Q&A Hero

Q: A(n) ________ is a written document that describes all the aspects of a business venture in a concise manner. A) business plan B) business model C) operations plan D) corporate plan E) contingency plan

Q: An event that prompts an individual to become an entrepreneur, such as losing a job, inheriting money, or accommodating a certain lifestyle, is referred to as a(n): A) prompting event B) entrepreneurial prompt C) initiating event D) triggering event E) kick-off event

Q: Which of the following is not one of the four steps of the entrepreneurial process? A) deciding to become an entrepreneur B) determining how to seize the spotlight C) developing successful business ideas D) moving from an idea to an entrepreneurial firm E) managing and growing the entrepreneurial firm

Q: Which of the following is the correct sequence for the four steps in the entrepreneurial process? A) deciding to become an entrepreneur, developing successful business ideas, moving from an idea to an entrepreneurial firm, managing the growing entrepreneurial firm B) developing successful business ideas, deciding to become an entrepreneur, moving from an idea to an entrepreneurial firm, managing and growing the entrepreneurial firm C) developing successful business ideas, moving from an idea to an entrepreneurial firm, deciding to become an entrepreneur, managing and growing the entrepreneurial firm D) deciding to become an entrepreneur, moving from an idea to an entrepreneurial firm, developing successful business ideas, managing and growing the entrepreneurial firm E) managing and growing the entrepreneurial firm, developing successful business ideas, deciding to become an entrepreneur, moving from an idea to an entrepreneurial firm

Q: The Partnering for Success feature in Chapter 1 focuses on how pharmaceutical products are brought to market. The "lesson learned" from the feature for entrepreneurs is:A) large firms and smaller entrepreneurial firms can often produce the best results by partnering with each other rather than acting as adversariesB) it rarely works out for large firms and smaller entrepreneurial firms to partner with each other, particularly in the pharmaceutical industryC) the most compelling partnerships between smaller entrepreneurial firms and large firms allow both categories of firms to be generalists, and not focus strictly on their areas of expertiseD) partnerships between smaller entrepreneurial firms and large firms almost always favor the smaller entrepreneurial firms, particularly in the pharmaceutical industryE) partnerships between smaller entrepreneurial firms and large firms almost always favor the large firm, particularly in the pharmaceutical industry

Q: Which of the following statements is incorrect regarding the economic impact of entrepreneurial firms in the United States? A) Small businesses outperform their larger counterparts in terms of patent activity. B) Small firms are providers of a significant share of the innovations that take place. C) According to a Kauffman Foundation survey, 92% of Americans say entrepreneurs are critically important to job creation. D) Small businesses employ just less than half of all private sector employees. E) Small businesses are the creators of most new jobs.

Q: In regard to patent activity (issuance), which of the following statements is correct? A) Small businesses outperform their larger counterparts. B) Small businesses underperform their larger counterparts. C) Small businesses and large businesses are relatively equal. D) Small businesses are not active in patent activity. E) Large businesses are not active in patent activity.

Q: ________ is the process of creating something new, which is central to the entrepreneurial process. A) Creative destruction B) Modernism C) Execution D) Creativity E) Innovation

Q: According to the textbook, entrepreneurship has historically had: A) a major impact on the economy and minor impact on society B) a minor impact on both the economy and society C) a major impact on society and minor impact on the economy D) a major impact on both the economy and society E) no impact on either the economy or society

Q: In the book The Theory of Economic Development, ________ argued that entrepreneurs develop new products and technologies that over time make current products and technologies obsolete. This process is called creative destruction. A) Michael Porter B) H.H. Stevenson C) Joseph Schumpeter D) Thomas Friedman E) Jim Collins

Q: As new products that are better than the existing generation of products are introduced, sales normally increase because the new products provide consumers increased value or worth. This process, which is called ________, stimulates economic activity, which is a good thing for the economy. A) creative destruction B) repetitive destruction C) iterative replacement D) inventive replacement E) iterative destruction

Q: At the high school and younger level, according to a Harris Interactive Survey, ________ said they'd like to start their own business someday. A) 10% B) 20% C) 30% D) 40% E) 50%

