MGT 420: Entrepreneurship Final

The high failure rate among new ventures is due, in part, to the liability of newness, which refers to the fact that new companies often falter because _______. -They are underfunded, and the founders of the firms do not move quickly enough to put together boards of directors and boards of advisors that can provide them direction and advice -The founders of the firms underestimate the complexities involved with starting a new business and the firms lack a "track record" with outside buyers and sellers -The people who start the firms cannot adjust quickly enough to their new roles and the firms lack a "track record" with outside buyers and sellers -The founders of the firm underestimate the complexities involved with starting a new business and they do not move quickly enough to establish business partnerships

-The people who start the firms cannot adjust quickly enough to their new roles and the firms lack a "track record" with outside buyers and sellers

According to a Global Entrepreneurship Monitor (GEM) study within the past 7 years, the majority of people in high-income countries are drawn to entrepreneurship ______. -To take advantage of an attractive opportunity -Due to lack of career prospects -As a result of government incentives -Because an important role model was an entrepreneur -To gain prestige

-To take advantage of an attractive opportunity

The number one characteristic shared by successful entrepreneurs is ______. -A desire to achieve financial rewards -A passion for the business -A desire to employ other people -A desire to fulfill a lifetime dream -A desire to bring a revolutionary new product or service to market

A passion for the business

A market opportunity has the following four essential qualities _______. -Attractive; timely; durable; and anchored in a product, service, or business that creates or adds value for its buyers or end users -Practical; opportune; appropriate; and anchored in a product, service, or business that is efficient and effective -Realistic; striking; timely; and anchored in a product, service, or business that is timely -Attention-getting; attractive; timely; and anchored in a product, service, or business that creates or adds value for its buyer or end user -Attractive, durable, resilient, and opportune

Attractive; timely; durable; and anchored in a product, service, or business that creates or adds value for its buyers or end users

There are three primary reasons that people become entrepreneurs and start their own firms. Which of the following is NOT one of those reasons? -To be their own boss -To pursue their own ideas -To realize financial rewards -Because they have a propensity to take risks

Because they have a propensity to take risks

_____ is (are) used to generate a number of ideas quickly. -Insight groups -Competitive intelligence gatherings -Survey groups -Brainstorming

Brainstorming

A _______ is a firm's plan or recipe for how it creates, delivers, and captures value for its stakeholders. -Commercialization plan -Business model -Business plan -Launch plan

Business model

For startup firms, the cost of buying real estate, building facilities, and purchasing equipment often exceeds the firm's ability to provide funds for those needs on its own. Which of the following reasons that motivate firms to seek funding or financing is illustrated in this example? -Lengthy product development cycles -Costs associated with building a brand -Cash flow challenges -Capital investments

Capital investments

In most cases, the most important function of the pro forma statement of cash flows is to project whether the firm will have sufficient ________. -Income to meet its payroll on a weekly or monthly basis -Income to exceed industry norms -Cash to meet its needs -Inventory to meet its sales and production forecasts -Short-term assets to cover its short-term liabilities

Cash to meet its needs

Banks determine creditworthiness (extent to which a person or company is considered suitable to receive financial credit) based on an examination of the five "Cs" of credit. With many loan officers, the most important ingredient in the evaluation of credit risk is which of the five "Cs"? -Character -Collateral -Cash -Capital expenditures

Character

A(n) ______ involves showing a preliminary description of a product or service idea to prospective customers to gauge customer interest, desirability, and purchase intent. -Product/Service statement -Concept test -Impression test -Idea prospectus -Idea test

Concept test

The process of creating new products, ventures, processes, or renewal within large organizations yet carried out by employees working in units separate from organizations who create and test innovations that are the assimilated back inside the broader organization is considered what type of entrepreneurship? -Family Enterprising -Corporate Entrepreneurship -Serial Entrepreneurs -Social Entrepreneurship

Corporate Entrepreneurship

A separate legal entity organized under the authority of a state is referred to as a _______. -Limited partnership -Conglomerate -General partnership -Corporation

Corporation

An example of a valuable library resource is IBISWorld, which is a(n) _______. -Trade journal -Database of industry-related information -Business publication -Academic journal

Database of industry-related information

________ business models are ones that do not fit the profile of standard business models, and are impactful enough that they disrupt or change the way business is conducted in an industry or an important niche within an industry. -Disruptive -Normal -Unique -Incomparable

Disruptive

The ability to notice things without engaging in deliberate search is referred to as ______. -Cognitive alertness -Managerial alertness -Individual awareness -Entrepreneurial alertness

