Ch8 - Entrepreneurial Strategy & Competitive Dynamics

Which of the following is not a primary source of financing for entrepreneurial start-ups? A. investments by family and friends B. public equity C. private investors D. personal savings

B

Running Press launched the Miniature Editions line of books in 1993. Today it has sold over 20 million copies. Which of the following most closely represents their strategy? A. differentiation B. overall cost leadership C. focus D. combination

C

Smell-O-Vision designed an invention to pump odors into movie theatres. It flopped, in spite of its innovativeness. What kind of new entry strategy was the company using to penetrate the market? A. imitative B. adaptive C. pioneering D. differentiated

C

Strategic competitive actions include all of the following except A. new product introductions. B. mergers and alliances. C. product and service enhancements. D. changing production capacity.

C

The Wall Street Journal and The New York Times have seen the intensity of their rivalry increase. One factor driving this is that The Wall Street Journal has moved from financial news reporting to general national and global news reporting and finally, to adding local New York news. The rivalry of these two news providers has increased due to A. increased dynamic capabilities. B. erosion of first mover advantages. C. increased market commonality. D. the choice of tactical over strategic actions.

C

The majority of entrepreneurial start-ups are financed through monies from A. bank financing. B. SBA loans. C. personal savings and the contributions of family and friends. D. venture-capital financing.

C

The new entry strategy that a firm chooses is dependent upon the ______________ and the ______________ of the new business concept. A. riskiness; cost B. riskiness; potential sales C. riskiness; innovativeness D. idea; innovativeness

C

The process of identifying, selecting, and developing new venture opportunities is known as A. innovativeness. B. bootstrapping. C. opportunity recognition. D. brainstorming.

C

When GM offers discounts and incentives, rivals Ford and Chrysler cannot afford to ignore the challenge and quickly follow suit. These arguments are an example of A. a strategy of forbearance. B. a strategy of co-opetition. C. actor reputation. D. competitor resources.

C

When any two firms have both a high degree of market commonality and highly similar resources, a ______________ threat is present. A. weaker competitive B. successful marketing C. stronger competitive D. stronger marketing

C

Opportunities can be found through a structured search process. The example of Ancient Ales with their innovative line of craft beers demonstrates which of the following types of structured search? A. Identify frustrations with current products or processes. B. Talk to people who know including suppliers, customers, frontline employees. C. Borrow ideas from other markets. D. Find historical ideas and re-purpose them.

D

Tom Monahan, a business creativity coach, says that every new idea is merely a spin of an old idea. A company that enters the market by offering a product or service that is somewhat new and sufficiently different in order to create value for customers by capitalizing on current trends is using which new entry strategy? A. imitative B. pioneering C. differentiated D. adaptive

D

Unilever has taken a dominant position (65 percent market share) in the Vietnamese laundry detergent market by employing an investment and marketing campaign that decimated the market position of the local, incumbent competitors. According to the Stalk and Lachenauer book, this is an example of ________________ strategy. A. plagiarize with pride B. deceive the competition C. raise competitor costs D. unleash massive and overwhelming force

D

Which of the following is not a common source of new business opportunities? A. current or past work experiences B. suggestions by family or friends C. chance event D. future work

D

Which of the following is not a factor that makes it more difficult for new ventures to be successful as differentiators? A. The strategy is thought to be expensive to put into action. B. Establishing a brand, important to a differentiation strategy, is thought to be expensive. C. Superior innovation is often very costly. D. Customer service is often costly, but it does not affect a differentiation strategy.

D

Which of the following is the most important resource for a start-up activity? A. social recognition B. land C. personnel D. money

D

Which of the following statements about venture capital is not true? A. Entrepreneurs raise venture capital by selling shares of ownership in their business. B. Venture capital groups can often provide helpful management advice. C. Venture capital is used to finance rapid growth or large capital expenditures. D. Venture capital is a form of public equity financing.

D

Which of the following terms is used to refer to opportunities that are practical and physically possible? A. durable B. valuable C. sustainable D. achievable

D

Competitors with similar offers find that a new entrant is threatening because A. nearly all market need is already being met. B. the new entrant might increase prices. C. the new entrant offers the same product. D. the new entrant is a pioneer.

