Entrepreneurship Test 1 - Hsu

The three primary reasons that people become entrepreneurs and start their own firms are to.... (3 reasons) A) gain prestige, realize financial rewards, and eliminate his in their lives B) do what they were "born" to do, be their own boss, and gain prestige C) take big risks, be their own boss, and do what they were "born" to do D) be there own boss, pursue their own ideas, and realize financial rewards E) take advantage of government subsidies, pursue their own ideas, and realize financial rewards

1. Be their own boss 2. Pursue their own ideas 3 Realize/Pursue financial rewards

What are the three dimensions of entrepreneurial intensity? A) innovativeness B) risk-taking C) ambitiousness D) productiveness E) all of the above are dimensions of entrepreneurial intensity

1. Innovativeness 2. Risk-taking 3. Proactiveness

Four characteristics of successful entrepreneurs are.... A) passion for the business, on the cutting edge of technological change, very charismatic, and tenacity despite failure B) young and energetic, passion for the business, product/customer focus, and seeks recognition C) passion for the business, tenacity despite failure, product/customer focus, and execution intelligence D) on the cutting edge of technological change, forward thinking, tenacity despite failure, and product/customer focus E) passion for the business, seeks recognition, young and energetic, and execution intelligence

1. Passion for the business 2. Tenacity Despite failure 3. Product/Customer focus 4. Execution intelligence

Which of the following are not an example of social force? A) Changing interest rates B) Increasing participation in social networks C) Increasing diversity of the workplace D) Aging of the population E) Continual migration of people from small towns and rural areas to cities

A) Changing interest rates

Which of the following should be included in appendices? A) industry analysis B) pro forma financial statements C) company description D) management team E) marketing plan

B

The _______ is a short overview of the entire business plan A) summary statement B) executive summary C) managerial review D) founder's introduction E) abstract

B) executive summary

A(n) _______ is the set of attributes-positive or negative that people associate with a company. A) emblem B) logo C) symbol D) brand E) trade name

Brand

Which of the following is the main purpose for writing a business plan? A) The plan helps the company develop a "road map" to follow B) The plan introduces potential investors and other stakeholders to the business opportunity. C) Both A and B are equally important D) Neither A nor B captures the true purpose of a business plan. E) Reason A is the most important for experienced entrepreneurs and reason B is the most important for inexperienced entrepreneurs.

C) Both A and B are equally important

The greater the ____, the more useful effectual reasoning is. A) growth B) opportunity C) predictability D) risk E_ uncertainty

C) Predictability

Apple is an established firm that encourages and emphasizes entrepreneurial behavior throughout its various divisions. According to the text, Apple practices _____________ entrepreneurship? A) tactical B) corporate C) strategic D) business E) enterprise

Corporate

In ______ -based pricing, the list price of an item is determined by adding markup percentage to a product's cost. A) cost B) compliance C) value D) competitive E) economic

Cost

Which of the following statements about business models is incorrect? A) There are two general types of business model. B) There is no perfect business model. C) Most of the standard business models have been in place for some time. D) A firm's business model is confined to its own boundaries. E) Firms should guard themselves against thinking that one particular business model is a "home run" regardless of circumstances

D) A firm's business model is confined to its own boundaries

What is NOT an approach to discovering business opportunities? A) solving a problem B) considering personal strength and interest C) alertness to environments D) combing completely different fields E) all of them can be used to discover opportunities

D) Combining completely different fields

A business plan is important as it forces the founding team to systematically think through every aspect of their new venture and ______? A) It is a budget B) It is a public relations document that can be used to promote the firm C) It is a contract that is signed by the founders of the firm D) It is a financial analysis E) It communicates the merits of a new venture to outsiders, such as investors and bankers

D) It is a financial analysis

What is NOT a type of Guerrilla Marketing?

Direct marketing

Which of the following statements is true? A) U-Haul was using casual logic B) ICEHOTEL was using effectual logic C) A chef who is given a specific menu and has only to pick out 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 causal reasoning. D) All of the above E) B&C

E) B&C

______ business models depict existing plans or recipes firms can use to determine how they will create, deliver, and capture value for their stakeholders. A) Revolutionary B) Normal C) Customary D) Disruptive E) Standard

E) Standard

Dropbox, Facebook, and LinkedIn are examples of __________ firms. A) lifestyle B) salary-substitute C) industry standard D) entrepreneurial E) standard-of-living

Entrepreneurial

The ability to notice thing without engaging in deliberate search is referred to as _________________ A) cognitive alertness B) cognitive awareness C) managerial alertness D) entrepreneurial alertness E) individual awareness

Entrepreneurial Alertness

Entrepreneurship is the process of creating value by bringing together a unique package of resources to discover and ____________ an opportunity. A) evaluate B) exploit C) explore D) implement E) shape

Exploit

T/F A business opportunity is just a thought, an impression, or a notation

False

T/F A grocery store on a corner where no other grocery store had been before is not an innovation

False

T/F According to reliable statistics, 9 out of 10 businesses fail in their first few years of existence

False

T/F An entrepreneur is someone who creates a firm

False

T/F Entrepreneurs are tenacious is a common myth about entrepreneurs.