Q: Which of the following was not given in the textbook as a reason for the increase in the number of senior entrepreneurs? A) Seniors tend to be more passionate about new business ideas than middle-aged or younger prospective entrepreneurs. B) Many seniors have extensive business experience and other qualities that equip them for an entrepreneurial career. C) Growing worries among seniors that they need to earn additional income to pay for future health care services and other expenses D) An increasing desire among older workers for more personal fulfillment in their lives E) corporate downsizing

Q: Among minorities, ________ -owned firms had the highest growth rate from 1996 to 2010. A) Pacific Islander B) Asian American C) African American D) Latino E) American Indian

Q: Which of the following statements is not true about women-owned businesses in the United States? A) There are a growing number of groups that support and advocate for women-owned businesses. B) Women-owned firms still trail male-owned businesses in terms of sales and profits. C) The top industry for women-owned firms is manufacturing. D) Over 50% of women-owned firms are home-based. E) The number of women-owned businesses is increasing.

Q: According to the textbook, Google, Facebook, and Zynga are examples of ________ firms. A) lifestyle B) salary-substitute C) industry-standard D) entrepreneurial E) standard-of-living

Q: Entrepreneurial firms: A) are small firms that yield a level of income for their owner or owners that is similar to what they would earn when working for an employer B) bring to market new products and services that are not particularly innovative C) offer to customers common products that are not particularly innovative, and provide their owner or owners the opportunity to pursue a particular lifestyle and earn a living while doing so D) provide their owner or owners the opportunity to pursue a particular lifestyle and earn a living while doing so E) bring new products and services to market by creating and seizing opportunities

Q: Tahoe Trips & Trails, a company mentioned in Chapter 1, leads multiday outdoor adventure trips for private groups and corporate clients to Lake Tahoe, Yosemite, Death Valley, and similar locations. The company was started by Hanna Sullivan, an individual that gave up a prestigious job with a private investment company because Tahoe Trips & Trails better accommodates her personal lifestyle. Tahoe Trips & Trails is an example of a(n)A) entrepreneurialB) salary-substituteC) standard-of-livingD) statutoryE) lifestyle

Q: Kentucky Soup and Salad is a casual dining restaurant that has been owned by Kenneth Peterson for the past 11 years. The restaurant offers a menu that is typical for casual dining restaurants and affords Kenneth a level of income that is similar to what he would earn in a conventional job. According to the textbook, Kentucky Soup and Salad is an example of a(n): A) salary-substitute firm B) entrepreneurial firm C) quality-of-life firm D) lifestyle firm E) industry-standard firm

Q: According to the textbook, there are three types of startup firms: entrepreneurial firms, lifestyle firms, and: A) civil firms B) salary-substitute firms C) statutory firms D) standard-of-living firms E) innovative firms

Q: According to the textbook, there are three types of startup firms: A) lifestyle firms, general firms, and entrepreneurial firms B) standard-of-living firms, statutory firms, and general firms C) entrepreneurial firms, standard-of-living firms, and statutory firms D) lifestyle firms, salary-substitute firms, and entrepreneurial firms E) innovative firms, entrepreneurial firms, and standard firms

Q: Pacific Printing LLC is a startup that is working on a new technology for the printing industry. Because the technology it's working on is highly proprietary, the company is located in the warehouse district of a large western city. Pacific's founder, Jan Sims, rarely gives interviews, and is careful to not divulge much about what the company is doing. Which of the following common myths about entrepreneurs does the behavior of its founder, Jan Sims, dispel? A) Entrepreneurs are born, not made. B) Entrepreneurs are gamblers. C) Entrepreneurs are motivated primarily by money. D) Entrepreneurs should be young and energetic. E) Entrepreneurs love the spotlight.

