BA260 Midterm

Four steps of Market Validation

1.Market need 2.Product Desirability 3.Product Demand 4.Market Size

(Multiple choice) Which of the following is NOT one of the common myths about entrepreneurs? A)Entrepreneurs are tenacious B)Entrepreneurs are gambler. C)Entrepreneurs are motivated primarily by money. D)Entrepreneurs are young. E)Entrepreneurs are born not made.

Answer A Entrepreneurs are tenacious

Brokerage

Bring together buyers and sellers, charging a fee per transaction to one or another party

Austin launched a firm several years ago and has been particularly successful in introducing new products to the marketplace. One thing that he is particularly good at is translating his 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?

Execution intelligence

(True/False) According to the consensus of the research, people are genetically predisposed to be entrepreneurs.

False

(True/False) CVS's decision to stop selling cigarettes and all tobacco products in 2014 significantly decreased the firm's overall performance.

False

(True/False) Entrepreneurship is the process by which individuals pursue opportunities within the constraints of the resources they currently control.

False

(True/False) Market Need Validation is the process of validating your product or service is desirable and serves a need in the market, whereas Product/Service Desirability Validation is the process of validating the existence of the need or pain that you have assumed they have.

False

[True/False] Product/Service Desirability Validation is defined as the process of making sure that other people are willing to buy your product/service.

False

[True/False] SOM (Share of Market), often called Target Market, is the segment of the TAM targeted by your products and services which is within your geographical reach.

False

Premium

Offer basic services for free, charge for premium service.

Razor and blades

Offer the low-margin item below cost to encourage sales of the high-margin companion product.

Advertising based

Offers free content or services to customers and sells advertising to make money.

Bundling

Package related goods and services together into a single offering.

Obtaining feedback through interview from prospective customers and administering surveys are examples of _______________ research.

Primary

A lot of individual and team factors can impact a team's performance, specifically team creativity. Which of the following refers to "whether team members feel safe to be vulnerable in front of each other and to share ideas and thoughts without worrying about criticism"?

Psychological safety

Product to service

Rather than sell a product, sell the service the product performs

SAM

SERVICEABLE AVAILABLE MARKET −the segment of the TAM targeted by your products and services which is within your geographical reach

SOM

SHARE OF MARKET (TARGET MARKET)−the portion of SAM that you can capture

TAM

TOTAL AVAILABLE MARKET −total market demand for a product or service

Feasibility Analysis

The process of determining if a business idea is viable

(True/False) A pivot refers to a substantive change to one or more of 9 elements in Business Model Canvas components.

True

(True/False) Entrepreneurship is the process by which individuals pursue opportunities without regard to resources they currently control.

True

(True/False) The primary goal of social entrepreneurs is tackling the social issue and doing good for the society rather than making money.

True

(True/False) The temptation to ask friends and family members for your product/service feasibility test should be avoided because they are predisposed to give positive feedback.

True

[True/False] A pivot refers to a substantive change to one or more of the 9 elements in Business Model Canvas components.

True

Opportunity

a favorable set of circumstances that creates the need for a new product, service, or business

(Multiple choices) Which of the following is NOT a primary research data collection method? a. Industry reports b. Surveys c. Interviews d. Experiments

a. Industry reports

Switching costs

are the costs that a consumer incurs as a result of changing brands, suppliers or products.

(Multiple choices) Obtaining feedback through interview from prospective customers and administering surveys are examples of _______________ research. a. fundamental b. primary c. secondary d. derivative e. principal

b. primary

A ________ is a firm's plan or recipe for how it creates, delivers, and captures value.

business model

(Multiple choices) Which of the following is not one of the four areas of feasibility analysis? a. Product/service feasibility b. Financial feasibility c. Societal feasibility d. Industry/market feasibility

c. Societal feasibility

Brad Jones is in the process of opening an electronics supply company and is working on the portion of his business plan template that describes how he will deliver his products and services to his customers. The portion of the business plan template that Brad is working on is referred to as ___________.

channels

(Multiple choices) In order to understand if a business idea can be turned into a real business opportunity, one must analyze and understand if it __________ a. solves customers' problem or need. b. is financially attractive and durable. c. is carried forward by a motivated and competent team d. All of the above

d. All of the above

Which of the following is/are a question that is answered in a typical business model canvas? a. What are the most important costs in our business model? b. Which customer needs are we satisfying? c. Which key activities do partners perform? d. All of the above are the questions answered in business model canvas.

d. All of the above are the questions answered in business model canvas.