False

T/F Fred Smith was using effectuation to create FedEx

False

T/F The first part of the business plan is Company Background

False

What is NOT an element of Guerrilla Marketing?

First-mover advantage

Regarding opportunities and ideas, it's important to discern whether a particular ___________ meets the ___________ for an opportunity

It's important to discern whether a particular idea meets the criteria for an opportunity.

A product attribute map is used to help a firm determine if ______.

Its positioning strategy is appropriate

Which of the following represents the correct order of the five stages of the creative process?

Preparation, Incubation, Insight, Evaluation, Elaboration

___ refers to the activities the firm takes to communicate the merits of its product to its target market. A) sponsorship B) advertising C) Endorsement D) Promotion E) Price

Promotion

T/F 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 causal logic

True

According to the textbook, entrepreneurs are ____________ risk takers A) gamblers B) moderate risk takers C) aggressive risk takers D) forceful risk takers E) minimal risk takers

moderate risk takers

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 the people who start the firm can't adjust _________ enough to their new roles and the firms lack a "track record" with outside buyers and sellers

quickly

Which of the following statements is incorrect regarding founding teams?

B) team that are working together for the first time have an advantage over teams that have worked together before

T/F Causal logic is particularly useful and effective in an uncertain market/industry

True

T/F a niche market is a place within a market segment that represents a narrow group of customers with similar interests

True

Entrepreneurs are people who _____________ and _____________ opportunities. A) discover opportunities B) exploit opportunities C) discover or exploit opportunities D) discover and exploit opportunities E) grow opportunities

discover and exploit opportunities

Entrepreneurs use ______ A) casual reasoning B) effectual reasoning C) neither casual nor effectual reasoning D) both casual and effectual reasoning E) no reasoning

D) both casual and effectual reasoning

Which component in Founders' Agreement can protect your rights if you get fired by your fellow entrepreneurs? (Funders Agreement) A. Ownership Information B. Roles of Entrepreneurs C. Salary D. Buyback Clause E. Information of the business entity

D. Buyback Clause

The two primary audiences for a business plan are ______ and ______ A) a firm's employees; officials with the SEC B) a firm's customers; its competitors C) investors; other external stakeholders and public relations firms D) officials with the SEC; public relations firms E) a firm's employees and investors; other external stakeholders

E) A firm's employees and investors; other external stakeholders

The three types of business plans are _____ A) functional business plan, full business plan, feasibility plan B) summary business plan, contingency plan, full business plan C) functional business plan, contingency plan, full business plan D) opportunity plan, feasibility plan, full business plan E) summary business plan, full business plan, operational business plan

E) summary business plan, full business plan, operational business plan

In regards to business models, which of the following statements is incorrect? A) There is a standard business model that most firms follow B) A firm's business model is inherently dependent on the collection of resources it controls and the capabilities it possesses. C) It is dangerous for a company to assume that it can be successful by simply copying the business model of another firm. D) A firm's business model is its plan or diagram for how it completes E) It is often difficult to determine what another firm's business model is

E. It is often difficult to determine what another firm's business model is

Google is a firm that is proactive, innovative, and risk-taking. From this description, we can most accurately conclude that google has a high level of... A) enterprise focus B) innovative intensity C) entrepreneurial intensity D) creative intensity E) innovative concentration

Entrepreneurial intensity

_____ 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. A) Disruptive B) Normal C) Unique D) Incomparable E) Exceptional

A) Disruptive

Which of the following is true? A) A high associative barrier creates alertness. B) A high associative barrier creates innovations. C) A low associative barrier creates alertness. D) A low associative barrier creates innovations. E) People who have high associative barriers are more likely to discover opportunities

A) High associative barrier creates alertness

The suicide quadrant is usually referred to ________________ A) the introduction of new products in new markets B) the production of existing products in new markets C) the introduction of new products in existing markets D) the production of existing products in existing markets E) none of the above

A) The introduction of new products in new markets

Effectuation begins with ______. A) goals B) means C) needs D) solutions E) strategy

A) goals

Southwest Airlines is an example of a _____ disruptive business model. A) low-end B) new-market C) high-quality D) new-product E) new-channel

A) low-end

Effectual reasoning is based on the logic, "To the extent we can ______ the future, ________" A) predict, we can control it B) estimate, we can predict it C) control, we can predict it D) control, we do not need to predict it E) none of the above

A) predict, we can control it

Which of the following statements is untrue regarding founding teams It is generally believed that new ventures started by an individual have an ___________ over new ventures started by a team

Advantage

Which of the following statements is incorrect about business plan? A) Writing a business plan forces a firm's founders to systematically think through each aspect of their new venture. B) For most new ventures, the business plan is a dual-purpose document used both inside and outside the firm. C) A business plan is typically 25 to 35 pages long D) A large percentage of entrepreneurs do not write business plans for their new ventures E) The business plan should be written while the feasibility analysis is being completed.

E) The business plan should be written while the feasibility analysis is being completed.