A

Intense rivalry involving actions and responses among similar competitors vying for the same customers in a marketplace is known as A. competitive dynamics. B. resource similarity. C. threat of substitutes. D. pioneering new entry.

A

New ventures may find it difficult to use differentiation strategies successfully because they lack _____________ and __________. A. sufficient funding; superior innovation B. competitors; superior technology C. sufficient funding; qualified entrepreneurs D. innovative ideas; potential customers

A

When an industry is mature, a(n) ______________ strategy is considered to be one of the most effective approaches for a new entrant. A. focus B. differentiation C. overall low-cost D. small business

A

Which of the following is NOT one of the characteristics of an entrepreneurial opportunity? A. affordable B. attractive C. achievable D. value creating

A

Which of the following is NOT one of the three characteristics of entrepreneurial leadership mentioned by the text? A. clarifying job responsibilities B. dedication and drive C. commitment to excellence D. vision

A

______________ provide(s) a key avenue for growth for many young and small firms through partnering to obtain resources and to expand into new markets. A. Strategic alliances B. Funding C. Banking D. Research and development

A

A firm is considering a large price cut on its leading product as a way to gain market share. One executive strongly disagrees with the price cut. He observes that they are in the same marketplace as their rivals and do not have any competitive advantages in their cost structure. If they cut prices, their competitors will likely do the same. The end result is that everyone will make less money. These arguments are an example of a A. strategy of co-opetition. B. strategy of forbearance. C. hardball strategy. D. weakness strategy.

B

According to the text, for an entrepreneurial start-up to be successful, three ingredients are critical. What are they? A. good ideas, a team of investors, and business plan B. a viable opportunity, available resources, and qualified and motivated founding team C. an opportunity, a marketing plan, and office space D. management, marketing, and money

B

According to the text, new ventures launched by entrepreneurial teams are more likely to be successful than ventures launched by A. established corporations. B. Lone wolf entrepreneurs. C. bootstraps. D. individual investors.

B

According to the text, which of the following does not make it difficult for entrepreneurial firms to effectively pursue a strategy of differentiation? A. Differentiation strategies are often expensive to enact. B. Incumbent firms are constantly seeking opportunities to specialize in market niches. C. It maybe difficult for a young firm to establish a strong brand identity. D. Implementing superior new technologies may be challenging for entrepreneurial firms.

B

BCG authors Stalk and Lachenauer published a book in which they listed competitive strategy for winning against incumbent rivals. Which of the following is not one of their suggested strategies? A. devastate profit sanctuaries of rivals B. lower-competitor costs C. unleash massive and overwhelming force D. plagiarize with pride and deceive the competition

B

One of the ways entrepreneurs achieve success is by using resources more efficiently. This is an example of how entrepreneurs use a(n) ______________ strategy. A. imitative B. low-cost leader C. differentiation D. combination

B

Private individuals who provide seed capital to young ventures are known as A. gazelles. B. angels. C. cash cows. D. rising stars.

B

Seeking products or services that have been successful in one market and introducing the same basic product or service in another segment of the market is referred to as _____________ new entry. A. adaptive B. imitative C. proactive D. pioneering

B

Southwest Airlines began its no frills, no meals strategy in the late 1960s as a direct assault on the major carriers of the day. What type of competitive action does this represent? A. A strategic action because it includes a refinement of an existing strategy. B. A tactical action because it is a refinement of an existing strategy. C. A strategic action because it was a breakthrough innovative offer. D. A guerilla offensive because it is fast and will surprise its rivals.

B

Square provides a means for small businesses to process credit and debit card sales without signing up for a traditional credit card arrangement of monthly fees and minimum charges. It used which new entry strategy to enter the market initially? A. pioneering B. imitative C. adaptive D. differentiated

B

TOMS Shoes generates interest in its products without a large advertising budget. It uses a Facebook page to create buzz. This is an example of a A. strategic action. B. tactical action. C. focused advantage. D. differentiated focus.

B

The U.S. Small Business Administration supports small business through all of the following except A. government contracting. B. investing venture capital. C. underwriting loans. D. training and counseling.

B

The best example of a tactical action that a company might use in response to a competitive attack is to A. acquire the competitor. B. offer priced is counts and rebates. C. expand in to new geographical areas. D. target the markets of the rival.

