Ch07

In the goal step of the strategic planning process, the key is to:

Bring together the decisions that underlie the business plan

_____ is a strategic action.

Acquiring a competitor

Which of the following types of value benefits is most likely to be offered by a product if it helps the community, a group, the environment, or the world?

Altruism

A type of life cycle growth stage marked by a very rapid increase in sales in a relatively short time is called the _____.

boom

A(n) _____ is the business term for the population of customers for a business owner's products or services.

market

Which of the following is a generic strategy that targets a portion of the market, called a segment or niche?

Focus strategy

_____ are classic strategies for businesses of all types and they include differentiation, cost, and focus.

Generic strategies

_____ refers to the size of the market, whereas _____ refers to the geographic range covered by the market.

Scale;scope

_____ is a type of life cycle stage following a boom in which there is a rapid decrease in the number of firms in an industry.

Shake-out

_____ is the idea and actions that explain how a firm will make its profits.

Strategy

_____ is the particular way a firm implements customer benefits that keeps the firm ahead of other firms in the market.

Competitive advantage

Which of the following is the second step of a small business' strategic planning process?

Considering the customers and the benefits to offer them

In the context of entry wedges, _____ occurs because government agencies, government-sponsored commercial contracts, and many big businesses have policies that provide for quotas for buying from small businesses.

Favored purchasing

Which of the following statements is not true of degree of similarity?

Imitation minus one degree of similarity is called incremental innovation.

_____ is the general name for the line of product or service being sold, or the firms in that line of business.

Industry

Which of the following statements about industry, industry dynamics, and industry lifecycle is true?

Industry refers not only to your product or service, but also to all your competitors selling that product or service.

Michael Porter identifies five different threats of competition for any business. Which of the following choices is not one of Michael Porter's five threats?

Investors

Which of the following is the advantage of knowing the magic number?

It helps in evaluating if the proposed business can deliver the desired return.

Which of the following statements is true regarding the entry wedge of supply shortage?

It occurs when a new product is in demand.

Which of the following is true of a blue ocean strategy?

It results in a new product or service.

As a firm gets more experience, it can often work with fewer mistakes and greater efficiencies, thereby lowering costs. This leads to the cost benefit of _____.

Learning

In an imitative strategy, an entrepreneur:

More or less what others are doing

Which of the following are the two major classification systems that code industries?

NAICS and SIC

Which of the following is a value benefit

NOT cost savings

Which of the following is a tactical action?

New distribution channels

A _____ is a narrowly defined segment of the population that is likely to share interests or concerns.

Niche market

Which of the following is a strategic action?

Not increase marketing efforts

Which of the following statements about Michael Porter's Five-Forces Model of Industry Competition is not true?

Not sub/alt five rivals are direct

Most small businesses are more _____ than _____.

Not(profit-directed;inno/I It) cost-directed

Which of the following is true of the introduction stage of a product?

Not(sales are almost always high 0

Amy plans to open a laundromat with a gym. She got the idea from the laundromat with a bar and game rooms, which she visits regularly. She wants to test her idea by starting out in a small space with the focus on the laundromat and a small space allocated for gym equipments. Amy's idea is an example of _____.

an incremental innovation

Retrenchment is:

an organizational life cycle stage in which established firms must find new approaches to improve the business.

The fourth step of a small business' strategic planning process involves:

determining the best strategic direction and strategy for the firm.

An opportunity that makes it possible for a new business to gain a foothold in a market is referred to as a(n) _____.

entry wedge

A perceptual map is:

graphic display which positions products according to their scores on important strategic dimensions.

The life cycle stage in which a product or service is being invented is known as the _____.

introduction stage

Imitation plus one degree of similarity results in:

patterning a business on existing firms.

Which of the following is true of the entry wedge of second sourcing?

provides a competitive pressure to ensure that suppliers keep providing the best service and prices.

The first step of the strategic planning process for a small business is:

reviewing and confirming the goals that define the firm.

Value benefits are important because:

they lead to higher prices.

A _____ displays characteristics related to the nature of a product or service itself.

value benefit

Gross profit is defined as:

what is left after deducting the cost of goods sold.

Which of the following is an advantage of picking customer-desired benefits that a business owner's competitors do not offer?

They make the firm stand out from the competition.