ENT Midterm Exam
Rate of early-stage entrepreneurial activity in the United States:
%7.6 1 out of every 13 american adults is actively engaged in starting a business or s the owner/manager of a business that is less than 3 and 1/2 years old
Only about ___ of new ventures survive their first 3 years.
1/3
According to the Global Entrepreneurship Monitor (GEM) 2010 Survey, about _______ of adults in the U.S. are either starting their business or are running a business that has been in existence for less than 3 1/2 years.
7.6 Percent
intranent
?
Business Model
A firms plan for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the profits it generates.
What is incorrect about business plans?
A large percentage of entrepreneurs do not write business plans for their new ventures.
Which of the following is true
A low associative barrier creates innovations.
Business Plan
A written document that describes all the aspects of a business venture in a concise manner
Which of the following is NOT a factor that you can use to segment your target customers?
ALL of them can be used for segmentations (age, gender, location, culture)
Which of the following statements regarding business success or (failure rates) is correct?
After Four years, 50 percent of new businesses are still open.
What legal documents you should have when you co-found your venture with partner entrepreneurs?
All of the answers given ( non-disclosure, non-competition, founders, investors )
What is NOT an approach to discovering business opportunities?
All of the can be used to discover opportunities.
What is NOT a dimension of entrepreneurial intensity?
Ambitiousness
An entrepreneurial skill set is useful for all of the following except
An entrepreneurial skill would actually be useful for all of the above.
An 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 buyer or end user.
The 3 primary reasons that people become entrepreneurs and start their own firms are to:
Be their own boss, pursue their own ideas, and realize financial rewards.
Which component in the founders agreement can protect your rights if you get fired by your fellow entrepreneurs?
Buyback clause
CHAP 2
CHAP 2
CHAP 3
CHAP 3
CHAP 4
CHAP 4
A logical extension of the view that entrepreneurship rests upon innate characteristics would imply that entrepreneurship __________.
Cannot be taught.
Which is not an example of social force?
Changes in interest rates
Which of the following is NOT a method of primary research?
Consumer Information Reports
The logical process for converting intellectual capital to financial does not include:
Developing network resources
What is NOT a type of Guerrilla Marketing?
Direct Marketing
Entrepreneurs are people who _________.
Discover AND exploit opportunities
According to the textbook, Dropbox, Facebook and LinkedIn are examples of _____ Firms
Entrepreneurial
Apple Inc. is a firm that is proactive, innovative and risk-taking. From this description, we can most accurately conclude that Apple has a high level of
Entrepreneurial Intensity
What is the difference between entrepreneurial intensity and entrepreneurial orientation?
Entrepreneurial intensity describes a person while entrepreneurial orientation describes a firm.
Five most common myths regarding entrepreneurship:
Entrepreneurs are born, not made; entrepreneurs are gamblers, that entrepreneurs are motivated primarily by money; that entrepreneurs should be young and energetic, and that entrepreneurs love the spotlight.
Moderate Risk Takers
Entrepreneurs are usually this, as are most people.
Personality does NOT matter in becoming a successful entrepreneur.
FALSE
restricted stock plans do not include voting rights.
FALSE
According to reliable statistics, 9 out of 10 businesses fail in their first few years of existence.
False
The entrepreneur is a lone hero, battling against the storms of economic, government, social and other environmental forces before anchoring in the harbour of success.
False
Lifestyle Firms
Firms that bring new products and service to the market by creating and seizing opportunities regardless of the resources they currently control
What is NOT an element of Guerrilla Marketing?
First-mover advantage
Which of the following is NOT a component of the business model?
How do we manage risks?
Which of the following statements is true?
ICEHOTEL was using effectual logic. AND A chef who is given a specific menu and has only to pick his or her favorite recipes for the items on the menu, shop for ingredients and cook the meal in their own well-equipped kitchens is an example of casual reasoning.
What contribute to entrepreneurial orientation?
Innovativeness, risk-taking, and proactiveness.
What is untrue regarding founding teams?
It is generally believed that new ventures started by an individual have an advantage over new ventures started by a team
According to the textbook, entrepreneurs are:
Moderate Risk Takers
Which of the following is NOT true concerning the approaches entrepreneurs commonly use to form their teams.
None of the answers given
According to the readings, what are mistakes you should avoid when writing the marketing analysis portion of your business plan?
Not clearly defining you products or service up front and Relying on a single product.
The four primary characteristics of successful entrepreneurs:
Passion for business, product/customer focus, tenacity despite failure, and execution intelligence.
Which of the following represents the correct order of the five sages of the creative process?
Preparation, Incubation, insight, evaluation, elaboration.
personal characteristics researchers have identified that tend to make some people better at recognizing business opportunities than others:
Prior experience, cognitive factors, social networks, and creativity
According to the textbook, the _____ are heart of the financial section of a business plan.
Pro formal financial statements
Which of the following are true?
Restricted stock and its close relative restricted stock units give employees the right to acquire or receive shares, by gift or purchase, one certain restrictions, such as working a certain number of years or meeting a performance target, are met. AND Phantom stock pays a future cash bonus equal to the value of a certain number of shares.
