Entrepreneurship Exam #1 Study Guide

#63 Which of the following statements is true?

(B&C) ICEHOTEL was using effectual logic. AND A chef who is given a specific menu and has only to pick his or her favorite recipes for the items on the menu, shop for ingredients and cook the meal in their own well-equipped kitchens is an example of casual reasoning.

#50 Which of the following is the main purpose for writing a business plan?

(Both A and B) The plan helps the company develop a "Road Map" to follow, and the plan introduces potential investors and other stakeholders to the business opportunity.

# 18 According to the Global Entrepreneurship Monitor (GEM) 2013 survey, about ________ percent 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.

12.7%

#77 Which of the following selections is incorrect regarding a firm's "positioning" strategy?

After selecting a positioning strategy, the firms next step is to select a target market

#35 What is not a dimension of entrepreneurial intensity?

Ambitiousness

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

B. Moderate risk takers

#25 According to the textbook, the four characteristics of successful entrepreneurs are

C. Passion for the business, tenacity despite failure, product/customer focus, and execution intelligence

#39 Which of the following is not an example of a social force?

Changes in interest rates

#22 Apple is an established firm that encourages and emphasizes entrepreneurial behavior throughout its various divisions. According to the textbook, Apple practices ________ entrepreneurship.

Corporate entrepreneurship

#32 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.

Creative Destruction

#48 ______ business models are ones that do not fit the profile of standard business models, and they are impactful enough that they disrupt or change the way business is conducted in an industry

Disruptive Business Models

#31 According to the textbook, Dropbox, Facebook, and LinkedIn are examples of ________ firms.

Entrepreneurial

#41 The ability to notice things without engaging in deliberate search is called what?

Entrepreneurial Alertness

#27 Which of the following is not one of the five common myths about entrepreneurs?

Entrepreneurs are tenacious

#33 Entrepreneurship is the process of creating value by bringing together a unique package of resources to discover and __________ an opportunity

Exploit (?)

#1 (T/F) an entrepreneur is someone who creates a firm

False

#11 (T/F) Sonic drive in restaurants magnetic cups that adhere to the trunk of a car as it drives off, making it appear as the driver has forgotten their drink on top of the car is considered word-of-mouth marketing

False

#13 (T/F) Entrepreneurs should put pro forma financial statements in Appendix rather than the Financial Plan

False

#2 (T/F) Putting a grocery store on the corner where there wasn't previously a grocery store is not an example of innovation.

False

#23 (T/F) According to reliable statistics, 9 out of 10 businesses fail in their first few years of existence.

False

#5 (T/F) Fred Smith was using effectuation to create FedEx

False

#7 (T/F) Causal logic is particularly useful and effective in an uncertain market/industry

False

#8 (T/F) A chef who is not given a menu in advance, and is escorted to a strange kitchen where he or she has to explore for unspecified ingredients and cook a meal with them is an example of causal logic

False

#12 (T/F) The first part of a business plan is the Company Background

False, it is the Executive Summary

#9 (T/F) Guerrilla marketing is an conventional way of performing marketing activities

False, it is unconventional

#85 Which should be included in the appendices?

IDK find this one out??

#67 Which of the following statements is untrue about founding teams?

It is generally believed that new ventures started by an individual have an advantage over new ventures started by a team

#38 Which of the following is correct regarding opportunities and ideas?

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

#64 __________ refers to the fact that companies often falter because the people who start them aren't able to adjust quickly enough to their new roles and because the firm lacks a "track record" with outside buyers and suppliers

Liability of newness

#49 Southwest airlines is an example of a ________ disruptive business model.

Low-end disruptive business model

#75 The first step in selecting a target market is to study the industry in which the firm intends to compete and determine the different potential target markets in that industry. This process is called

Market segmentation

#42 Which of the following represents the correct order of the five stages of the creative process?

Preparation, incubation, insight, evaluation, elaboration

#84 ________ refers to the activities the firm takes to communicate the merits of its product to its target market.

Promotion

#29 Which of the following is not a personality trait or characteristic common among entrepreneurs?

Short attention span

#46 ______ business models Depict existing plans or recipes firms can use to determine how they will create, deliver, and capture value for their stakeholders

Standard Business Models

#30 According to Chapter 1, investors often cite the ________ as their most important criterion in the decision to fund new ventures

Strength of the entrepreneur

#66 Which of the following was not identified in the textbook as an element of a new venture team?

Suppliers and Vendors

#68 Which of the following statements is incorrect regarding founding teams?

