MGT 410 Test 1

If Birchbox has​ 400,000 subscribers and loses​ 40,000 each​ month, its churn rate is​ _____.

10 percent

In estimating projected rate of​ return, an individual who is thinking about leaving a​ $150,000-per-year job to start a new firm requires a higher rate of return than the person thinking of leaving a​ $______-per-year job.

100,000

​____ in the marketplace are a source of business opportunities.

Gaps

Which one of the following is NOT a social trend that is currently affecting how individuals behave and set up​ priorities?

Passage of the affordable care act (Obamacare)

One popular quote says​ "Every ___ is a brilliantly disguised​ opportunity."

Problem

Which of the following motivations to launch​ one's own firm often fails to live up to its​ hype?

Pursing financial rewards

​_____ are the inputs a firm uses to​ produce, sell,​ distribute, and service a product or service.

Resources

A dry cleaning business is an example of​ a(n) ______ firm.

Salary-subsitute

Making a difference in​ people's lives is the primary motivator behind many​ _______ enterprises.

Social

Which of the following is NOT a barrier to​ entry?

Stakeholder holdout

The number of seniors​ (those 50 years of age and​ older) starting businesses is​ ______.

Substantial

Threat of​ ____ integration increases the bargaining power of buyers.

backward

A​ _____ is a condition that creates a disincentive for a new firm to enter an industry.

barrier to entry

A​ company's _______ is what causes consumers to pick that​ company's products over​ another's

basis of differentiation

The three primary reasons that people become entrepreneurs and start their own firms are to pursue their own​ ideas, realize financial​ rewards, and​ ________

be their own boss

Matt Cooper of Soggy Bottom Canoe and Kayak Rental refers to concept testing as​ _____ testing.

beta

A​ ____ is a panel of experts asked by a​ firm's management to provide counsel and advice on an ongoing basis.

board of advisors

​A(n) _____ is a panel of individuals elected by a​ corporation's shareholders to oversee the management of the firm.

board of directors

A popular technique used in classrooms to teach brainstorming is called the​ ______ report.

bug

The ability of firms in some industries to benefit from an increasing ability to outsource manufacturing or service functions to​ lower-cost foreign labor markets is an example of​ a(n) _____ trend.

business

A​ ___ is a written​ narrative, typically between 25 and 35 pages​ long, that describes what a new business intends to accomplish and how it intends to accomplish it.

business plan

A​ ____ is a written document that describes all the aspects of a business venture in a concise manner.

business plan

A​ _____ is primarily focused on planning and selling.

business plan

Problems can be recognized by observing the​ ______ that people encounter in their daily lives.

challenges

​_____ refers to the number of subscribers that a​ subscription-based business loses each month.

chum

The disadvantage of the subscription business model is​ _____.

churn

It is wrong to assume that a business model is a home run regardless of​ ________.

circumstances

It is useful for a new venture to think about its position at both the​ _____ level and the product or service level.

company

A preliminary description of a product or service idea is called​ a(n) ______.

concept statement

A tool that is particularly useful in soliciting feedback and advice from prospective customers is a​ _______.

concept test

If a product sells for​ $100 and the cost of goods sold is​ $40, the​ $60 (the difference between the​ two) is called​ ______.

contribution margin

A​ firm's business model represents the​ _____ aspects of its business.

core

​A(n) _____ strategy describes how the firm plans to compete relative to its competitors.

core

​A(n) _____ is a specific factor or capability that supports a​ firm's business model and sets it apart from its rivals.

core competency

Netflix with regard to DVDs is an example of​ _______.

creative destruction

Small firms that practice​ ______ are called​ "innovators" or​ "agents of​ change."

creative destruction

Intuit​ (which makes Quicken and TurboTax​ products) routinely sends teams of testers to the homes and businesses of its users to see how its products are working and to see insights for new product ideas. Intuit uses​ ________ research.

day-in-the-life

A leadership strategy in which a firm tries to become the dominant player in the industry is a strategy that works in​ ____ industries.

declining

The renting of DVDs and video games by mail is an example of​ a(n) ____ industry.

declining

Which of the following is NOT a category of key assets that a firm can own to enable its business model to​ work?

disruptive

​Dell's director-to-consumer computer sales model is an example of​ a(n) _______ business model.

disruptive

The five forces model helps one understand the​ ___ of an industry.

dynamics

​A(n) _____ industry is one in which standard operating procedures have yet to be developed.

emerging

​Microsoft's power as a supplier of computer operating systems is​ ____ by the threat that it might enter the PC industry if PC makers balk too much at the cost of its software.

enhanced

​LinkedIn, Dropbox, and Facebook are examples of​ ____ firms.

entrepreneurial

There are some who think that entrepreneurs have a​ "sixth sense" that allows them to see opportunities that others miss. This sixth sense is called​ _______.

entrepreneurial alertness

Which of the following is NOT a key area in feasibility​ analysis?