Q: According to Chapter 1, a sentiment that venture capitalists often express is that:A) the strength of the entrepreneur and the strength of the business idea are of equal importanceB) they would never fund a strong entrepreneur with a weak business ideaC) they would rather fund a strong entrepreneur with a mediocre business idea than fund a strong business idea with a mediocre entrepreneurD) a new venture's marketing plan is more important than either the strength of the entrepreneur or the strength of the business ideaE) they would rather fund a strong business idea with a mediocre entrepreneur than fund a strong entrepreneur with a mediocre business idea

Q: According to Chapter 1, investors often cite the ________ as their most important criterion in the decision to fund new ventures.A) financial position of the new ventureB) strength of the industry the new firm is enteringC) strength of the new venture's marketing planD) strength of the business ideaE) strength of the entrepreneur

Q: According to the textbook, the biggest jump in entrepreneurial activity, by age range, from 1996 to 2010 is among entrepreneurs in the: A) 19 years old and younger age range B) 20 to 34 age range C) 35 to 44 age range D) 45 to 54 age range E) 55 to 64 age range

Q: Which of the following statement is correct regarding entrepreneurial activity and age ranges? A) The highest percentage of entrepreneurs falls in the 19 years old and younger age range. B) The highest percentage of entrepreneurs falls in the 20 to 34 age range. C) The highest percentage of entrepreneurs falls in the 35 to 44 age range. D) The highest percentage of entrepreneurs falls in the 45 to 54 age range. E) The highest percentage of entrepreneurs falls in the 55+ age range.

Q: Which of the following is not a personality trait or characteristic common among entrepreneurs? A) promoter B) visionary C) short attention span D) alert to opportunities E) self-starter

Q: Suppose you are a Small Business Development Center counselor and you're looking at the personality profiles of five potential entrepreneurs. Based on the profiles, which individual has the most desirable mix of personal characteristics to become a successful entrepreneur? A) Candidate A: visionary, energetic, moderate risk taker B) Candidate B: seeks recognition, self-starter, creative C) Candidate C: visionary, high risk taker, energetic D) Candidate D: high risk taker, achievement-motivated, networker E) Candidate E: tolerant for ambiguity, seeks recognition, motivated primarily by money

Q: According to the textbook, entrepreneurs are: A) gamblers B) moderate risk takers C) aggressive risk takers D) forceful risk takers E) minimal risk takers

Q: Which of the following was not identified in the textbook as one of the common traits and characteristics of entrepreneurs? A) has a strong work ethic B) intolerant of ambiguity C) visionary D) promoter E) decisive

Q: Which of the following is not one of the five common myths about entrepreneurs? A) Entrepreneurs are tenacious. B) Entrepreneurs are moderate risk takers. C) Entrepreneurs should be young and energetic. D) Entrepreneurs love the spotlight. E) Entrepreneurs are born not made.

Q: The Savvy Entrepreneurial Firm feature in Chapter 1 focuses on Revio Mobile (maker of Angry Birds) and Zeo, two companies that have produced successful products. The feature's main purpose is to illustrate the importance of ________ as a key characteristic of the founders of entrepreneurial firms.A) execution intelligenceB) a desire to pursue financial rewardsC) tenacity despite failureD) passion for the businessE) product/customer focus

Q: Chad and Allison Druxman launched a firm several years ago and have been particularly successful in introducing new products to the marketplace. One thing that Chad and Allison are particularly good at is translating their thoughts, creativity, and imaginations into products that reach the marketplace. The ability to make this happen is most closely related to which of the following characteristics of successful entrepreneurs? A) passion for the business B) execution intelligence C) tenacity despite failure D) product/market focus E) a desire for recognition

Q: The What Went Wrong? feature in Chapter 1 focuses on YouCaster, a company that was launched in 2006 but eventually went out of business. According to the feature, YouCaster failed for two primary reasons:A) a poorly equipped team of entrepreneurs and a lack of passionB) too few customers and a lack of intellectual property protectionC) a lack of resolve and poor execution intelligenceD) a lack of execution intelligence and a poor product/customer focusE) a lack of passion and too few customers

Q: Stacey Wills, who is at heart a craftsperson, recently started a firm to manufacturer a new innovative food blender. Stacey's desire is to sell her food blender to as many people as possible, because she firmly believes in the merits of her product. Stacey's story best illustrates which of the following characteristics, or attributes, of a successful entrepreneur? A) product/customer focus B) execution intelligence C) tenacity despite failure D) a desire to please consumers E) a desire to gain financial rewards

Q: Which of the following was not identified in the textbook as one of the five primary reasons passion is important for the launch of a successful entrepreneurial organization? A) the ability to stick to a plan even when faced with evidence that changes are needed B) a willingness to work hard for an extended period of time C) ability to overcome setbacks and "no's" D) the ability to listen to feedback on the limitations of your organization and yourself E) perseverance and persistence when the going gets tough