What legal documents you should have when you co-found your venture with partner entrepreneurs? (Founders Agreement) A. Non-disclosure agreement B. Intellectual property agreement C. Founders' agreement D. Investors' agreement E. All of the above

E. All of the above

The first step in selecting a target market is to study the industry in which the firm intends to compete and determine the different potential target markets in that industry. This process is called______ A) market positioning B) market splitting C) market targeting D) market subdividing E) market segmentation

Market Segmentation

The 4ps of marketing refer to a company's _____ A) tactical mix B) promotional blend C) organizational mix D) marketing mix E) selling mix

Marketing mix

Which of the following is the correct sequence of events to the process of selecting target market and position strategy?

Segment the market, select a target market, create a unique positioning strategy

Which of the following is not a personality trait or characteristic common amount entrepreneurs? A) Promoter B) Visionary C) Short attention span D) Alert to opportunity E) Self-starter

Short attention span

The increasing number of social networks on the Internet is attributed to a jump in the number of people who are wanting to connect with one another online. The increasing number of social networks is an important _________ trend.

Social

The survival rates of entrepreneurial firms in the US is as high as ___________ after __________ years

as high as 50% after four years

Which of the following was not identified in the textbook as an element of a new venture team? A) board of advisors b) suppliers and vendors c) key employees d) lenders and investors e) management team

b) suppliers and vendors

As new products that are better than the existing generation of products are introduced, sales normally increase because the new products provide consumers increased value of worth. This process, which is called, ______________ stimulates economic activity, which is a good thing for the economy. A) creative destruction B) receptive destruction C) iterative replacement D) inventive replacement E) iterative destruction

creative destruction

The term "window of opportunity" is a metaphor that describes the time period in which a firm can... A) obtain funding or financing B) hire new employees C) complete a financial analysis D) realistically enter a new market E) write a business plan

realistically enter a new market

Investors often cite the __________ as their most important criterion in the decision to fund new ventures. A) financial position of the new venture B) strength of the industry the new firm is entering C) strength of the new venture's marketing plan D) strength of the business idea E) strength of the entrepreneur

strength of the entrepreneur

According to the Global Ent Monitor (GEM) 2013 survey, about ____________ percent of adults in the US are either starting a business or are running a business that has been in existence for less than 3 1/2 years. A) 3.8 B) 5.5 C) 7.6 D) 9.0 E) 12.7

12.7%

An opportunity has the following four essential qualities:

Attractiveness, Timely, Durable, Anchored in a product, service, or business that creates or adds value for its buyer or end user

The fact that companies often falter because people who start the firms can't adjust quickly enough to their new roles and because the firm lacks a "track record" with outside buyers and sellers is referred to as the A) liability of preparedness B) liability of newness C) burden of novelty D) burden of freshness E) milestone of innovation

B) Liability of newness

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 A) The ability to stick to a plan even when faced with evidence that changes are needed B) A willingness to work hard for an extended period of time C) The ability to overcome setbacks and "no's" D) The ability to listen to feedback on the limitations of your organization and yourself E) The ability to learn and iterate

The ability to stick to a plan even when faced with evidence that changes are needed

An accurate characterization of interest in entrepreneurship: A) There is minimal interest in entrepreneurship across the world B) There is minimal interest in entrepreneurship in North America and Europe, but significant interest in Asia and Australia C) There is significant interest in entrepreneurship in North America and Europe, but minimal interest in Asia and Australia D) While interest in entrepreneurship was once high, it is waning in popularity across the world. E) There is tremendous interest in entrepreneurship across the world

There is tremendous interest in entrepreneurship across the world

According to the GEM 2013 study, the majority of people in high-income countries are drawn to entrepreneurship. Why? A) to take advantage of an attractive opportunity B) due to lack of career prospect C) as a result of government incentives D) because an important role model was an entrepreneur E) to gain prestige

To take advantage of an attractive opportunity

T/F Entrepreneurs should put pro forma financial statements in Appendix rather than in the financial plan section

True

T/F Guerrilla marketing is a conventional way of performing marketing activities

True

T/F Joseph Schumpeter argued that entrepreneurs develop new products and tech that over time make current products and tech obsolete, and this process, which he called creative destruction, is good because it stimulates economic activity.

True

T/F Leonard Shoen was using effectuation to create the U-Haul

True

T/F Someone dressed up like one of Chipotle's football sized burritos on Halloween is an example of Guerrilla Marketing

True

T/F Sonic DriveIn Restaurant's magnetic cups that adhere to the trunk of a car as it drives off, making it appear as if the driver forgot to remove the drink from its temporary resting place, are an example of word-of-mouth marketing

True

T/F The ideal length of a business plan without references and appendices should be between 25 and 35 pages

True

T/F Yngve Bergqvist was using effectuation to create ICEHOTEL

True

According to the textbook, most experts recommend _____ pricing because it hinges on the perceived value of a product or service. A) value-based B) cost-based C) competitive-based D) tactical E) strategic

Value based

In ____ pricing, the price is determined by estimating what consumers are willing to pay for a product and than backing off a bit to provide a cushion. A) value-based B) tactical C) strategic D) cost-based E) economic-based

Value based