Entrepreneurial alertness

A(n) ___________ is the ability to quickly sense opportunities, take action, and get organized under uncertain conditions. -Fixed mindset -Entrepreneurial mindset -Functioning mindset -Growth mindset

Entrepreneurial mindset

Which of the following is NOT one of the five common myths about entrepreneurs? -Entrepreneurs are born not made. -Entrepreneurs love the spotlight -Entrepreneurs should be young and energetic -Entrepreneurs are moderate risk takers -Entrepreneurs are tenacious

Entrepreneurs are moderate risk takers

Industries that sell products to seniors, such as the eyeglass industry and the hearing aid industry, are benefiting from the aging of the population, which is an important _____ trend. -Environmental -Business -Commerce -Competitive

Environmental

True or False: Entrepreneurs Inside is a form of entrepreneurship which can only exist in for-profit businesses.

False

______ is the process of determining whether a business idea is viable. -Feasibility analysis -Opportunity recognition -Viability analysis -Achievability analysis

Feasibility analysis

Clothing boutiques and specialty shops often start because there is a need for a particular product, but large retailers like Wal-Mart and Costco cannot sell enough of the items to stock it on their shelves. If a clothing boutique started to sell designer clothes or clothing for hard-to-fit people because the clothing was not being offered by a larger retailer, the best way to describe how that idea was recognized is ________. -Brainstorming -Finding a gap in the marketplace -Observing trends -Solving a problem

Finding a gap in the marketplace

________ are an estimate of a firm's future income and expenses, based on its past performance, its current circumstances, and its future plans. -Calculation statements -Forecasts -Statement of cash flows -Financial statements

Forecasts

A(n) ______ is a group of firms producing a similar product or service. A firm's _____ is the limited portion of the industry that it goes after or to which it wants to appeal. -Target market; industry -Trade group; industry -Industry; target market -Industry; trade group

Industry; target market

Economic forces impact the opportunities available to entrepreneurs. Which of the following alternatives reflects a set of economic forces that would be of interest to entrepreneurs? -Level of disposable income, new usages of old technologies, and new laws and regulations -New technologies, consumer spending patterns, and new laws -Interest rates, consumer spending patterns, and level of disposable income -Social and cultural trends, level of interest rates, and what people think is "in" -New changes in political areas, new laws, and level of disposable income

Interest rates, consumer spending patterns, and level of disposable income

Which of the following is NOT an attribute of an attractive industry? -Is young rather than old -Is not crowded -Is late rather than early in its life cycle -Is important to the customer -Is fragmented rather than concentrated

Is late rather than early in its life cycle

Any outside provider of financing to a business will want to assess the owner's commitment and exposure to risk. An owner's cash -Is typically enough to finance a business -Is the ideal source of long-term financing -Is the most visible and trusted sign of commitment -Is more expensive than other methods of financing

Is the most visible and trusted sign of commitment

A business plan is important as it forces the founding team to systematically think through every aspect of their new venture and ______. -It is a budget -It is a public relations document that can be used to promote the firm -It is a contract that is signed by the founders of the firm -It communicated the merits of a new venture to outsiders, such as investors and bankers

It communicated the merits of a new venture to outsiders, such as investors and bankers

Which of following statements about target markets is incorrect? -There is a distinct difference between a firm's industry and its target market. -The challenge in identifying an attractive target market is to find a market that is large enough for the proposed business but is yet small enough to avoid attracting larger competitors. -By focusing on a target market, a firm can usually avoid head-to-head competition with industry leaders and can focus on serving a specialized market very well. -A target market is a place within a larger market segment that represents a narrower group of customers with similar needs. -It is generally easier to find good information about a target market than an industry as a whole.

It is generally easier to find good information about a target market than an industry as a whole

Which of the following statements is not true regarding why entrepreneurs test their assumptions? -To get customer feedback -To be lean and agile in planning and implementing their venture -It takes a lot more time, money, and expertise -To understand customers' pain points

It takes a lot more time, money, and expertise

Which of the following is not one of the reasons why business modeling is considered a valuable entrepreneurial tool? -It gives you the recipe for your business to follow for success -Its lengthy process allows for an entrepreneur to dig deep into the model as a one-time event and then move on to the next part of the entrepreneurial process -It visually shows how the core aspects of a business fit together -To test your assumptions

Its lengthy process allows for an entrepreneur to dig deep into the model as a one-time event and then move on to the next part of the entrepreneurial process

