Bus 100 Chapter 3 - 3.6 quiz
Dale has been working in IT for a large company for the past 10 years and has often thought about starting his own business dash he has decided that now is the time. Dale has plans to start small and quickly build his business based on ideas he has worked on for several years. His goal is to double the size and the profitability of his business in the first three years. Which of the following BEST describes Dale's new business?
A new venture --- The term new venture often refers to launching a new business with the goal of growing into a much larger enterprise.
A company finds a partner in the country in which it wants to do business to join it in investing resources and capital. This is known as which of the following?
A strategic alliance
K's Deli learned that the deli a couple miles away was having financial trouble and decided to buy the struggling deli and expand it. In what type of corporate action did K's Deli take part?
Acquisition
When McDonald's opened its first restaurants in India, management decided to feature chicken and vegetable sandwiches rather than hamburgers. This menu selection is based on which factor affecting the decision to go international?
Adapting to customer needs
Several doctors at the local hospital decided to form a professional corporation to better serve patients who are being treated outside of the hospital. The group is in the process of determining how the professional corporation should be managed, and who will manage it. When determining who will manage the professional corporation, what key skill should be considered?
An understanding of corporate governance
Jake owns his own small business. He has agreed to work with others who have similar small businesses so they can put together a stronger marketing campaign. Jake is now part of which of the following?
Cooperative - A cooperative is a group of sole proprietors or partnerships that agree to work together for their common benefit.
Ed wants to expand his business with outlets in foreign markets, but he does not want to oversee them personally. Which of the following would be a good option for Ed?
Create a Licensing Arrangement
Which of the following describes the aspect of business that a company performs better than its competitors?
Distinctive competency - A company's distinctive competency is the aspect of the business that it performs better than its competition. One distinctive competence is the ability to serve a new unexploited market. Still another is the ability to move quickly to take advantage of new opportunities, often called "first-mover advantage."
One of the biggest disadvantages of the corporate form of business ownership is
Double taxation -Correct. In addition to profits being taxed at the corporate level, any distributions of the after-tax earnings to the shareholders have to be reported on their personal tax returns as dividends. Depending on the size and ownership of the corporation, it may be subject to complex regulations as well. Limited liability, continuity of ownership, legal status as an artificial person, and the potential to exist forever are all advantages of the corporate form
Which of the following often explains why a small business is successful?
Drive and dedication
Which of the following trends has made it easier for entrepreneurs to start new businesses?
E-commerce - Because the Internet provides fundamentally new ways of doing business, savvy entrepreneurs have created and expanded new businesses faster and easier than ever before
A form of competitive advantage that a company achieves by being the first to enter a specific market or industry is known as _______ advantage.
First - mover
Super Semiconductors, Inc. has decided to build plants in China. Which level of international involvement is Super Semiconductors undertaking?
Foreign direct investment -- A foreign direct investment (FDI) involves buying or establishing tangible assets in another country. Volkswagen has built a factory in Brazil, and Coca-Cola has built bottling plants in dozens of different countries. FedEx has a major distribution center in Paris. Each of these activities represents FDI by a firm in another country.
A company headquartered in Saudi Arabia builds a manufacturing facility in the United States. What international organizational structure does this represent?
Foreign direct investment -- Foreign direct investment involves buying or establishing tangible assets, such as a manufacturing facility, in another country.
Which is the MOST common type of small business partnership?
General partnership - A general partnership is the most common type of partnership and is similar to a sole proprietorship except for the number of owners. Partners may invest equal or unequal sums of money.
Cosmetics pioneer Estee Lauder said of her success in the cosmetics industry, "I never dreamed about success. I worked for it." Which basic factor of small business success does this BEST describe?
Hard work, drive, and dedication --- Small business owners must be committed to succeeding and willing to spend the time and effort to make it happen.
Juan is about to start his own business from scratch and needs to study the market to determine how to create his business plan for the bank. He knows that his location is appropriate for what he wants to sell and to whom he wants to sell. He knows where other stores that sell similar products are, how they are doing, and how much he needs to charge to make a profit and appeal to customers. Which question does Juan still need to answer?
How much will the customers paid for the product
After working for a large firm for several years, Tyler started his own landscaping design business. However, he soon ran out of money and was forced to close the business because he couldn't pay the expenses of the firm along with his personal expenses. Based on this information, what is the likely reason for Tyler's business failure?
Insufficient capital
Tim and Ryan each have their own business, and together they are starting a new company that uses the best competencies of both their companies. The new organization will remain separate from their existing companies. Which of the following BEST describes their new endeavor?
Joint venture -A joint venture occurs when partners share ownership of what is essentially a new venture.
Ryan invested money in a new business, but does not have time to help run the company. He is not going to be part of running the business, and is only liable for debt up to the amount he invested. Which type of partner is Ryan?
Limited partner
Sam and Henry want to open a restaurant. Henry is willing to contribute start-up capital to the business but wants to have no role in the day-to-day operation of the restaurant. Which form of business ownership would be most appropriate for them?
Limited partnership
James is excited about opening a new microbrewery in town. However, he has several concerns. He has cash flow to buy or rent the needed equipment and facilities, but is worried about paying bills while the microbrewery becomes established. James is worried about having a partnership because he doesn't want to give up creative control. He also wants to avoid corporate taxes and selling stock because he is concerned about not being able to react quickly to changes in the market. What type of company should James set up?
