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Q:
What is a strategic asset? Provide an example of a strategic asset that is utilized by an entrepreneurial firm.
Q:
Briefly describe the four main components of a business model. Identify the subcomponents of each the four main components of a business model.
Q:
Describe the two potential fatal flaws of business models.
Q:
Why is it important for a firm to have a well-thought-out business model?
Q:
What is meant by the statement, "A firm's business model takes it beyond its own boundaries"? Provide an example to illustrate your answer.
Q:
Fulfillment and support describes the way a firm's product or service "goes to market" or how it reaches its customers.
Q:
A firm's target market is the limited group of individuals or businesses that it goes after or tries to appeal to.
Q:
A network is a hub-and-wheel configuration with a local firm at the hub organizing the interdependencies of a complex array of firms.
Q:
A resource chain is the network of all the companies that participate in the production of a product, from the acquisition of raw materials to the final sale.
Q:
Companies ultimately try to combine their core competencies and strategic assets to create a sustainable competitive advantage.
Q:
Strategic assets are anything rare and valuable that a firm owns.
Q:
The process of adapting a company's core competencies to exploit new opportunities is referred to as resource leverage.
Q:
A core competency is a resource or capability that serves as a source of a firm's competitive advantage over its rivals.
Q:
Historically, it has been difficult for a new venture to use a differentiation strategy.
Q:
A company's product/market scope defines the products and markets on which it will concentrate.
Q:
Fortunately, if three of the four components of a firm's business model are in place, the firm has a high probability of success.
Q:
The four components of an effective business model include: core strategy, strategic resources, partnership network, and customer interface.
Q:
Two fatal flaws can render a business model untenable from the beginning: a complete misread of the customer and underutilization of the Internet.
Q:
The primary activities in a firm's value chain include: inbound logistics, operations, outbound logistics, marketing and sales, and service.
Q:
By studying a product's value chain, an organization can identify ways to create additional value and assess whether it has the means to do so.
Q:
A clearly articulated business model articulates a company's core logic to all stakeholders, including the firm's employees.
Q:
There is no standard business model that dictates how firms in a particular industry should compete.
Q:
Almost all firms partner with others to make their business models work.
Q:
A firm's business model resides within its own boundaries.
Q:
A business plan is a firm's plan or diagram for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the profits it earns.
Q:
Fulfillment and support describes:
A) how a firm manages its customer relationships
B) the way a firm's product or service "goes to market" or how it reaches its customers
C) how a firm manages its employees
D) the products and markets on which a firm will compete
E) how a firm competes relative to its competitors
Q:
Gary Smith just launched a firm in the sports drink industry. He has decided to focus his efforts on appealing to extreme sports enthusiasts (examples include hang gliders, rock climbers, and parachutists). In Gary's case, extreme sports enthusiasts represent his firm's:
A) target objective
B) target market
C) goal objective
D) intention market
E) object market
Q:
A firm's ________ is the limited group of individuals or businesses that it goes after or tries to appeal to.
A) target objective
B) goal objective
C) intention market
D) target market
E) object market
Q:
In a business model context, the three components of a firm's customer interface are target customer, fulfillment and support, and:
A) pricing structure
B) product/market scope
C) basic for differentiation
D) strategic assets
E) business mission
Q:
The Partnering for Success feature in Chapter 6 focuses on 99designs, an online company that features a "crowdsourcing" model for getting design work done. 99designs' approach to partnering with ________ is the essence of its disruptive business model.A) professional art studiosB) freelance designersC) art studentsD) Google, Yahoo, and MicrosoftE) art teachers
Q:
________, a relatively new approach to partnering, takes place when a service provided comes inside a partner's facilities and helps the partner design and manage its supply chain.
A) Permeating
B) Infiltrating
C) Penetrating
D) Fulfilling
E) Insourcing
Q:
Organizations (typically nonprofit) that are formed by firms in the same industry to collect and disseminate trade information, offer legal and technical advice, furnish industry-related training, and provide a platform for collective lobbying are called:
A) strategic alliances
B) trade associations
C) networks
D) joint ventures
E) consortia
Q:
A ________ is a group of organizations with similar needs that band together to create a new entity to address those needs.