(Multiple choice) Which of the following is not one of the common myths about entrepreneurs? a. Entrepreneurs are gambler b. Entrepreneurs are motivated primarily by money. c. Entrepreneurs are born not made. d. Entrepreneurs are tenacious.

d. Entrepreneurs are tenacious.

Product/service feasibility

is an assessment of the overall appeal of the product or service being proposed.

Industry/market feasibility

is an assessment of the overall attractiveness of the industry and the target market for the proposed business.

Creativity

is the process of generating a novel or useful idea.

Entrepreneurship

management and leadership style that involves pursuing opportunity without regard to the resources currently controlled

Advertising, commissions, download fees, licensing, and product sale are examples of ___________.

revenue streams

Window of opportunity

the time period in which a firm can realistically enter a new market.

(Multiple choices) Which of the following is correct regarding opportunities and ideas? a. An opportunity and an idea are essentially the same thing. b. An idea almost always meets the criteria of an opportunity. c. An opportunity is a thought, an impression, or a notion. d. It's important to discern whether a particular idea meets the criteria for an opportunity.

Answer d It's important to discern whether a particular idea meets the criteria for an opportunity.

[Multiple choices] What is the correct order of conducting Market Validation? a.Market size - Product desirability - Product demand - Market need b.Product desirability - Product demand - Market need - Market size c.Market need - Market size - Product desirability - Product demand d.Market need - Product desirability - Product demand - Market size

Answer d Market need - Product desirability - Product demand - Market size

Which of the following is NOT a correct statement about the interview for market need validation? a.You would always want to have honest opinions from your interviewees. b.It is better to use open-ended questions. c.It is not a good idea to ask challenges or problems that your potential customers had in the past. d.The objective of market need validation is to understand the differences between your hypotheses and customers' needs.

Answer: c It is not a good idea to ask challenges or problems that your potential customers had in the past.

(Multiple choices) Which of the following is NOT a correct statement about Uber's Business Canvas Model? a.Map/GPS providers are one of key partners. b.Two main customer segments are drivers and passengers. c.One of key value propositions for passengers is providing additional source of income. d.Review, rating and feedback systems play an important role in getting more participants joining the Uber service.

Answer: c One of key value propositions for passengers is providing additional source of income.

(Multiple choices) Which of the following firms has a brokerage revenue model? a.Dell b.Dropbox c.Priceline.com d.Google

Answer: c Priceline.com

(Multiple choice) Which of the following revenue structure is not matched with a correct description of what it is? a.Premium: Basic service is offered free and premium service is charged b.Bundling: Package related goods and services together into a single offering c.Razor and blades: Offer free items to increase sales of high-margin products d.Subscription: A subscription fee is charged for access to a service.

Answer: c Razor and blades: Offer free items to increase sales of high-margin products

(Multiple choices) In order to understand if a business idea can be turned into a real business opportunity, one must analyze and understand if it a. ... has a long lasting of it potential b.takes advantage of window of opportunity and... it's timely c.is carried forward by a motivated and competent team d.Alloftheabove

Answer: d All of the above

[Multiple choices] Which of the following is NOT true about survey design? A survey should: a.Be clear, simple, and brief. b.Have balanced answer choices. c.Avoid double-barreled questions. d.Include specialized terms.

Answer: d Include specialized terms.

[Multiple choices] Is the market growing, stable or declining? Who are your competitors and what market share has each of them? These are the types of questions asked during the ________ validation. 1) Market need validation 2) Product/service desirability 3) Product/service demand 4) Market size

Answer: d Market size

[Multiple choices] Which of the following points to the problem of the question that asks "How satisfied are you with your pay and job conditions?" a.Use of vague qualifiers b.Use of leading question c.Use of Jargon d.Use of double-barreled question

Answer: d Use of double-barreled question

(Multiple choices) Which of the following questions is related to the value proposition? a.Who are our most important customers? b.How much is a customer willing to pay for the service or product we offer? c.Which key resources we are acquiring from partners? d.What is the challenge we are trying to help our customer solve?