Q: The number one characteristic shared by successful entrepreneurs is: A) a desire to achieve financial rewards B) passion for the business C) a desire to employ other people D) a desire to fulfill a lifetime dream E) a desire to bring a revolutionary new product or service to market

Q: According to the textbook, the four characteristics of successful entrepreneurs are: A) passion for the business, on the cutting edge of technological change, very charismatic, and tenacity despite failure B) young and energetic, passion for the business, product/customer focus, and seeks recognition C) passion for the business, tenacity despite failure, product/customer focus, and execution intelligence D) on the cutting edge of technological change, forward thinking, tenacity despite failure, and product/customer focus E) passion for the business, seeks recognition, young and energetic, and execution intelligence

Q: James Quinn is starting a firm in the financial services industry primarily to pursue financial rewards. According to the textbook, starting a business to make a lot of money: A) often fails to live up to its hype B) is equally as satisfying as other reasons for starting a business C) is the number one reason people start their own business D) is the number two reason that people start their own business, right behind the lack of better career prospects E) does not rank among the top three reasons that people start their own business

Q: According to the textbook, the number one reason that people become entrepreneurs is to: A) realize financial rewards B) gain prestige C) be their own boss D) continue a family tradition E) pursue their own ideas

Q: The three primary reasons that people become entrepreneurs and start their own firms are to: A) gain prestige, realize financial rewards, and eliminate risk in their lives B) do what they were "born" to do, be their own boss, and gain prestige C) take big risks, be their own boss, and do what they were "born" to do D) be their own boss, pursue their own ideas, and realize financial rewards E) take advantage of government subsidies, pursue their own ideas, and realize financial rewards

Q: Netflix is an established firm that encourages and emphasizes entrepreneurial behavior throughout its various divisions. According to the textbook, Netflix practices: A) tactical entrepreneurship B) corporate entrepreneurship C) strategic entrepreneurship D) business entrepreneurship E) enterprise entrepreneurship

Q: Sarah Thorton is the founder of a company named Extreme Sports Apparel. The company makes apparel products for extreme sports enthusiasts such as rock climbers, triathletes, parasailors, and BMX bikers. Sarah wants her company to pursue a high level of corporate entrepreneurship. To achieve that goal, Sarah's firm should be: A) innovative, risk averse, and take a "wait and see" posture B) taking a "wait and see" posture, innovative, and risk taking C) proactive, not innovative, and risk taking D) taking a "wait and see" posture, not innovative, and risk averse E) proactive, innovative, and risk taking

Q: Apple Inc. is a firm that is proactive, innovative and risk-taking. From this description, we can most accurately conclude that Apple has a high level of: A) enterprise focus B) innovative intensity C) entrepreneurial intensity D) creative intensity E) innovative concentration

Q: Which of the following statements regarding business success (or failure) rates is correct? A) After four years, 15 percent of new businesses are still open. B) After four years, 25 percent of new businesses are still open. C) After four years, 50 percent of new businesses are still open. D) Two out of three businesses fail within the first four years. E) Nine out of ten businesses fail within the first four years.

Q: According to the Global Entrepreneurship Monitor (GEM) 2007 study, the majority of people in high-income countries are drawn to entrepreneurship: A) to take advantage of an attractive opportunity B) due to lack of career prospects C) as a result of government incentives D) because an important role model was an entrepreneur E) to gain prestige

Q: According to the Global Entrepreneurship Monitor (GEM) 2010 survey, about ________ of adults in the United States are either starting a business or are running a business that has been in existence for less than 3 1/2 years. A) 3.8 percent B) 5.5 percent C) 7.6 percent D) 9.0 percent E) 12.5 percent

Q: Which of the following was not a contributing factor to GiftZip's early success? A) It was becoming increasingly affordable to launch an online business. B) positive PR C) angel investor funding D) People were becoming increasingly comfortable buying online. E) The gift card market was growing.