A) joint venture
B) network
C) consortia
D) strategic alliance
E) trade association
Q:
An arrangement between two or more firms that establishes an exchange relationship but has no joint ownership involved is called a:
A) network
B) trade association
C) consortia
D) joint venture
E) strategic alliance
Q:
A hub and wheel configuration with a local firm at the hub organizing the interdependencies of a complex array of firms is referred to as a:
A) trade association
B) strategic alliance
C) network
D) joint venture
E) consortia
Q:
The network of companies that participate in the production of a product, from the acquisition of raw materials to the final sale, is referred to as the:
A) input chain
B) participation chain
C) supply chain
D) involvement network
E) contribution chain
Q:
A supplier is a company that:
A) purchases a company's products
B) helps a firm put together its network of contacts
C) provides startups with funding
D) provides startups with business advice
E) provides parts or services to another company
Q:
In a business model context, the three components of a firm's partnership network are:
A) business mission, partners, and strategic assets
B) core competencies, suppliers, and target customer
C) suppliers, partners, and other key relationships
D) business mission, product/market scope, and basis for differentiation
E) pricing structure, fulfillment and support, and target customer
Q:
________ are anything rare and valuable that a firm owns.
A) Tactical assets
B) Tactical properties
C) Deliberate assets
D) Strategic assets
E) Operational assets
Q:
________ is the process of adapting a firm's core competencies to exploit new opportunities.
A) Resource leverage
B) Capacity proficiency
C) Ability leverage
D) Aptitude embellishment
E) Capacity extension
Q:
Zappo's competence in customer service, Apple's competence in designing consumer products, and Netflix's competence in supply chain management are examples of ________, which serve as each of these respective firms' competitive advantage of their rivals.
A) foundational competencies
B) core competencies
C) core elements
D) distinguishing attributes
E) foundational attributes
Q:
A ________ is a resource or capability that serves as a source of a firm's competitive advantage over its rivals.
A) foundational competency
B) core competency
C) distinctive attribute
D) center attribute
E) core element
Q:
Susan Spector is in the process of putting together the business model for her startup and is currently working on her core competencies and strategic assets. Which of the components of her business model is Susan working on?
A) core strategy
B) strategic resources
C) partnership network
D) customer interface
E) feasibility analysis
Q:
Match the business model component with its explanation:
A) core strategy/how a firm structures and nurtures its partnerships
B) customer interface/how a firm acquires and uses its resources
C) strategic resources/how a firm acquires and uses its resources
D) partnership network/how a firm competes
E) core strategy/how a firm interfaces with its customers
Q:
Firms that have a ________ strategy strive to have the lowest costs in the industry, relative to competitors' costs, and typically attract customers on that basis. In contrast, firms using a ________ strategy compete on the basis of providing unique or different products and typically compete on the basis of quality, service, timeliness, or some other important dimension.
A) differentiation, cost leadership
B) cost emphasis, quality leadership
C) cost leadership, differentiation
D) price reduction, quality plus
E) cost differentiation, quality plus
Q:
Jared King is starting a firm in the electronic games industry. The firm will produce games similar to popular games on the market, but they won't be as sophisticated and will be priced at the low end of the market. Jared has chosen the generic strategy referred to as:
A) price reduction
B) differentiation
C) quality plus
D) cost leadership
E) cost differentiation
Q:
Kendra Johnson is starting a firm in the shoe industry. Her shoes will be very high quality and will be priced at the top end of the market. Kendra has chosen the generic strategy referred to as:
A) value pricing
B) differentiation
C) competitive superiority
D) separation
E) quality plus
Q:
From a broad perspective, firms choose one of two generic strategies to position themselves in the marketplace. These are:
A) high quality and low cost
B) discount pricing and premium pricing
C) value and low cost
D) cost leadership and differentiation
E) cost premium and separation
Q:
Which of the following statements is incorrect regarding the "core strategy" component of a firm's business model?
A) A firm's core strategy describes how it competes relative to its competitors.
B) The product a firm chooses has little impact on its core strategy and business model.
