MGMT 350

________ 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 is accomplished by a small business when it secures outside investment?

It indicates a level of belief in the business and the owner.

________ is an estimate of what an identical asset would cost to be acquired and readied for service.

Replacement value

Researchers in the field of entrepreneurship and small business believe that ________ behavior is the most basic and important entrepreneurial behavior.

opportunity recognition

An imitative business that competes locally with others in the same industry is referred to as

parallel competition

During a feasibility study, the examination of customers you wish to serve and those who would show interest in your product is helpful. This step defines your ________

target market

For a small business that is just starting out, all strategy starts with ________

the owner

Value benefits are important because

they lead to higher prices.

The strategy for using the pilot test approach is:

to show potential partners that the idea can generate sales.

All entrepreneurs have at least four sets of resources: access to capital; their own skills and abilities;their own knowledge; and their network of friends and business associates.

1) True

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

1) True

There are two major classification systems that code industries: NAICS and SIC. @ Learning objecitve 07-01

1) True

A business model is a preliminary run of a business with the goal of assessing how well the overall approach works and what problems it might have.

2) False

A buyout refers to starting a business from scratch.

2) False

According to the Panel Study of Entrepreneurial Dynamics, the business idea and the decision to start a business were simultaneous for a majority of entrepreneurs.

2) False

Causal or predictive reasoning is a logical process in which one analyzes the resources available and restraints on the use of resources to create an attainable goal.

2) False

For the successor of a family business, ownership transfer is best accomplished after the death of the founder.

2) False

Market scale refers to the geography of the target market. @ Learning objective 07-02

2) False

The first step of the strategic planning process for small businesses is considering your customers and the benefits you want to offer them. @ Learning objective 07-01

2) False

According to the SCAMPER tool, which popular innovation strategy can be just as effective and much more likely in the real world than business opportunities that result from radical innovations?

Adapt

If Sarah were to buy an existing business, which of the following disadvantages would you point out?

Difficulty in determining the worth of the business.

Search and capture of new ideas that lead to business opportunities is called opportunity recognition.

False

Which of the following is the primary goal for performing due diligence?

Finding any inefficiencies, unnoticed opportunities, waste, and mismanagement

________ are rules of thumb that are commonly used to estimate firm value in relation to some easily observable characteristic of the business.

Heuristics

Which of the following is a cost benefit?

Organizational practice

Gabriel has a product idea of a device which he believes will help people manage their daily chores, hence making their lives easier. He is unsure if the device is actually a feasible product but shares the idea with his boss and coworkers anyway. Gabriel is positive his device will get a fair review. He has offered other ideas in the past and one was now a viable product for the company. Which of the four ideas for making a creative business culture best describes Gabriel's company?

Positively reinforce ideas.

Which of the following is true of niche markets?

They are specific and narrow.

19 In many franchises the franchiser oversees (or even manages) the selection of location, the construction of facilities, the acquisition and installation of necessary equipment, and the initial inventory with which to open business. Which of the following terms best represents this type of franchising?

Turnkey

Joe is planning a new mobile restaurant business. He wants to convert an antique bus into a sit-down restaurant with a service window allowing him to serve people within the bus and walk-ups who want to get their food and take it home. Joe is performing some research into his project and is looking at the overall business idea, the product/service, the industry and market, financial projections(profitability), and the plan for the future action. Joe is performing a(n) ________.

feasibility study

An overall strategic approach in which a firm patterns itself on other firms, with the exception of one or two key areas is referred to as _____

incremental innovation