Type of Start up firms
Salary substitute, Lifestyle, Entrepreneurial
Entrepreneurship is the process of creating value by bringing together a unique package of resources to discover and _____ an opportunity
Shape
What is not a personality trait or characteristic common among entrepreneurs?
Short Attention Span
Salary-Substitute Firms
Small firms that provide their owner/owners a similar level of income to what they would be abel to earn in a conventional job
The Entrepreneurial Process
Step 1) Deciding to become an entrepreneur. Step 2) Developing successful business ideas. Step 3) Moving form an idea to an entrepreneurial firm. 4) Managing and growing the entrepreneurial firm.
According to Cho. 1, investors often cite _____ as their most important criterion in the decision to fund new ventures
Strength of the entrepreneur
Which of the following was not identified in the textbook as an element of a new venture team?
Suppliers and Vendors
A _________ market is a place within a larger market segment that represent a narrower group of customers with similar needs.
Target
Execution Intelligence
The ability to fashion a solid idea into a viable business is a key characteristic of successful entrepreneurs
Which of the following was not identified in the textbook as one of the five primary reasons passion is important for the launch of a successful entrepreneurial organization
The ability to stick to a plan even when faced with evidence that changes are needed
The suicide quadrant is usually referred to __________________.
The introduction of new products in new markets.
Which of the following is the main purpose for writing a business plan?
The plan helps the company develop a "road map" to follow, The plan introduced potential investors and other stakeholders to the business opportunity
Innovation
The process of creating something new, which is central to the entrepreneurial processs
What of the following is not a step to starting a business?
They create a solution to match the opportunity.
The three primary reasons that people decide to become entrepreneurs and start their own firms:
To be their own boss, to pursue their own ideas, and to realize financial rewards.
An entrepreneur is someone who creates a firm.
True
Entrepreneurial behavior has a significant impact on economic stability and strength; contributes the most on job growth; and strong impact on effectiveness of larger firms
True
Entrepreneurial firms stress innovation, which is not the case for salary-substitute and lifestyle firms.
True
There is no clear cut answer within either business or academic circles as to whether entrepreneurs are born or made.
True
Brainstorming
a common way to generate new business ideas
competitor analysis
a detailed analysis of a firm's competitors
opportunity
a favorable set of circumstances that creates a need for anew product, service, or business. not all ideas are opportunities.
window of opportunity
a metaphor describe the time period in which a firm can realistically enter a new market
board of advisors
a panel of experts asked by a firms management to provide counsel and advice on an ongoing basis
board of directors
a panel of individual selected by a corporations shareholder to oversee the management of a the firm
opportunity gap
a problem/gap in the market
Product/Customer Focus
a second defining characteristic of successful entrepreneurs.
executive summary
a short overview of the entire business plan
idea
a thought, impression, or notion
contribution margin
amount per unit of sale thats left over an is available to contribute
Product/service feasibility analysis
an assessment of the overall appeal of the product or service being proposed.
Assumptions sheet
an explanation of the most critical assumptions that your financial statements are based on
buying intentions survey
an instrument that is used to gauge customer interest in a product or sevice
intellectual property
any product of human intellect that is intangible but has value in the marketplace
A business opportunity must _______________.
be new, specific and satisfy market needs
Entrepreneurs use
both casual and effectual reasoning
market analysis
breaks the industry into segments and zeroes in on the specific segment (or target market) to which the firm will try to appeal.
Entrepreneurial firms
bring new products and service to the market. they are proactive, innovative, and risk taking.
Two techniques for determining the likely demand for a product or service:
buying intensions survey, and conducting library, internet, and gumshoe research.
strong tie relationships
characterized by frequent interaction and ties between coworkers, friends and spouses
weak tie relationships
characterized by infrequent interaction and ties between casual acquaintances
organizational feasibility analysis
conducted to determine whether a proposed business has sufficient management expertise, organizational competence, and resources to successfully launch its business.
Effectual reasoning is based on the logic, "to the extent we can _________ the future _________"
control, we do not need to predict
Apple is an established firm that encourages and emphasizes behavior throughout its various divisions. According to the textbook, apple practices ________ Entrepreneurship.
corporate
fixed costs
costs a company incurs whether it sells something or not
Proper time to conduct a feasibility analysis:
early in thinking through the prospects for anew business idea. follows opportunity recognition but comes before the development of a business plan.
four environmental trends that are most instrumental in creating opportunities:
economic forces, social forces, technological advances, and political action and regulatory changes .
the ________ is a short overview of the entire business plan
executive summary
Entrepreneurship is the process of creating value by bringing together a unique package of resources to discover and ______ an opportunity.
exploit.
