ENTR-Chapter 4
Which of the following provides the new business with the opportunity to make more money than the competition?
Competitive advantage
Which of the following is likely to occur if entrepreneurs fail to define a radius from which they believe their business will draw a majority of its customers?
It will distort the entrepreneur's advertising efforts.
Larry has set up a new burger joint in his hometown. He has obtained information about who will most likely be customers at his joint. Because his joint is located near a college, he knows that a majority of his customers are going to be students. In the context of the critical steps involved in conducting an external analysis, which of the following should be Larry's next step?
Larry should conduct research to know his exact competitors.
Competitors will often _____ their knowledge if your business is not a potential direct competitor.
share
A substitute can assist in forming a(n) _____ on the price that can be charged for product or service.
Ceiling
When completing a conceptual map, an entrepreneur needs to visit _____ of the potential competitors.
100 percent
Harold is the owner of a beer cafe in his locality. His beer cafe is not the only one in the area. In order to improve business, Harold decides to make a few changes to his cafe. He installs state-of-the-art music system, a karaoke machine, and a snooker table in his cafe. Customers flock to his cafe every evening because it is the only cafe in the locality with these facilities. Which of the critical steps involved in conducting an external analysis has helped Harold improve his business?
Developing an understanding of the competitive advantage
According to the book, which of the following is an example of an economic issue that a new business should consider?
Elasticity of demand, industry trends, and case of entry/exit
In developing a competitive map, an owner should review
average number of customers, household income, population of the area
_____ is the edge a business has over competing businesses.
competitive advantage
A tool to better understand competitors and their capabilities is
competitive map
Once a business is broadly defined, the next step is to
define a narrow group of customers.
When defining potential customers, an owner must
define a specified radius around the business
Gerald is planning on setting up a burger joint in his hometown. He finds out the NAICS (North American Industry Classification System) code for his business. From this information, he is able to understand that his immediate area contains virtually no competitors and has the potential to do very well. In the context of the critical steps involved in conducting an external analysis, Gerald is _____.
defining the industry in which he is competing
The first part of an external analysis is to
determine in which industry the new business will compete.
Which of the following products is likely to have an elastic demand?
diamond
Mary has established a reasonable geographic radius for her flower shop. As a result, she should be able to
examine potential customers
An entrepreneur cannot leave his or her business because of the amount of money that was invested. This is called a(n) _____.
exit barrier
According to the book, a clear understanding of the business's customers is important because it
helps in focusing on the core customers, provides a way to control expenses, and aids in keeping a strategic distance between itself and its competitors.
Keith has set up a new burger joint in his locality. He is planning on introducing craft beers and milkshakes to the existing menu. Thus, the customers who visit his joint will have a range of options to choose from. This scenario exemplifies _____.
identifying substitutes
A(n) _____ is defined as those companies within a specified geographic radius that will be in direct competition for the same customers and sales as that of the new business.
industry
What are the reasons for recommending that the entrepreneur should personally develop the competitive map:
it is less expensive, Knowledge of what is right and wrong with competitors helps with positioning, and Develops insights into positioning, pricing, and facility layout.
A competitive advantage in a business could be _____.
location, product selection, and activity of the firm
Which of the following is an example of the list of items that an entrepreneur should include while visiting and making comparisons to his/her potential competitors?
nearby attraction fro customers, size of facility, access from road
Fragmented markets have
no clear dominant competitors.