Q: GiftZip, the company profiled in the opening feature for Chapter 1, makes money via:A) payments from companies that offer gift cards for displaying their cards on the siteB) the direct sale of gift cards displayed on its siteC) monthly subscription feesD) online advertisingE) earning an affiliate fee for gift card purchases that originate from its site

Q: In the context of Gladwells theories, define the terms connectors, mavens, and salespersons.

Q: Frosty Products is coming out with a new type of computerized refrigerator with a flat panel display that accesses the Internet for recipes, nutrition information, etc. Which group (innovators, early adopters, early majority, late majority, or laggards) should the company target its promotion toward initially, and what type of message and medium should it use?

Q: Gerald Rupert is a retired race car driver. He is writing a book and planning a video release to share his racing experiences. He is trying to decide whether to market these items directly to consumers over the Internet or to use intermediaries. To make this decision he needs to know the pros and cons of each route. Provide the necessary information and make a recommendation to him.

Q: When Clary Laboratories released Pearl Soft Shampoo in the late 1970s it was an innovative hair care concept because it repaired split ends. Even though the new product was an improvement on the previous one, Clary Laboratories entered the market with low prices and dealer incentives. Discuss the possible reasons for this marketing strategy.

Q: BioSense Prosthetics was a leader in the prosthetic arm market and profits from its prosthetics were very high. BioSense developed a computerized prosthetic arm and is trying to decide when to introduce it to the market. What options does it have?

Q: Which of the following is true of using marketing to shape perceptions and expectations? a. Preannouncements reduce excitement about a product before its release. b. A firm that aggressively promotes its products loses its actual installed base and its perceived installed base. c. A firm should avoid use of vaporware if other vendors beat the firm to market and the firm fears that customers may select a dominant design. d. A firm can signal its commitment to an industry by making substantial investments that would be difficult to reverse.

Q: Preadvertised products that are not actually on the market yet and may not even exist are referred to as _____. a. substitute products b. value-added products c. consignments d. vaporware

Q: Phoenix Systems desktop is almost in its saturation stage and is mostly being adopted by laggards in the computer market. The company must ensure that its marketing message: a. is high on technical content. b. stresses on simplicity and reliability of the desktop. c. stresses on the leading-edge nature of the desktop. d. reaches the audience through an expensive marketing channel.

Q: In the context of a firms product diffusion curve, when there is a chasm between the early adopters and early majority customers: a. the firm must reduce its production capacity. b. the firm should improve its efficiency to target the mass market. c. the early majority market becomes saturated. d. the early majority market is ready to buy the product.

Q: Which of the following is true of innovators and early adopters? a. They are unwilling to take risks and to pay high prices. b. They may demand considerable customization and technical support. c. They are more likely to respond to marketing that communicates the products completeness. d. For this market segment, detailed technical information is not as important as using market channels with high reach and high credibility.

Q: _____ marketing is an attempt to capitalize on the social networks of individuals to stimulate word-of-mouth advertising. a. Ambush b. Viral c. Test d. Real-time

Q: When movie star Rachels troubled marriage came to the limelight, the sales of her line of clothes and perfumes escalated. This is an example of: a. bundling relationships. b. publicity. c. cannibalization. d. personal selling.

Q: Which of the following is true of the different advertising media? a. Magazines have a short ad purchase lead time. b. Yellow pages have low believability and are expensive. c. Newsletters have a narrow reach, but provide high selectivity. d. Telephone advertising has relatively low cost.

Q: Which of the following is a disadvantage of using the Internet for advertising over other media? a. Relatively high cost b. Low audience selectivity c. Lack of interactive possibilities d. High clutter

Q: BioMark Lifesystems wanted to enhance the adoption of its new diagnostic substances by medical laboratories. It made an agreement with the dominant producer of syringes and test tubes to have its diagnostic substances sold to laboratories in a package along with the syringes and tubes. This arrangement is known as: a. sponsorship. b. product modularity. c. a bundling relationship. d. disintermediation.