Teams that are working together for the first time have an advantage over teams that have worked together before.

#26 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?

The ability to stick with a plan even when faced with evidence that changes are needed.

#52 Which of the following statements is incorrect about business plans?

The business plan should be written while the feasibility analysis is being completed.

#62 The suicide quadrant is usually referred to

The introduction of new products in new markets

#47 Which of the following statements about business models is incorrect?

There are two general types of business models

#45 In regard to business models, which of the following statements is incorrect?

There is a standard business model that most firms follow

#17 Which of the following is an accurate characterization of interest in entrepreneurship?

There is a tremendous amount of interest in entrepreneurship across the world

# 19 According to the Global Entrepreneurship Monitor (GEM) 2013 study, the majority of people in high-income countries are drawn to entrepreneurship ________.

To take advantage of an attractive opportunity

#10 (T/F) Someone dressed up like one of Chipotle's burritos on halloween is an example of guerrilla marketing

True

#14 (T/F) The Ideal length of a business plan without references and appendices should be between 25 and 35 pages

True

#15 (T/F) Joseph Schumpeter argued that entrepreneurs develop new products and technologies that over time make current technologies obsolete, and this process, which he called creative destruction, is good because it stimulates economic activity

True

#16 (T/F) A niche market is a place within a market segment that represents a narrow group of customers with similar interests

True

#4 (T/F) Leonard Shoen was using effectuation to create the business of U-Haul

True

#6 (T/F) Yngve Bergqvist used effectuation when creating the ICEHOTEL

True

#61 The greater the ____________, the more useful effectual reasoning is.

Uncertainty

#53 There are two primary audiences for a business plan:

a firms employees and investors and other external stakeholders

#71 A board of directors' three formal responsibilities are to...

appoint officers of the firm, declare dividends, oversee the affairs of the corporation

#20 What is the survival rate of entrepreneurs in the United States?

as high as 50% after four years

#36 An opportunity has the following four essential qualities:

attractive; timely; durable; and anchored in product, service, or business that creates or adds value to its buyer or end user

#24 The three primary reasons that people become entrepreneurs and start their own firms are to ________.

be their own boss, pursue their own ideas, and realize financial rewards

#79 A(n) ________ is the set of attributes-positive or negative-that people associate with a company

brand

#56 What is not an approach to discovering business opportunities?

combining completely different fields

#81 In ________-based pricing, the list price of an item is determined by adding a markup percentage to a product's cost.

cost

#34 Entrepreneurs are people who ____________

discover and exploit opportunities

#21 Google is a firm that is proactive, innovative, and risk-taking. From this description, we can most accurately conclude that google has a high level of ____________.

entrepreneurial intensity

#74 what is not a element of guerrilla marketing?

first mover advantage

#72 A board of directors is typically made up of __________ and _____________ directors.

inside and outside directors

#69 According to the textbook, prior entrepreneurial experience_______

is one of the most consistent predictors of future entrepreneurial performance

#51 A business plan is important for two reasons: it forces the founding team to systematically think through every aspect of their new venture and:

it communicates the merits of a new venture to outsiders, such as investors and bankers

#78 A product attribute map is used to help a firm determine whether its __________

its positioning strategy is appropriate

#80 the 4 Ps of marketing refer to a companys

marketing mix

#70 The process of building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to the firm is called ________

networking

#37 The term "window of opportunity," as discussed in Chapter 2, is a metaphor that describes the time period in which a firm can:

realistically enter a new market

#76 Which of the following is the correct sequence of events in regard to the process of selecting a target market and position strategy?

segmenting the market, selecting a target market, creating a unique positioning strategy

#40 The increasing number of social networks on the Internet is attributed to a jump in the number of people who are wanting to connect with one another online. The increasing number of social networks is an important:

social trend

#60 Effectual reasoning is based on the logic, "to the extent that we can __________ the future, ____________ it.

that we can predict the future, we can control it.

#65 The high failure rate among new ventures is due, in part, to the liability of newness, which refers to the fact that new companies often falter because ________.

the people who start the firms can't adjust quickly enough to their new roles and the firms lack a "track record" with outside buyers and sellers

#3 (T/F) A business opportunity is only a thought, impression, or notion

true

#82 In ______ pricing, the list price is determined by estimating what consumers are willing to pay for a product and then backing off a bit to provide a cushion

value-based

#83 According to the textbook, most experts recommend ________ pricing because it hinges on the perceived value of a product or service.

value-based

#73 What is not a type of guerrilla marketing?

word-of-mouth (?)