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