A chef who is not given a menu in advance, and is escorted to a strange kitchen where he or she has to explore the cupboards for unspecified ingredients and cook a meal with them is an example of casual logic.
false
A grocery store in the corner is not an innovation.
false
Casual logic is particularly useful and effective in the suicide quadrant.
false
Guerrilla marketing is a conventional way of performing marketing activities.
false
PEST factors are internal to your business and need to be understood when analyzing the industry as a whole
false
PEST industry analysis include political entrepreneurial, social and technological factors.
false
Primary market research that has already been conducted for other purposes.
false
a business opportunity is just a thought, an impression, or a notion.
false
financial feasibility analysis
final component of a comprehensive feasibility analysis
a template for completing a feasibility analysis:
first screen.
focus group
gathering of 5 to 10 people who are selected because of their relationship to the issue being discussed.
industry
group of firms producing a similar product or service such as computers, children's toys, airplanes, or social networks
new-venture team
group of founders, key employees, and advisers that either manage or help manage a new bsuiness in its start-up years.
Some researchers propose that the process of enterprise creation occurs in the stages with the ________ coming first and then the _________.
idea, implementation
solo entrepreneurs
identified their business ideas on their own
Two primary issues a business should consider:
industry and target market attractiveness
concept statement
industry experts and prospective customers to solicit their feedback.
The "sweet spot" is the intersection of the capabilities, opportunities and ________.
interests
concept test
involves showing a preliminary description of a product or service idea
A business plan is important for two reasons: it forces the founding team to systematically think through every aspect of their new venture and:
it communicates the merits of a new venture to outsiders, such as investors and bankers
costs of goods sold
materials and direct labor needed to produce the revenue driver
effectuation begins with _____.
means
Customer advisory boards
meet regularly to discuss needs, wants, and problems that may lead to new ideas
Passion For Their Business
number one characteristic shared by successful entrepreneurs, whether it is in the context of anew firm or an existing business.
3 ways to identify an opportunity include:
observing trends, solving a problem, and finding gaps in the market place.
3 general approaches used to identify an opportunity:
observing trends, solving a problem, and finding gaps in the marketplace are three general approaches entrepreneurs use to identify an opportunity.
Corridor Principle
once an entrepreneur starts a firm, he or she begins a journey down a path where "corridors" leading to new venture opportunities become apparent.
The greater the ______, the more useful effectual reasoning is.
opportunity
According to the textbook, which is the proper sequence of events in developing successful business ideas?
opportunity recognition, feasibility analysis, development of a business plan.
idea bank
physical or digital repository for storing ideas.
five steps in the creative process for an individual:
preparation, incubation, insight, evaluation, and elaboration.
secondary research
probes data that is already collected
feasibility analysis
process of determining if a business idea is viable
Creativity
process of generating a novel or useful idea
opportunity recognition
process of perceiving the possibility of a profitable new business or a new product or service
Two components of product/service feasibility analysis:
product desirability and product demand.
What are the 4 P's?
promotion, place, price, product
triggering event
prompts an individual to become an entrepreneur.
Lifestyle Firms
provide their owner or owners the opportunity to pursue a particular lifestyle and earn a living while doing so.
3 main steps to be taken to protect ideas from being lost or stolen:
putting an idea into tangible form by such means as entering it in a logbook, or saving it in a computer file, securing the idea, and avoiding making an inadvertent or voluntary disclosure of an idea in a manner that forfeits the right to claim exclusive rights to it if it falls into someone else's hands.
value
referring to worth, importance, or utility.
primary research
research that is collected by the person or persons completing the analysis
day-in-the-life research
sending out teams of testers to the home san businesses of its users to see how its products are working and to seek insights for new product ideas.
An entrepreneurial team can be defined as two or more individuals who have ________ financial interest and participate actively in the development of the enterprise.
significant
Salary-substitute firms
small firms that yield a level of income for their owner or owners that is similar to what they would earn when working for an employer.
there are three types of business plans
summary business plan, contingency plan, full business plan
entrepreneurial altertness
the ability to notice things without engaging in deliberate search.
Corporate Entrepreneurship
the conceptualization of entrepreneurship at the organizational level
Entrepreneurial intensity
the position of a firm on the continuum that ranges from highly conservative to highly entrepreneurial.
Entrepreneurship
the process by which individuals pursue opportunities without regard to resources they currently control.
network entrepreneurs
those who identified their ideas through social contacts
A prototype, particularly if the product is novel, will further enhance your presentation to investors.
true
Attending trade shows can help entrepreneurs find a vendor manufacturing their products.
true
Fred Smith was using effectuation to create the FedEx.
true
Leonard Shoen was using effectuation to create the business of U-HAUL
true
Marketing covers everything from prospective customers to your competition to your charitable activities
true
Only about one-third of new ventures survive their first three years.
true
Sonic drive in restaurants magnetic cups that adhere to the trunk of the car as it drives off, making it appear as if the driver forgot to remove his drink from its temporary resting place are an example of word-of-mouth marketing.
true
Successful entrepreneurs either built teams about them or were part of a team throughout.
true
Yngve Bergqvist was using effectuation to create the ICEHOTEL
true
a firms internal source of advantage is usually referred to its strength or core competence.
true
core internal competencies provide the basis for external positioning.
true
someone dressed up like one of chipotles football size burritos on Halloween is an example of guerrilla markting.
true
the survey from kauffman foundation showed that more than 90 percent of entrepreneurs had a bachelors degree.
true
Creative destruction
when entrepreneurs develop new products and technologies that over time make current products and technology obsolete