Q: When Blue Water publication releases professional books, it lends or donates a number of these new books to university libraries and professors. Which of the following strategies is the firm using to accelerate distribution? a. Bundling relationship b. Product modularity c. Sponsorship d. Consignment arrangement

Q: Super Alarm Inc. makes customized door security systems which it sells under its own brand name. These security systems require installation, extensive customer education, and regular services. _____ will be the most appropriate selling method for Super Alarm Inc. a. Employing a direct sales force b. Creating an online ordering system c. Using a mail-order catalog system d. Using a cannibalization strategy

Q: Blue Water Publication is planning to sell its books solely through its Web site BlueWaterbooks.com. By doing so, it ceases to require wholesalers and retailers. This is an example of: a. disintermediation. b. backward compatibility. c. value added reselling. d. bundling arrangement.

Q: Gemini Car Inc. buys car components from other manufacturers and assembles them into cars, which it sells under its own brand name. This is an example of: a. pirate operator. b. original equipment manufacturer (OEM). c. disintermediation. d. category captain.

Q: Companies that buy manufacturers products in bulk, and then resell them (often in smaller or more diverse bundles) to other supply channel members are referred to as _____. a. wholesalers b. manufacturers representatives c. retailers d. value-added resellers

Q: The Rocketingbusiness.com Web site offers large volumes of business research information for free. If the user is interested in more comprehensive information and business consultation, the site offers these services for a premium fee. This is typically an example of _____ pricing model. a. penetration b. market skimming c. survival d. freemium

Q: When Sports 360, a sports bar in New York, saw yet another sports bar open up across the street it knew that it would have to lower its price again to stay in business. The city already had too many sports bars and Sports 360 intended on being one of those left after the inevitable shake out. The best pricing strategy for Sports 360 will be: a. premium pricing. b. market skimming. c. survival pricing. d. a freemium program.

Q: A(n) _____ price strategy prices goods to cover variable costs and some fixed costs. a. market skimming b. penetration c. survival d. economy

Q: Which of the following is an advantage of making a new generation of technology backward compatible? a. Consumers will have to buy completely new complements. b. Consumer switching costs may be lower because they anticipate using their existing complements. c. It allows a firm to reap the benefits of cannibalization. d. It is typically less expensive to make a new generation of technology backward compatible than to make it incompatible.

Q: Speeding Horse Inc., the leader in the video game console market, is making its new generation consoles backward compatible with its previous games. This means that: a. it is giving away its own installed base or complementary goods advantages to competitors. b. it is providing a significant incentive to the owners of its previously developed consoles and games. c. the transition of customers through product generations will become difficult. d. a large range of complementary goods of the previous generations, mainly the games, will lose its existing value and utility.

Q: Genetech Inc. has produced a new generation video game console. The new product can still be used to run the same games as the previous generation of the video game console. In this context, Genetech is typically applying: a. backward integration. b. backward compatibility. c. backward linkage. d. backward traceability.

Q: If a firm invests in continuous innovation and willingly cannibalizes its existing products with more advanced products, the firm can: a. lose a significant number of customers to competitors. b. make its products more backward compatible. c. prevent competitors from achieving a significant technological lead. d. gain greater trust from distributors who have huge stocks of the existing product.

Q: Maverick Systems was a leader in the phone market and profits from its cell phones were very high. Maverick Systems developed a new generation smartphone and has been advised by a consulting firm to embrace cannibalization. This means that the company should: a. introduce the new technology right away and increase its market lead while taking away profits from its present product. b. delay introduction of the next generation product until profits have begun to significantly decrease for the current product. c. use up most of its financial resources in promoting the new phone. d. wait for the previous cell phone to become obsolete and then introduce this new phone into the market.

Q: BioSense Prosthetics was a leader in the prosthetic arm market and profits from it were very high. The firm developed a new computerized prosthetic arm that would render its previous prosthetics obsolete. It decided to withhold the new computerized prosthetic arm from the market. This will allow the firm to: a. minimize its return on investment in developing each generation of the product. b. make its products backward compatible. c. avoid cannibalization of the sales of its current prosthetics. d. build a larger installed base for the new computerized prosthetic.

Q: When Pearl Love introduced its new range of body wash, consumers switched from using soaps, sold under the same brand, to its new body wash. As a result, the company experienced a sharp drop in its soap sales. This is best known as: a. cannibalization. b. the vampire effect. c. the halo effect. d. vaporware.

Q: A firm can signal its commitment to an industry by making substantial investments that would be difficult to reverse.