ETR401 - Chapter 7

75. A generic strategy aimed at mass markets in which a firm offers a combination of cost benefits that appeal to the customers is called _____ strategy. A. differentiation B. integration C. cost D. focus

C

79. A group discussion in which criticism is suspended in order to generate the maximum number of ideas is A. mind mapping. B. a focus strategy. C. brainstorming. D. a boom.

C

76. _____ strategies target a portion of the market called a segment. A. Differentiation B. Integration C. Cost D. Focus

D

85. A resource characteristic which enhances value through offering uniqueness to the buyer is A. a combinational competency. B. a transformational competency. C. a rare resource. D. difficult to imitate.

D

87. Identify the two market decisions that Amy and her friends need to make. A. Imitation and innovation B. Local or global C. Mass or niche D. Scale and scope

D

46. A(n) _____ is the business term for the population of customers for your products or services. A. market B. industry C. strategy D. SIC

A

50. A _____ is a narrowly defined segment of the population that is likely to share interests or concerns. A. niche market B. mass market C. degree of similarity D. parallel competition

A

56. Cost benefits can come from all of the following EXCEPT A. credit. B. scale savings. C. learning. D. organizational practices.

A

61. Changes in competitors, sales and profits in an industry over time is called A. industry dynamics. B. retrenchment. C. a shake-out. D. a transformational competency.

A

62. Which of the following represent the five stages of industry life cycle? A. Introduction, growth, maturity, decline, and death. B. Introduction, pioneers, early adopters, decline, and death. C. Pioneers, growth, early adopters, decline, and death. D. Pioneers, early adaptors, late adopters, early majority, and death.

A

65. A type of life cycle stage following a boom in which there is a rapid decrease in the number of firms in an industry is the A. shake-out. B. growth stage. C. maturity stage. D. decline stage.

A

67. An organizational life cycle stage in which established firms must find new approaches to improve the business and its chances for survival is called A. retrenchment. B. maturity. C. growth. D. introduction.

A

68. What represents the amount of money the owners take out of the firm annually and on which they pay taxes? A. Profit before taxes B. Gross profit C. Net profit D. Rate of profit

A

71. The amount of money left after operating expenses are deducted for the business refers to A. net profit. B. gross profit. C. operating profit. D. earnings before tax.

A

21. _____ is the idea and actions that explain how a firm will make its profits. A. Strategy B. Objective C. Mission D. Goal

A

82. Which of the following refers to the particular way a firm implements customer benefits that keeps the firm ahead of other firms in the market? A. Industry analysis B. Competitive advantage C. Resource distribution D. Value chain

B

88. Using the degree of similarity, Amy's concept of laundromat with a workout space can be described as A. parallel competition. B. incremental innovation. C. cloning. D. mass differentiation.

B

26. The fourth step of the small business strategy planning process A. is where you consider your customers and the benefits you want to offer them. B. aims to refine your firm's capabilities in order to maintain a competitive advantage. C. involves determining the best strategic direction and strategy for the firm. D. is to study the dynamics and trends of your industry.

C

28. Which of the following is a key benefit of customer contracting? A. Delivery B. Personalization C. Organizational practices D. Technology

C

32. An opportunity that makes it possible for a new business to gain a foothold in a market refers to A. parallel competition. B. incremental innovation. C. entry wedge. D. altruism.

C

43. An imitation business that competes locally with others in the same industry is called A. pure innovation. B. entry wedge. C. parallel competition. D. incremental innovation.

C

45. The process of creating new products or services is called A. parallel competition. B. incremental innovation. C. pure innovation. D. pure imitation.

C

48. _____ refers to the size of the market whereas _____ refers to its geographic range. A. Scope; scale B. Mass; niche C. Scale; scope D. Niche; mass

C

51. Identify the incorrect observation concerning niche markets. A. Most industries have both mass and niche markets. B. In this approach, you try to target customers only in the niche. C. They are specific and broad. D. It comprises of a segment of the population that is likely to share interests or concerns.