entrepreneurial feasibility

Focus groups typically consist of a group of people who are​ _____ with a topic.

familiar

First Screen is a template entrepreneurial firms use to complete a​ _______.

feasibility analysis

Which of the following is NOT a primary element of core​ strategy?

finances

​A(n) _____ advantage is a​ sometimes-insurmountable advantage gained by the first company to establish a significant position in a new market.

first-mover

A​ firm's _____ costs are costs the company incurs whether it sells something or not.

fixed

A geographic​ roll-out opportunity is available in​ a(n) ______ industry.

fragmented

To know about the educational toys​ market, you spend a week volunteering at a day care center and watch how children interact with toys. You are doing​ ____ research.

gumshoe

Industries with​ ___ fixed costs have a high degree of intensity of rivalry.

high

Businesses offering close substitute products are called​ ____ competitors.

indirect

A group of firms producing a similar product or service are​ a(n) ______.

industry

The five forces model looks at forces that determine​ _____ profitability.

industry

The proper time to determine a​ company's business model is following the​ _______ of the business idea and prior to fleshing out the operational details of the firm.

initial validation

Established firms often resist​ ______.

innovation

Patents are an example of​ _____ assets.

intellectual

When a firm has invented a new product or is introducing a new business​ process, as part of the resource sufficiency issue it has to obtain​ _____.

intellectual property protection

An example of an idea bank would be a​ password-protected location on a​ firm's _____ that is available only to qualified employees.

intranet

Feasibility analysis is​ _____ in nature.

investigative

Which one of the following is NOT an essential quality of an​ opportunity?

it is profitable

A​ firm's business model is its plan or recipe for how it​ creates, delivers, and captures value for​ ______.

its stakeholders

The three important elements of a​ firm's business model are its target​ market, its basis for​ differentiation, and its​ ______.

key assets

​"Click here to buy a Maui​ vacation" is an example of​ a(n) _______.

landing page

At the company​ level, a​ firm's ____ determines how the company is situated relative to its competitors.

launch

A bed and breakfast is an example of​ a(n) ____ firm.

lifestyle

​Weak-tie relationships are not verylikely to be between​ _______ individuals.

like-minded

In​ general, industries are more attractive when the threat of substitutes is​ ___.

low

Southwest​ Airlines' point-to-point,​ no-frills business model is an example of​ ______ market disruption.

low-end

​____ disruption exploits the​ "performance oversupply" issue.

low-end

​_____ disruption is possible when the firms in an industry continue to improve products or services to the point where they are actually better than a sizeable portion of their clientele needs or desires.

low-end

The​ _____ breaks the industry into segments and zeroes in on the specific segment​ (or target​ market) to which the firm will try to appeal.

market analysis

Psychographic variables​ (personality, lifestyle,​ values) can be used in​ ________.

market segmentation

When Tish Ciravolo started Daisy Rock​ Guitar, as a company that makes guitars just for​ women, she used​ ________ to get a competitive advantage.

market segmentation

The consumer milk industry is characterized by slow​ growth, repeat​ (rather than​ new) customers, and limited product innovation. This industry is an example of​ a(n) ______ industry.

mature

A statement such as​ "Connecting the world through​ games" is an example of an​ organization's ______.

mission

A​ business's ____ describes why it exists and what its business model is supposed to accomplish.

mission

The greater the importance of an item is to a​ buyer, the​ _____ the buyer will be to the price.

more sensitive

When a firm varies its product or service offerings to meet the demands of the local​ market, it is pursuing a​ _____ strategy.

multi domestic

Those who identified their ideas through social contacts are called​ _____ entrepreneurs.

network

Because entrepreneurs are trying something​ __, the possibility of failure exists.

new

​Google's AdWords program is an example of​ _________.

new market disruption

A​ _____ is the group of​ founders, key​ employees, and advisers that either manage or help manage a new business in its​ start-up years.

new-venture team

The number one rule for a brainstorming session is that​ __________.

no criticism is allowed

When there are​ _____ suppliers to provide a critical product to a large number of​ buyers, the suppliers have an advantage.

only a few

A​ firm's _____ is an analysis of its fixed versus variable costs.

operating leverage

​A(n) _____ business plan is intended primarily for an internal audience.

operational

Entrepreneurship is defined as the process by which individuals pursue​ _______ without regard to resources they currently control for the purpose of exploiting future goods and services.

opportunities

​A(n) ______ chart is a graphic representation of how authority and responsibility are distributed within the company.

organization

When projecting​ start-up expenses, it is better to​ ______.

overestimate

Opportunity recognition refers to the process of​ _____ the possibility of a profitable new business or a new product or service.

perceiving

Observing trends can lead to spotting opportunities. Which of the following is NOT an area of environmental trends that suggest business or product opportunity​ gaps?

personnel changes

When you do research by conducting focus​ groups, you are conducting​ _____ research.