C) A company's product/market scope defines the products and markets on which it will compete.
D) From a broad perspective firms typically choose one of two generic strategies: cost leadership or differentiation.
E) The generic strategy a firm chooses greatly affects its business model.
Q:
A company's ________ defines the products and markets on which it will concentrate.
A) tactical analysis
B) business mission
C) product/market scope
D) supplier/buyer scope
E) basis of differentiation
Q:
"Organize all the world's information and make it universally accessible and useful" is Google's:
A) function
B) duty
C) credo
D) purpose statement
E) mission statement
Q:
A firm's ________ describes why it exists and what its business model is supposed to accomplish.
A) mission statement
B) vision statement
C) feasibility statement
D) duty statement
E) responsibility statement
Q:
Steven Tanner is in the process of putting together the business model for his startup and is currently working on his mission statement, product/market scope, and basis for differentiation. Steven is working on the ________ component of his business model.
A) core strategy
B) strategic resources
C) partnership network
D) customer interface
E) feasibility analysis
Q:
Which of the following are the primary elements of a startup's core strategy?
A) target customer, fulfillment and support, pricing structure
B) suppliers, partners, other key relationships
C) pricing structure, suppliers, strategic assets
D) core competencies, strategic assets, funding model
E) mission statement, product/market scope, basis for differentiation
Q:
Jeff Mommer is starting an environmentally friendly lawn and garden service. One thing that Jeff has worked hard on is determining how his company will compete in the marketplace. This element of Jeff's business model is referred to as:
A) core strategy
B) strategic resources
C) partnership network
D) fulfillment and support
E) customer interface
Q:
The What Went Wrong? feature in Chapter 6 focuses on Joost, a company that launched in 2006 as a premier online video service that aggregated and streamed premium video online. Joost failed just three years after it launched. According to the feature, Joost's most critical mistake dealt with subtle aspects of its business model. In particular, its:A) core strategy wasn't focusedB) pricing model was misguidedC) partnership network never came togetherD) customer interface was poorly conceivedE) customer service strategy was poorly executed
Q:
Which of the following is not one of the components of a firm's business model?
A) core strategy
B) strategic resources
C) partnership network
D) business plan
E) customer interface
Q:
The four components of a firm's business model are:
A) marketing plan, core strategy, business plan, and customer interface
B) core strategy, strategic resources, partnership network, and customer interface
C) economic environment, social environment, technological environment, and legal-regulatory environment
D) opportunity recognition, feasibility analysis, business plan, and human resource plan
E) marketing plan, operating plan, financial plan, and human resource plan
Q:
Two fatal flaws can render a business model untenable from the beginning. These are utterly unsound economics and:
A) a complete misread of the customer
B) failure to copy the industry leader's business plan
C) overemphasis on the importance of feasibility analysis
D) overemphasis on the importance of industry analysis
E) failure to complete a business plan prior to developing a business model
Q:
________ involves all the activities required to manufacture a product.
A) Resource procurement
B) Administration
C) Operations
D) Outbound logistics
E) Inbound logistics
Q:
________ involves a firm's relationship with its suppliers and involves all the activities of receiving, storing, and shipping component parts to the place where they will be added to the final product.
A) Resource procurement
B) Operations
C) Outbound logistics
D) Technology development
E) Inbound logistics
Q:
Which of the following is a "support" activity in the value chain?
A) inbound logistics
B) service
C) marketing and sales
D) outbound logistics
E) resource procurement
Q:
Two fatal flaws can render a business model untenable from the beginning. These are:
A) failure to complete a business plan and failure to get funding
B) a complete misread of the customer and utterly unsound economics
C) failure to copy the industry leader's business plan and a complete misread of the customer
D) failure to complete a business plan and overemphasizing the importance of feasibility analysis
E) overemphasizing the importance of feasibility analysis and utterly unsound economics
Q:
According to the textbook, by studying a product's or service's value chain an organization can:
A) identify ways to create additional value and assess whether it has the means to do so
B) determine if its business plan needs to be revised
C) determine if it is cost effective to manufacture the product or sell the service
D) determine if an attractive niche market is available
E) determine if a product or service will be successful in the marketplace
Q:
Which of the following is a "primary" activity in the value chain?
