop until he became frustrated that his ideas for improving efficiency were falling on deaf ears. So he left and started his own cabinet shop where he could implement those ideas. From which source did his ideas for his startup come?
a. From hobbies b. From personal interests
c. From accidental discovery d. From work experience
Q:
Tangible resources include:
a. cash, technology, and raw materials. b. cash, management expertise, and a good reputation
c. management expertise, a good reputation, and technology. d. intellectual property rights, equipment, and a skilled workforce.
Q:
Which action is a cause for erosion of a small firm's focus strategy?
a. Consumer demand grows.
b. New firms reconstruct the industry.
c. Differences between segments grow larger.
d. The focus strategy is imitated.
Q:
_____ refers to the way entrepreneurs identify new products or services that may lead to promising businesses.
a. Focus-based decisions
b. Elasticity
c. Opportunity recognition
d. Cost-benefit analysis
Q:
Noland has identified an underserved market for his product. Competitors are not likely to notice his efforts to attract his target market, and his product fills a need for these customers. Noland has found:
a. an opportunity sweet spot. b. a core competency.
c. a competitive advantage. d. a capability.
Q:
An example of an idea for a new startup from an accidental discovery 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:
Considering Michael Porters five factors, we can say that the fast food hamburger industry is characterized by:
a. intense rivalry. b. strong suppliers.
c. strong buyers. d. ease of entry into the industry.
Q:
Carol enjoyed yarn crafts but there were no yarn shops in her small town. She reasoned that there were many others nearby who might appreciate being able to purchase yarns and supplies without a long drive. Within a year her shop was profitable and expanding into larger space. Which of these statements best describes this situation?
a. Carol grew a business out of her personal experience. b. Carol turned her hobby into a thriving business.
c. Carol accidentally stumbled upon a gold mine. d. Carol used her work experience as a source of startup ideas.
Q:
Miles startup company began well but within a couple months he found he was unable to pay invoices from suppliers. He didnt understand how he could have this problem. He hired experts; his business idea was sound; and he had many new customers. What went wrong?
a. Miles lacked critical technologies. b. Miles lacked patents or copyrights.
c. Miles lacked raw materials. d. Miles lacked cash resources.
Q:
Julie, owner of a bed and breakfast inn, had been asked repeatedly to cater events. Once she realized her kitchen was not being used during the later part of the day, she started the company. This change is an example of
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:
O-MY-U once had a winning team in every college sport. But athletes graduate and fortunes change. Attendance at the games dropped when the team had a losing season. Bob and Shirley found it difficult to attract enough guests to their bed-and-breakfast to cover their costs. How would Michael Porter explain this?
a. The focus strategy was imitated. b. Demand disappeared.
c. The target segment lost its uniqueness. d. New firms subsegmented the industry.
Q:
When conducting an outside-in analysis, one should consider the _____ environment followed by the _____ environment.
a. general; industry
b. general; natural
c. industry; natural
d. industry; political
Q:
A differentiation-based strategy requires that a firm
a. be the lowest-cost provider in an industry.
b. emphasize the uniqueness of its product or services.
c. achieve the highest resource efficiency in an industry.
d. be the lowest-priced competitor in an industry.
Q:
Discuss the issues related to Internet usage and personal privacy from both a business perspective and an employee standpoint. What should a small business do to decrease conflict?