Many entrepreneurs go about the task of raising capital haphazardly because they ______. -Are uncomfortable talking about money and they have not written a business plan -Lack experience in this area and because they do not know much about their choices -Are focused on the nuts and bolts of starting their business -Have not completed a feasibility analysis or business plan

Lack experience in this area and because they do not know much about their choices

There are three types of startup firms: _______. -Lifestyle firms, general firms, and entrepreneurial firms -Standard-of-living firms, statutory firms, and general firms -Entrepreneurial firms, standard-of-living firms, and statutory firms -Lifestyle firms, salary-substitute firms, and entrepreneurial firms

Lifestyle firms, salary-substitute firms, and entrepreneurial firms

In general, industries are more attractive when the ______. -Majority of threats of Porters Five Forces are high -Majority of threats of Porters Five Forces are low -Threat of each of Porters Five Forces is neutral-neither low nor high -Threat of each of Porters Five Forces is high -Threat of each of Porters Five Forces is low

Majority of threats of Porters Five Forces are low

A(n) _______ team is the group of founders, key employees, and advisers that either manage or help manage a new business in its startup years. -Entrepreneurial -Scout -Launch -New venture

New venture

A _______ is the group of founders, key employees, and advisers that move a new venture from an idea to a fully functioning firm. -New venture panel -New venture team -New project team -Startup cadre

New venture team

A(n) ______ is a favorable set of circumstances that creates the need for a new product, service, or business. A(n) ______ is a thought, an impression, or a notion. -Scheme, notion -Opportunity, idea -Idea, design -Idea, opportunity

Opportunity, idea

A(n) _______ details the responsibilities and the ownership shares of the partners involved with an organization. -Partnership agreement -Industry contract -Business pledge -Business agreement

Partnership agreement

If a new firm was launched to help businesses comply with The Affordable Care Act, that opportunity was created by _____. -Changes in economic forces -Demographic changes -Changes in social forces -Changes in technological forces -Political actions and regulatory changes

Political actions and regulatory changes

_______ research is research that is collected by the person or persons completing the analysis. _______ research probes data that is already collected. -Primary, Derivative -Secondary, Primary -Primary, Secondary -Direct, Indirect

Primary, Secondary

An increased focus on health and wellness has resulted in a number of new business ideas including healthier foods and beverages, yoga instruction and training centers, and nutrition consulting. An increased focus on health and wellness is an important ______ that is creating opportunities in many areas for entrepreneurial firms. -Economic force -Regulatory force -Legal force -Technological advances -Social force

Social force

Which form of business ownership is a particularly poor choice for an aggressive entrepreneurial firm? -Corporation -Sole proprietorship -Limited liability corporation -Limited partnership

Sole proprietorship

SafetyWeb is a web-based service that helps parents protect their children's online reputation, privacy, and safety. Which of the following approaches to identifying an opportunity was most likely the impetus for SafetyWeb? -Observing trends -Studying government reports -Solving a problem -Finding gaps in the marketplace

Solving a problem

_______ relationships are characterized by frequent interactions that form between coworkers, friends, and spouses. -Strong-tie -Weak-tie -Lateral-tie -Moderate-tie

Strong-tie

Hulu.com allows people to watch television shows and movies on the internet. Hulu.com's business opportunity was made possibly by ______ that enhanced the ability of television shows and movies to be uploaded to the internet and played by anyone with a suitable computer and an internet connection. -Social forces -Technological advances -Legal chances -Regulatory changes -Economic forces

Technological advances

Commercial finance companies or asset-based lenders may be useful when -The credit risk of the business needing funding is viewed as excessive to other, lower risk lenders -The business needs the full value from their assets -A business has no collateral

The credit risk of the business needing funding is viewed as excessive to other, lower risk lenders

True or False: A B-Corp is a company, which has earned a certification for socially responsible firms.

True

True or False: Entrepreneurship is a method, not a process.

True

Alex has a number of casual acquaintances that he interacts with infrequently. The relationships that Alex has with these people are referred to as _______ relationships. -Strong-tie -Lateral-tie -Weak-tie -Moderate-tie

Weak-tie

A common way that gaps in the marketplace are recognized is _______. -By observing changing environmental trends -By recognizing problems that need to be solved -Via studying industry reports -When people become frustrated because they cannot find a product or service that they need and recognize that other people feel the same way -Via combined focus groups and brainstorming sessions

When people become frustrated because they cannot find a product or service that they need and recognize that other people feel the same way