Limited partnership - -- A limited partnership allows a partner to invest money but not take an active role in the business operations. This type of partnership would be ideal for James.
In 1957, Fred Morrison began selling a plastic disc for throwing called the Pluto-Platter. He sold the rights to the Pluto-Platter to a small start-up company called Wham-O in 1958. Upon a visit to a college campus where the students were throwing Frisbie Pie Company pie tins and calling out, "frisbie!" the entrepreneurs behind the Wham-O Company rebranded their product as the Frisbee and sold millions, cashing in on the craze that had swept college campuses. What is the MOST LIKELY reason for Wham-O's success?
Market demand - Even though it might look as if the owners Wham-O got lucky, it was actually hard work, drive, dedication, and, ultimately, demand for the product that made them successful. Venture capital and business loans provide temporary cash for operations, but it is sales of products and services that make a business model successful, and sales are based on consumer demand.
Although sheets and comforters and other bedroom accessories represent an established market, entrepreneurs in this industry may be able to gain a competitive advantage if they can exploit a _________.
Niche
Brooke believes that there are many consumers who would like pizza delivery companies to deliver movies and popcorn along with their pizza. Brooke is looking at what type of market?
Niche -- A niche is a segment of a market that is not currently being exploited. In general, small entrepreneurial businesses are better at discovering these niches than are larger organizations.
In contrast to stereotypes of entrepreneurs of the past, today's entrepreneurs are often
Open minded leaders - Today's entrepreneur is seen as an open-minded leader who relies on networks, business plans, and consensus, and is just as likely to be female as male.
Your boss is excited about the prospect of expanding into China to take advantage of that growing market and has asked you to advise a new global marketing department. What is the first action that you would recommend?
Perform extensive market research. --- Market research should reveal whether there is demand for your product in China, and if so, how to adapt the product and the marketing strategies to fit the culture. For example, in China, tea is much more widely consumed than coffee, so Starbucks had to rethink their marketing strategy before they even considered how to enter that market.
More than half of all new businesses will fail in the long run. Which of the following is NOT a general factor in small business failure?
Repayment of franchise fees
Which of the following would likely NOT be a characteristic of a successful entrepreneur?
Risk aversion - Entrepreneurs are those who assume the risk of business ownership; accordingly, they must be willing to deal with uncertainty and risk.
Which type of corporation is organized like a corporation but treated like a partnership for tax purposes?
S corporation
In which step of the business plan will the entrepreneur describe the match between his abilities and experiences and the requirements for producing or marketing the product?
Setting Goals and objectives
Which of the following is the term for all owners of a corporation?
Shareholders
Which form of international expansion involves the development of a mutually beneficial partnership with a company in a foreign country?
Strategic alliance
Owen works at a bike shop in a popular tourist town. However, he feels that the owner is missing an opportunity by not renting bikes to tourists. Owen is considering leaving his job and starting his own bike shop that will offer rentals as well as bikes for purchase. What distinctive competency of small business is Owen displaying?
The ability to identify new niches in established markets - A niche is a segment of a market that is not currently being exploited. By renting bikes as well as selling them, Owen has created a niche that other bike sellers do not have.
Each of the following is a characteristic shared by most entrepreneurs EXCEPT?
They must see what they do as risky
According to studies, what is one of the MOST common reasons that women are starting their own businesses?
They want to set their own hours
Lee is a sole proprietor and owns a restaurant. When the economy falters, he is forced to close his restaurant and owes creditors nearly $24,000. The creditors can go after not only Lee's business assets but also his personal property such as his house, car, and personal bank account. This demonstrates the concept of ________.
Unlimited Liability
Which of the following is a disadvantage of a sole proprietorship?
Unlimited liability
Which of the following is required to be considered an entrepreneur?
You assume the risk of business ownership - Entrepreneurs are people who assume the risk of business ownership. Some entrepreneurs have a goal of independence and financial security, and others want to launch a new venture that can be grown into a large business
In 1908, when the first Ford Model T rolled out of the shop, there were few roads, few gas stations, and hardly anyone in the country could even afford an automobile. But Henry Ford, the entrepreneur who started the company in 1903, wanted to change all that. In those days, in order to persevere, he must have had _
a strong vision and passion - In 1908 there were more than 1,000 different automobile manufactures and little demand for automobiles because they were so expensive and unreliable. The Model T was the first reliable, affordable auto, but, as the letter designation implies, it wasn't Ford's first attempt. Cash and the thought of fame rarely motivate an entrepreneur to accomplish great things. It's more often passion and a strong vision of what could be.
The process of seeking business opportunities, typically under conditions of risk, is referred to as
entrepreneurship -Entrepreneurship is the capacity and willingness to develop, organize, and manage a business venture, along with the risks of doing so, in order to make a profit.
Under a franchise agreement, the _______ grants the right to conduct business using its business model; the _______ owns and operates the local business.
franchiser; franchisee - The franchiser is the party granting the right to do business under its name, and the franchisee is the party purchasing the right.
A _______ is a business that is owned and usually operated by one person.
sole proprietorship
