MGt 281 Chapter 7

The need to provide a nurturing environment for a fledgling enterprise led to the creation of business ______.

incubators

Han has an innovative idea for a new technology service and wants to start his own business. Han is most likely to be successful if he ______.

is creative and and has good business know-how

Which are the five tendencies that determine entrepreneurial orientation?

taking risks allowing independent action being proactive being competitively aggressive fostering innovation

One thing entrepreneurs may not realize when they begin their venture is that ______.

they usually have to work every aspect of the business

Which are risks that must be considered in the business plan? (Check all that apply.)

- losing a key customer - key people leaving the company - interest rates changing - fierce competitor responses

Nonfinancial resources include which of the following? (Check all that apply.)

- social capital - legitimacy in the minds of the public

Which are included in an opportunity analysis? (Check all that apply.)

- source of capital - description of the good or service - assessment of the opportunity - assessment of the entrepreneur - specification of resources needed

Select the elements regarding customers that must be addressed in a business plan. (Check all that apply.)

- the ease or difficulty to retain a customer - the decision-making process of the customer - the cost to acquire and support a customer

The ______ describes the venture and its market, strategies, and future direction.

Business plan

Select the characteristics that define a small business. (Select all that apply)

It is not dominant in its field. It is independently operated. It is independently owned.

When faced with early failures, what do successful entrepreneurs do? (Check all that apply.)

Kill the initial idea but not the company. Revise the initial idea. Persist in the face of failure.

_______ refers to people's judgment of a company's acceptance, appropriateness, and desirability.

Legitimacy

True or false: An obvious risk of intrapreneurship is failure.

True

A(n) _______ is a group of people willing to help an entrepreneur learn basics, identify needed strategic changes, and build relationships with bankers.

advisory board

Informal work on projects other than those officially assigned, of employees' own choosing and initiative is called ______.

bootlegging

What are the two common approaches used to stimulate intrapreneurial activity?

bootlegging skunkworks

Wars and disasters, such as Hurricane Katrina and terrorist attacks, have provided entrepreneurial opportunities. These opportunities are the result of ______.

calamities

Once a business begins to grow, entrepreneurs must be able to ______.

delegate work to other people

As an entrepreneurial business grows, leadership often ______.

deteriorates into micromanagement

The tendency of an organization to identify and capitalize successfully on opportunities to launch new ventures by entering new or established markets with new or existing goods or services is called ______.

entrepreneurial orientation

The situation in which an individual initiates and builds an organization pursuing a lucrative opportunity is called ______.

entrepreneurship

New companies without much of a track record ______

face more hurdles attracting investors and customers

An entrepreneurial alliance between an innovator who created at least one successful store and wants to grow the business and a partner who manages a new store of the same type in a new location is called a(n) ______.

franchise

Lourdes, an innovator, has created a successful store and wants to grow the business. She finds a partner who agrees to manage a new store of the same type as Lourdes' but in a new location. The partner will pay Lourdes for allowing him to use her business model and name. This type of arrangement is called ______.

franchising

A great product, a viable market, and ______ are essential ingredients to entrepreneurial success.

good timing

Driven by advances in technology coupled with changes in the medical field, opportunities are arising in the _______ sector.

health care

What are some of the benefits offered by incubators? (Check all that apply.)

shared staff costs technical services low rent business services

Which are common reasons people become entrepreneurs? (Check all that apply.)

the challenge better quality of life profit potential personal satisfaction

An entrepreneur has the most incentive to be careful with financial resources if ______.

the money comes from the entrepreneur's own assets

One of the keys to starting a business is obtaining the money to do so. Where do start-up businesses typically get most of their money from?

the owners, their families, and bank lines of credit

For many astute investors, the most important variable of business plans is ______.

the people

In addition to the financial projections, the best business plans convey which key factors? (Check all that apply.)

the people the context the competition the risks and rewards the opportunity

To spot opportunities for entrepreneurial ideas, you should ______.

think carefully about events and trends as they unfold

Leveraging resources to address social problems is called ______.

social entrepreneurship

_______ is the promise of payoffs from the project in return for support, time, money, and other resources.

Horse trading

The ______ describes all the elements involved in starting the new venture.