Answer: d What is the challenge we are trying to help our customer solve?

Subscription/Membership

Charge a subscription fee to gain access to a service.

(True/False) Switching costs exclusively refer to financial costs that consumers have to absorb when switching from an old to a new product.

False

(True/False) Switching costs exclusively refer to financial costs that consumers have to absorb when switching from an old to a new product.

False

(True/False) The use of both primary and secondary approaches to feasibility analysis is likely to give a more realistic and more complete market validation.

True

[True/False] Instead of owning a share of the company's stock that fluctuates daily, investors with royalty are guaranteed a monthly payment based on the company's sales. This benefit has made royalties common investments in many industries.

True

[True/False] Market Need Validation is the process of validating the existence of the need or pain that you have assumed they have, whereas Product/Service Desirability Validation is the process of validating your product or service is desirable and serves a need in the market.

True

[True/False] One of the reasons IluminAID's pitch was very effective was because the founders immediately drew in the audience by describing the problem they were addressing and highlighting well in a convincing way that their product is addressing the real market demand.

True

[True/False] The temptation to ask friends and family members for your product/service feasibility test should be avoided because they are predisposed to give positive feedback.

True

[True/False] The use of both primary and secondary approaches to feasibility analysis is likely to give a more realistic and more complete market validation.

True

(Multiple choices) Which of the following revenue structure is NOT matched with a correct description of what it is? a.Razor and blades: Rather than sell a product, sell the service the product performs b.Premium: Basic service is offered free and premium service is charged c.Bundling: Package related goods and services together into a single offering d.Subscription: A subscription fee is charged for access to a service.

a.Razor and blades: Rather than sell a product, sell the service the product performs

(Multiple choice) Alex launched a firm several years ago and has been particularly successful in introducing new products to the marketplace. One thing that he is particularly good at is translating his 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. A passion for the business b. Execution intelligence c. Tenacity despite failure d. Product/market focus

b. Execution intelligence

Multiple choices) Brad Jones is in the process of opening an electronics supply company and is working on the portion of his business plan template that describes how he will deliver his products and services to his customers. The portion of the business plan template that Brad is working on is referred to as a .network b. channels c. linkages d. grids

b. channels

(Multiple choices) Which of the following firms has a premium revenue model? a.Dell b.Dropbox c.Priceline.com d.Google

b.Dropbox

(Multiple choices) A ________ is a firm's plan or recipe for how it creates, delivers, and captures value. a.commercialization plan b.business model c.launch plan d.tactical model

b.business model

(Multiple choices) A team of entrepreneurs seeking to introduce a novel on-line shopping platform, asks potential customers: "What challenges do you most frequently encounter when purchasing grocery items online?" The entrepreneurial team is likely conducting a: a. Organizational Feasibility Analysis b. Financial Feasibility Analysis c. Market need validation that would justify the entrepreneurs' development of their novel, potentially better on-line platform d. Product desirability validation pertaining to the customers' desire to use the entrepreneurs' novel on-line platform for grocery shopping

c. Market need validation that would justify the entrepreneurs' development of their novel, potentially better on-line platform

(Multiple choices) Which of the following statements is correct regarding opportunities and ideas? a. An opportunity and an idea are essentially the same thing. b. An idea almost always meets the criteria of an opportunity. c. An opportunity is a thought, an impression, or a notion. d. None of the above.

d. None of the above.

Which of the following choices is the BEST definition of a channel? a. A statement regarding a customer's specific demands b. A specific service or product from a large portfolio c. A short list of the partnerships that are essential for a business's operation. d. The method or pathway used to reach a customer

d. The method or pathway used to reach a customer

(Multiple choices) Which of the following questions is related to the value proposition? a. Who are our most important customers? b. How much is a customer willing to pay for the service or product we offer? c. Which key resources we are acquiring from partners? d. What value do we deliver to the customer?

d. What value do we deliver to the customer?

Business model

describes the rationale of how a company creates, delivers, and captures value

Brad Johnson is starting an upscale men's clothing store in a mall near Seattle. He wants to open his store during the time period in which a business like his can realistically enter the new market. Brad is trying to open his business while the [fill in the blank] is open

window of opportunity