B

The first personal computer revolutionized computing and how business is conducted. It was using a(n) ______________ entry strategy. A. imitative B. pioneering C. adaptive D. creative

B

Tuft and Needle makes mattresses, according to Strategy Spotlight 8.5 in the textbook. Which generic strategy most closely represents theirs? A. differentiation B. overall cost leadership C. focus D. combination

B

Vision is an important element of entrepreneurial leadership because A. a vision statement is part of the documentation used to obtain venture financing. B. the entrepreneur has to envision realities that do not yet exist. C. organizations cannot function without a detailed and operational vision. D. banking institutions require it.

B

When a company chooses to maintain low-price dominance, it is using which tactical action? A. product and service enhancements B. price cutting C. increased marketing efforts D. changing production capacity

B

When a company chooses to use guerilla marketing, it is using a ________________ competitive action. A. strategic B. tactical C. focusedadvantage D. differentiated

B

When an opportunity is attractive long enough for it to be successfully developed and deployed, it is said to be A. value creating. B. durable. C. achievable. D. affordable.

B

When launching a new venture, finding a way to begin doing business must ___________ generate cash flow, build credibility, attract good employees, and overcome the liability of newness. A. slowly B. quickly C. steadily D. painlessly

B

A small firm may be unable to mount a serious attack due to lack of resources. As a result, it is more likely to react to ______ actions such as incentive pricing or enhanced service offerings, because they are less costly to attack than large-scale strategic actions. A. forbearance B. co-opetition C. tactical D. strategic

C

According to a study by the Kaufmann Foundation, which of the following is the largest source of funding for businesses that have been operating at least five years? A. public financing B. venture capital C. loans D. angel financing

C

Aircraft makers Boeing and Airbus have a high degree of ______________ because they make very similar products and have many buyers in common. A. dynamic capabilities B. first mover advantages C. market commonality D. equity funding

C

Amazon is an example of a company that used the differentiation strategy to enter the market. The differentiation features included A. minimal customer service. B. traditional back office logistics. C. exceptional customer service. D. traditional delivery logistics.

C

In competitive dynamics, new entrants may be force to change their strategies or develop new ones to _______ competitive challenges by _____________. A. overcome;othernewrivals B. succumb; potential rivals C. survive; incumbent D. survive; former rivals

C

Which of the below best describes the competitive tendencies of small firms? A. Small firms tend to signal their competitive actions long before they launch those actions, because they lack legitimacy in the marketplace. B. Small firms typically have more resources available as they undertake competitive attacks than do large firms. C. Small firms are more nimble and can respond quickly to competitive attacks. D. Small firms are more nimble and cannot respond quickly to competitive attacks.

C

Which of the following is not a factor that affects how a competitor will respond to a competitive attack? A. how dependent the competitor is on that industry or particular market segment B. the degree of market power and reputation of the company that initiated the attack C. the stock market reaction to the initial competitive attack D. the resources which are available for a firm to respond

C

Which of the following is not one of the reasons a company might launch new competitive actions? A. to obtain first-mover advantages B. to improve market position C. to find new sources of raw materials D. to capitalize on growing demand

C

Which of the following refers to a situation where a company has a high concentration of its business in a particular industry market? A. competitor resources B. resource similarity C. market dependence D. actor reputation

C

Generally speaking, the opportunity recognition process consists of two phases of activity. They are ______________ and _____________. A. global search; recycling profits B. value creation; affordability C. globalsearch;valuation D. discovery; evaluation

D

In 2005, Plum Organics entered the market with organic baby food and snack foods for children. It now has over 20 products and is listed at number 63 on the Inc. 500 list of fastest growing private companies. It used which new entry strategy in 2005? A. imitative B. pioneering C. differentiated D. adaptive

D

According to the textbook, which of the following is NOT a common new entry strategy? A. imitative new entry B. adaptive new entry C. pioneering new entry D. proactive new entry

D

All of the following are examples of strategic actions a firm might take except A. partner with competitors to reduce competition. B. expand in to neglected markets. C. tie up raw materials sources. D. change product packaging.

D

Entrepreneurial firms that pursue a low-cost leadership strategy use all of the following to achieve lower costs except A. cost-saving technology such as the Internet. B. simple organizational structures. C. rapid decision making. D. extensive investment in order to achieve economies of scale.

D