A) resource procurement
B) technology development
C) outbound logistics
D) firm infrastructure
E) human resource management
Q:
Which of the following is not a "primary" activity in the value chain?
A) inbound logistics
B) marketing and sales
C) service
D) technology development
E) outbound logistics
Q:
The ________ is the string of activities that moves a product from the raw material stage, through manufacturing and distribution, and ultimately to the end user.
A) consequence sequence
B) business chain
C) meaning chain
D) value chain
E) worth procession
Q:
In the WebHouse example included in Chapter 6, WebHouse failed because:A) it did not complete a feasibility analysisB) it did not write a complete business planC) it couldn't motivate its suppliers or customers to participate at a sufficient scale to support the overhead of the businessD) it charged too much for its servicesE) it failed to focus on developing a core strategy
Q:
Which of the following is not one of the purposes of a business model?
A) serves as an ongoing extension of feasibility analysis
B) serves as a template for conducting industry analysis
C) focuses attention on how all the elements of a business fit together
D) describes why the network of participants needed to make a business idea viable is willing to work together
E) articulates a company's core logic to all stakeholders
Q:
The Savvy Entrepreneurial Firm feature in Chapter 6 focuses on three business model innovators: Warby Parker, Shopkick, and SunRun. What is Shopkick's business model innovation?A) rewarding shoppers by the number of times they visit a Web siteB) rewarding shoppers by simply walking into a retail storeC) rewarding shoppers by the amount of time they spend in a particular storeD) rewarding shoppers by the number of times they visit a particular storeE) rewarding shoppers by the number of times they "tweet" about a particular store on Twitter
Q:
The term ________ refers to initiatives, such as Netflix in movie rentals and Zipcar in car sharing, which revolutionize how products are sold in an industry.
A) product model modernism
B) business model innovation
C) feasibility analysis innovation
D) value innovation
E) opportunity innovation
Q:
In regard to business models, which of the following statements is incorrect?
A) There is a standard business model that most firms follow.
B) A firm's business model is inherently dependent on the collection of resources it controls and the capabilities it possesses.
C) It is dangerous for a company to assume that it can be successful by simply copying the business model of another firm.
D) A firm's business model is its plan or diagram for how it competes.
E) It is often difficult to determine what another firm's business model is.
Q:
Catherine Smith has just finished writing a business plan for a startup in the medical products industry. She has now reached the point where she needs to develop a plan for how her firm will compete, use its resources, structure its relationships, interface with customers, and create value to sustain itself on the basis of the profits it earns. Jennifer needs to establish her firm's:
A) tactical plan
B) feasibility plan
C) business model
D) business template
E) operating plan
Q:
The opening feature in Chapter 6 focuses on Stroome, an exciting new Web-based service for editing and remixing video. The idea for Stroome emerged in:A) a graduate communications class at the University of Southern CaliforniaB) a student-run incubator at the University of IllinoisC) a technology commercialization class at CornellD) a city-owned new business incubator in ClevelandE) a business plan class at Kansas State
Q:
Stroome, the focus on the opening feature for Chapter 6, has developed a new Web-based service for editing and remixing video. Stroome's initial business model is based on making money in the following two ways:A) subscription fees and licensing its software to film producersB) a "freemium" pricing model and white labeling its siteC) online advertising and affiliate feesD) white labeling its site and subscription feesE) Google AdSense and affiliate fees
Q:
What is competitive intelligence? What are some of the ways that a firm can ethically obtain information about its competitors?
Q:
What is an emerging industry? What is the primary opportunity available to entrepreneurial firms in emerging industries? Name three examples of firms in emerging industries.
Q:
Discuss the nontraditional barriers to entry identified in the chapter. Why is it important that entrepreneurial firms utilize one or more of these forms of barriers to entry?
Q:
Identify the five competitive forces that determine industry profitably. Explain the purpose of analyzing these forces?
Q:
What is industry analysis? Why is it important for a new venture to complete a thorough analysis of the industry it is entering?