MGT 345 CH 4

According to the book, a clear understanding of the business's customers is important because it

All of these choices are correct. aids in keeping a strategic distance between itself and its competitors. helps in focusing on the core customers. provides a way to control expenses.

According to the book, which of the following is an example of an economic issue that a new business should consider?

All of these choices are correct. industry trends ease of entry/exit elasticity of demand

________ is the edge a business has over competing businesses.

Competitive advantage

Identify a true statement about the North American Industry Classification System (NAICS).

It provides potential entrepreneurs with data related to industry categorization.

A business owner will gain an increased understanding of the unusual or unique competitive factors and capabilities of a business through

resource-based analysis.

A(n) ________ exists if the service or product performs a similar function.

substitute

The ability to exit a business relatively easily

tends to limit the intensity of competition in the industry.

In the context of conducting an external analysis, which of the following steps should an entrepreneur take next after identifying and researching competitors within an industry?

Draw a set of competitive maps.

What are the two things that a new business owner should keep in mind when defining a customer base?

accuracy and diligence

A tool to better understand competitors and their capabilities is

competitive map

A(n) ________ is an analytical tool to organize information about direct competitors on all points of competition.

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.

The first part of an external analysis is to

determine in which industry the new business will compete.

In the context of external analysis, once an entrepreneur has examined and developed insights about substitutes, elasticity of demand, ease of entry and exit, benchmarking, and industry trends, he or she should ________.

develop an understanding of his or her competitive advantage

Which of the following products is likely to have an elastic demand?

diamond

A(n) ________ keeps an entrepreneur from leaving the business.

exit barrier

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

When small businesses compete with large firms, a main disadvantage is

operating at a cost level.

Sara is planning to start an internet business. In order to develop a competitive map, she is examining certain potential competitors. Which of the following features of the competitors' business is most likely to affect her business too?

product breadth