C

52. What types of customers are likely to generate more potential customers than any other type? A. Loyal customers B. Local customers C. Passionate customers D. Corporate customers

C

58. If your product helps the community, a group, the environment, or the world, what type of value benefit is it? A. Assurance B. Personalization C. Altruism D. Quality

C

59. Buying in volume usually produces savings. Identify the type of cost benefit involved. A. Scope savings B. Lower costs C. Scale savings D. Learning

C

25. The tool appropriate for the third step of the small business strategy process to study the dynamics and trends of your industry is the A. value chain analysis. B. SWOT analysis. C. VRIO analysis. D. industry analysis.

D

29. Second sourcing A. occurs when business firms leave a market. B. occurs because many big businesses have policies that provide for set-asides for purchases from small businesses. C. offers the advantage of being globally based. D. at its best provides a competitive pressure to keep both suppliers providing the best service and prices.

D

60. As a firm gets more experience, it can often work with fewer mistakes and greater efficiencies, thereby lowering costs. What type of cost benefit is it? A. Service B. Scope savings C. Learning D. Organizational practices

C

64. A _____ type of life cycle growth stage is marked by a very rapid increase in sales in a relatively short time. A. decline stage B. growth stage C. boom D. shake-out

C

73. All of the following are classic strategies for businesses of all types EXCEPT A. differentiation. B. cost. C. integration. D. focus.

C

83. Capabilities, organizational processes, information, or knowledge of a firm that is not clearly evident refers to A. tangible resources. B. competitive advantages. C. intangible resources. D. core competencies.

C

89. When performing a SWOT analysis, where Amy's business threats meet her business weaknesses, what should her strategy option be? A. Fix B. Fight C. Flee D. Flaunt

C

34. What is the key benefit of rule changes by the government? A. Place B. Delivery C. Quality D. Technology

D

35. _____ is the general name for the line of products or services being sold. A. Strategy B. Competitive advantage C. Market D. Industry

D

39. An overall strategic approach in which a firm seeks to do something that is very different from that of what others in the industry are doing is called a(n) A. cost-leadership strategy. B. imitative strategy. C. grand strategy. D. innovative strategy.

D

24. The second step of the small business strategy planning process is considering with _____ A. customers; benefits. B. competitive advantage; value chain analysis. C. prestrategy; VRIO analysis. D. benefits; industry analysis.

A

27. Which of the following statements about supply shortages is true? A. Supply shortages occur when a new product is in demand B. The target audience is the mass market C. This is a long-term market D. The key benefits are lower costs and scale savings

A

40. The key benefit of an imitation strategy comes from the A. customers. B. employees. C. competition. D. government agencies.

A

74. A type of generic strategy aimed at clarifying how one product is unlike another in a mass market refers to _____ strategy. A. differentiation B. cost C. integration D. focus

A

80. The strategic direction option, at the end of a SWOT analysis, where opportunities match strength is A. flaunt. B. fight. C. flee. D. fix.

A

84. The abilities of a firm to make its product or service in a way that enhances value or efficiency compared to other firms refers to A. transformational competencies. B. organizational altruism. C. value chain analysis. D. combinational competencies.

A

54. Cost benefits A. are important because they always lead to higher profits. B. imply what the customer senses in the service. C. display characteristics related to the nature of the service itself. D. refer to the ways by which a firm can keep costs low for the customer.

D

55. Value benefits can include all of the following EXCEPT A. quality. B. style. C. delivery. D. learning.

D

57. This type of value benefit involved can come from the products or services that you offer, or from your own firm's reputation. A. Brand B. Style C. Personalization D. Place

D

22. Most small businesses are more _____ than _____. A. cost-directed; profit-directed B. imitative; innovative C. customer-driven; employee-driven D. innovative; imitative

B

37. Which of the following statements about NAICS and SIC codes is true? A. SIC covers more industries B. NAICS covers more of the newer types of industries C. SIC codes have six digits D. NAICS codes have four digits

B

78. In SWOT, strengths are A. chances to make greater sales or profits in the environment. B. characteristics of the business that give it an advantage over others in the industry. C. elements in the environment that could cause trouble for the business. D. characteristics that place the firm at a disadvantage relative to others.