Business Plan

As an entrepreneur the challenge called "you might not enjoy it" presents which of the following problems?

Entrepreneurs usually have to do all of the functions of running a business, even those areas they do not like or know how to do.

Which statement about IPOs is true?

IPOs need to be federally registered.

How important are nonfinancial resources to new venture success?

The are essential to the success of a new business.

What key business element is often an entrepreneur's greatest challenge?

raising money to start the business

Which survival difficulties are true of entrepreneurial ventures? (Check all that apply.)

- Mistakes in a start-up are potentially devastating. - Increased competition can cause start-ups to fail. - New ventures have more trouble lining up investors.

Which statements about business plans are true? (Select all that apply.)

- Potential investors want to know more than just financial projections. - Many business plans focus heavily on financial projections.

What are the two mistakes entrepreneurs often make about financial resources?

- They apply financial resources to the wrong uses. - They maintain inadequate control over their resources.

Which statements are true about the people in your entrepreneurial business? (Select all that apply.)

- They should be energetic. - They should be good with ideas but ready to switch ideas if necessary. - They should have skills relevant to the venture.

What are people seeking when they start their own business? (Check all that apply.)

- better quality of life than they might have at big companies - feeling independent and being part of the action - additional opportunity when they see their progress or ideas blocked at large organizations - tremendous satisfaction in building the business and watching it grow and succeed

What are two typical ways entrepreneurs can exploit opportunities?

- by introducing goods or services that capture the market because they are simpler, cheaper, more accessible, or more convenient - by exploring domains that are avoided by large companies

Which elements are necessary to build an entrepreneurial culture within an organization? (Check all that apply.)

- creating new venture teams - changing compensation systems to reward innovative behaviors

What items should be covered when discussing competition in the business plan? (Check all that apply.)

- identification of the current competitors - how the company will respond to the competition - the strengths and weaknesses of the competition

A company's advisory board can do which of the following? (Check all that apply.)

- identify needed strategic changes - teach the basics of business operation - build relationships with other professionals

Identifying environmental context is important in a business plan because ______. (Check all that apply.)

- it can make it easier or harder to get backing and to succeed - a favorable regulatory and economic environment will affect the viability of the new venture

When writing a business plan, the cofounders of Zappos considered the impact of other online shoe stores, as well as shoe departments in department stores. This is an example of considering ______ in a business plan.

Competition

A central objective of entrepreneurship is ______.

Creating value

Which statement regarding risk in a business plan is true?

Risk must be understood and addressed as fully as possible.

A(n) ______ is often defined as having fewer than 500 employees, being independently owned and operated, not dominant in its field, and not characterized by many innovative practices.

Small business

______ creates social value by stimulating social change or meeting social needs.

Social Entrepreneurship

Which factors are associated with environmental context? (Check all that apply.)

inflation interest rates exchange rate tax policies

The first-time sale of federally registered and underwritten shares of company stock to the public is called a(n) ______.

initial public offering

The characteristics associated with successful entrepreneurs can be best summarized as ______.

innovative with knowledge and skills in management, business, and networking

Which are characteristics of an entrepreneurial personality? (Check all that apply.)

leadership motivation to excel commitment and determination

A(n) ______ firm will have an easier time acquiring other resources such as top managers, good employees, financial resources, and government support.

legitimate

New clothing and music trends, desire for fast food, growing interest in sports, and increased concern about the environment are examples of entrepreneurial opportunities due to ______.

lifestyle and taste changes

Getting support for a project from peers before seeking formal approval from higher levels in a company is known as ______.

making cheerleaders

The ______ factor of the business plan should provide a competitive advantage that can be defended.

opportunity

The first formal planning step is a(n) ______, which provides the basis for making a decision on whether to act.

opportunity analysis

Entrepreneurs that are more likely to succeed are found to have which characteristic?

opportunity obsession

One market that traditionally has been dominated by the government and large defense contractors but that is now being explored by smaller entrepreneurs is ______.

outer space

The most dangerous risk in corporate entrepreneurship is the risk of ______.

overreliance on a single project