primary

If a proposed new venture moves beyond the feasibility analysis​ stage, it will need to complete​ ____ financial statements that demonstrate the​ firm's financial viability for the first​ 1-3 years of its existence.

pro forma

Which of the following slides is NOT a part of the 12 PowerPoint slides to include in an investor​ presentation?

product prototype

​A(n) _____ is the first physical manifestation of a new product.

product prototype

​"Pro forma" is another term for​ _____.

projected

Return on assets is an example of​ a(n) _____.

ratio

Most business plan writers interpret or make sense of a​ firm's historical or pro forma financial statements through​ _______.

ratio analysis

Examining the skilled labor pool in the community where the​ start-up is to be launched is part of determining the​ ______.

resource sufficiency

​_____ firms are those that basically provide their owners a level of income similar to what they would be able to earn in a conventional job.

salary-substitute

When the Census Bureau is the source of your​ data, you are conducting​ ____ research.

secondary

A business plan is a​ ____ document.

selling

Most restaurants have​ a(n) ____ revenue stream.

single

Economic​ trends, ____​ trends, technological​ advances, and political and regulatory changes are the most important environmental trends for entrepreneurs to study.

social

What people think is​ "in" is part of the​ ______ forces where one can spot opportunities.

social

Ties between coworkers are examples of​ _______ relationships.

strong-tie

​_____ relationships tend to reinforce insights and ideas the individuals already have.

strong-tie

​A(n) _____ business plan works best for companies that are very early in their development.

summary

In the​ DVD-by-mail business,​ Netflix's core competency was in​ ________.

supply chain management

A​ (n) ____ is a phrase that a business plans to use to reinforce its position in the marketplace.

tagline

​Wello's "Bye, Bye Gym Hello​ Convenience" is an example of​ a(n) _____.

tagline

A​ firm's _____ market is the limited portion of the industry that it goes after or to which it wants to appeal.

target

​A(n) ____ market is a place within a larger market segment that represents a narrower group of customers with similar interests.

target

Which of the following is NOT a typical critical nonfinancial resource for a​ start-up?

the age of the founders

Investors are​ ______ audience for a business plan.

the second

The majority of individuals who start companies are in their​ _______.

thirties and forties.

Which of the following is NOT a primary factor that determines the nature and intensity of the rivalry among existing firms in an​ industry?

threat of forward integration

​Usually, a(n)​ ______ event prompts an individual to become an entrepreneur.

triggering

Once the market for a new product is​ established, its​ _________ opens.

window of opportunity

That entrepreneurs are born and not made is​ ______.

a myth

The number one characteristic shared by successful entrepreneurs is​ __________.

a passion for their business

SafetyWeb is an online business that has created a​ Web-based service that helps parents protect their​ children's online reputation. SafetyWeb found its business opportunity in​ ______.

a problem

Defining the market size too broadly is​ ________ in a business plan.

an example of a red flag

​Day-in-the-life research uses​ ______.

anthropology

Any material that does not easily fit into the body of the business plan should​ ______.

appear in an appendix

After the concept statement is​ developed, it should be shown to at least​ ____ people who are familiar with the industry that the firm plans to enter.

20

A business plan should be close to​ ____ pages in length.

25

Research results over time consistently suggest that somewhere between​ ________ percent of those who start businesses got their ideas through social contacts.

40 and 50

To test resource​ sufficiency, a firm should list the​ _____ most critical nonfinancial resources that it will need to move its business idea forward and determine whether those resources are available.

6-12

According to a​ study, there were​ ____ women-owned businesses in the United States in 2013.

8.6 million

Which of the following is NOT a force as per the five forces​ model?

Bargaining power of stockholders

Once a firm decides to enter an industry and chooses a market in which to​ compete, it must gain an understanding of its​ _____ environment.

Competitive

Established firms with an orientation toward acting entrepreneurially practice​ ___ entrepreneurship.

Corporate

There are two general categories of business​ models: standard business models and​ _____ business models.

Disruptive

​_____ refers to the process investors go through after they tentatively commit to an investment.

Due diligence

The ability to fashion a solid idea into a viable business is called​ ______.

Execution intelligence

Which of the following is NOT a characteristic of an attractive​ industry?

Is concentrated rather than fragmented.

The concept of creative destruction was coined by​ ________.

Joseph Schumpeter

In​ brainstorming, ____ means using one idea as a means of jumping forward quickly to other ideas.

Leapfrogging

The adequacy of returns​ (expected from a startdash-​up) depends on the​ _____ the individuals involved have.

alternatives

Entrepreneur are usually ____ risk takers

Moderate

​Usually, focus groups are conducted by trained​ ______.

Moderators

Which of the following is NOT an example of creative​ destruction?

New promotion strategies

An idea may or may not meet the criteria of​ a(n) _______.

Opportunity

Which of the following is NOT a part of a concept​ statement?

The financial prospects of the business