B

81. At the end of a SWOT analysis, the strategic direction option, where strengths are matched against threats, is A. flaunt. B. fight. C. flee. D. fix.

B

33. Which of the following, according to Vesper, is NOT an entry wedge specific to small businesses pursuing an imitation strategy? A. Customer contracting B. Market relinquishment C. Government rules D. Product differentiation

D

44. An overall strategic approach in which a firm patterns itself on other firms, with the exception of one or two key areas is called A. pure innovation. B. differentiation focus. C. pure imitation. D. incremental innovation.

D

49. A customer group that involves large portions of the population is called a A. niche market. B. scope of market. C. parallel competition. D. mass market.

D

36. Which are the two major classification systems that code industries? A. NAICS and SIC B. SCALE and SCOPE C. SWOT and VRIO D. SIC and SWOT

A

86. The first thing that Amy and her friends need to do to pursue their strategy is to perform A. an industry analysis. B. a SWOT analysis. C. a VRIO analysis. D. a value chain analysis.

A

90. In performing a SWOT analysis, if Amy's business opportunities meet her business threats, what should her strategy option be? A. Fire-up B. Fight C. Flaunt D. Fix

A

23. The first step of the small business strategy planning process A. involves performing a SWOT. B. involves reviewing and confirming the prestrategy decisions that define your firm and your goal for it. C. is where you consider your customers and the benefits you want to offer them. D. is to study the dynamics and trends of your industry.

B

30. When does market relinquishment occur? A. When there are rule changes by the government B. When business firms leave a market C. When a customer is willing to sign a contract with a small business to ensure a product D. When a new product is in demand

B

31. _____ occurs because government agencies, government-sponsored commercial contracts, and many big businesses have policies that provide for quotas for purchases from small businesses. A. Second sourcing B. Favored purchasing C. Market relinquishment D. Customer contracting

B

38. An overall strategic approach in which the entrepreneur does more or less what others are already doing is called a(n) A. cost-leadership strategy. B. imitative strategy. C. grand strategy. D. innovative strategy.

B

41. Which of the following is an advantage of using an innovative strategy? A. There is much opportunity to sell the business. B. You can make your business precisely fit your own ideas and preferences. C. There is the possibility to buy existing businesses. D. The owner spends very little time in creating the processes.

B

42. Imitation minus one degree of similarity would be the business equivalent of A. incremental innovation. B. cloning. C. pure innovation. D. industry analysis.

B

47. There are two market decisions you need to make early in the process of going into business: A. NAICS and SIC. B. scale and scope. C. make or buy. D. imitation and innovation.

B

63. An industry life cycle stage in which customer purchases increase at a dramatic rate is the A. decline stage. B. growth stage. C. boom. D. shake-out.

B

66. This is the third stage in the industry life cycle which is marked by a stabilization of demand. A. Growth stage B. Maturity stage C. Introduction stage D. Decline stage

B

69. Which of the following refers to funds left over after deducting the cost of goods sold? A. Profit before taxes B. Gross profit C. Net profit D. Rate of profit

B

72. Which of the following is NOT a key type of information needed to perform an industry analysis? A. How profits are made B. Regulatory oversight agency requirement C. Target market competitor concentration D. SIC/NAICS number and description

B

77. Which of the following is NOT one of the supra-strategies identified by Shepherd and Shanley? A. Craftsmanship B. Tightly manage centralization C. Elite D. Super-support

B

53. Which of the following statements about value benefits is false? A. They display characteristics related to the nature of the product or service itself. B. Things like quality, fashion, and reputation are elements that give a product value in the eyes of the customer. C. They are important because they are almost always what lead to higher prices and higher profits. D. They refer to the ways by which a firm can keep costs low for the customer.

D

70. A research process that provides the entrepreneur with key information about the industry, such as its current situation and trends is called A. SWOT analysis. B. VRIO analysis. C. value chain analysis. D. industry analysis.

D