BUSMHR 2500 Chapter 13

In the context of growth strategies, _____ involve selling a new product to a new market. Multiple choice question. diversification strategies penetration strategies product development strategies market development strategies

diversification strategies

The need or magnitude of the new resources required by an entrepreneur for his or her firm can be reduced through _____. Multiple choice question. effective management of existing resources buying new resources use of personal funding or funding by family issuing public equity

effective management of existing resources

According to the penetration strategy, an entrepreneur tries to penetrate his or her firm's product or market further by _____. Multiple choice question. offering the same product to a different demographic group encouraging existing customers to buy more of the firm's current products selling the existing product in new locations capitalizing on existing distribution systems and on the corporate reputation the firm has with its customers

encouraging existing customers to buy more of the firm's current products

An advantage of expansion and growth for a new firm is that an increase in size _____. Multiple choice question. enhances the legitimacy of the firm allows the entrepreneur to have more personal time leads to the strengthening of the existing company culture through influx of new employees reduces the pressure of managing employees

enhances the legitimacy of the firm

Growth may not be pursued by entrepreneurs because they may have a belief that in doing so _____. Multiple choice question. requirements for efficient consumer response increase the need to file end-of-year returns of the business is eliminated the need for record keeping will increase firm profitability or the firm's chances of survival will be sacrificed

firm profitability or the firm's chances of survival will be sacrificed

Identify the benefits of time management for entrepreneurs of rapidly growing ventures. (Check all that apply.) Multiple select question. Increased responsibility Increased productivity Lesser need for providing feedback to employees Improved interpersonal relationships

Increased productivity Improved interpersonal relationships

Match the categories of customers in market development strategies (in the left column) with their descriptions (in the right column). Instructions New geographical market New demographic market New product use Refers to knowledge of a product's new use that allows producers to modify their product slightly to better satisfy customers Refers to characterizing customers based on their income, education, age, sex, and other factors Refers to selling an existing product in new territorial markets

New geographical market - Refers to selling an existing product in new territorial markets New demographic market - Refers to characterizing customers based on their income, education, age, sex, and other factors New product use - Refers to knowledge of a product's new use that allows producers to modify their product slightly to better satisfy customers

Which of the following should be practiced by an entrepreneur to deal with incompetent employees? Multiple choice question. Problems should be identified with a proposed solution agreeable to both the employee and the entrepreneur. Only competent employees should be given feedback on a regular basis. A firing decision should be based on the discretion of the entrepreneur rather than employee evaluation. A firing decision need not be well documented.

Problems should be identified with a proposed solution agreeable to both the employee and the entrepreneur.

_____ for growth involve developing and selling new products to customers who are already purchasing a firm's existing products. Multiple choice question. Diversification strategies Product development strategies Penetration strategies Market development strategies

Product development strategies

True or false: Diversification strategies are completely unrelated to an entrepreneur's and a firm's knowledge.

Reason: This is false. Even though knowledge bases related to an entrepreneur's and a firm's knowledge appear to be new in diversification strategies, some strategies are related to an entrepreneur's and a firm's knowledge.

Identify the characteristics of entrepreneurs in firms with actual growth. Multiple choice question. They possess the necessary abilities for transition but do not aspire to do so. They aspire to grow their businesses but do not possess sufficient abilities to successfully satisfy this aspiration. They possess neither the ability to make the transition to a more professional management approach nor the aspiration to grow their businesses. They possess both the ability to transition to a more professional management approach and the aspiration to grow their businesses.

They possess both the ability to transition to a more professional management approach and the aspiration to grow their businesses.

An advantage of using the product development strategy for growth is the chance to _____. Multiple choice question. offer the same product to a different demographic group sell the existing product in new locations capitalize on existing distribution systems and on the corporate reputation a firm has with its customers encourage existing customers to buy more of a firm's current products in the market

capitalize on existing distribution systems and on the corporate reputation a firm has with its customers

In the context of growth strategies, the _____ focuses on a company's existing product in its existing market. Multiple choice question. market development strategy product development strategy diversification strategy penetration strategy

penetration strategy

An entrepreneur with exceeding cash outflow trying to have an up-to-date assessment of his or her cash position can accomplish that by _____. Multiple choice question. preparing monthly cash flow statements eliminating sensitivity analysis in projections avoiding adjustments in the pro forma statements avoiding comparison of pro forma statements with the actual results

preparing monthly cash flow statements

According to the principles of time management, the _____ requires that an entrepreneur recognize that he or she is a time waster, that time is a valuable resource, and that there is a requirement to change personal attitudes and habits concerning the allocation of time. Multiple choice question. principle of desire principle of effectiveness principle of analysis principle of reanalysis

principle of desire

The process of improving an individual's productivity through more efficient use of time is referred to as __ __.

time management

Identify a true statement about the sensitivity analysis conducted when projecting cash flow in the early stages of a venture. Multiple choice question. Sensitivity analysis should not be computed for disbursements. An entrepreneur can use 1 plus and minus 5 for an optimistic and pessimistic cash estimate for monthly expected cash flow. Sensitivity analysis fails to ascertain the maximum cash needed by an entrepreneur. An entrepreneur lowers the number of items sold and reduce market share to conduct sensitivity analysis.

An entrepreneur can use 1 plus and minus 5 for an optimistic and pessimistic cash estimate for monthly expected cash flow.

Matthias is an entrepreneur who runs a home stay for tourists visiting the Hawaiian Islands. His dream is to grow his business only to an extent that it does not become one of a professional manager. His business is an example of a lifestyle business. In the given context, which of the following steps is Matthias expected to take? Multiple choice question. He is likely to conduct sensitivity analysis for maintaining cash flow. He is likely to develop his business using horizontal integration strategies. He is likely to control his business from growing beyond a certain point. He is likely to consider leasing new assets as an alternative to fixed assets.

He is likely to control his business from growing beyond a certain point.

Adrian is an entrepreneur heading a rapidly growing venture. As the venture grows and expands, he experiences the pressure of managing the employees in the venture. Identify a strategy that Adrian should use to overcome the pressure of managing of employees. Multiple choice question. He should provide training to employees to increase their ability and improve their performance. He should keep himself available to make every management decision. He should avoid soliciting suggestions on the department or the firm from the employees. He should provide feedback to attack employees and create a fear of failure.

He should provide training to employees to increase their ability and improve their performance.

CT Koffee, a chain of coffeehouses in the United States, wants to pursue the penetration strategy to increase its growth and revenue. Which of the following steps should the company take to achieve growth using the penetration strategy? Multiple choice question. Increase its marketing budget for promotion campaigns that encourage existing customers to visit its cafes more often Start the manufacture of coffee mugs and wooden kitchenware Establish a new chain of pizza delivery centers in the United States Establish cafe chains in South Asian markets such as India, Sri Lanka, and Pakistan

Increase its marketing budget for promotion campaigns that encourage existing customers to visit its cafes more often

Which of the following are the advantages of the participative style of management of employees? (Check all that apply.) Multiple select question. Employees can be relieved of the added responsibility of making decisions and taking initiative. Highly qualified managers and employees always follow the entrepreneur's ways to tackle problems. Involving others in the decision-making process reduces the information-processing demands on the entrepreneur. Employees are better prepared and inspired to implement the decided course of action in a decision-making process.

Involving others in the decision-making process reduces the information-processing demands on the entrepreneur. Employees are better prepared and inspired to implement the decided course of action in a decision-making process.

Which of the following are the advantages of the participative style of management of employees? (Check all that apply.) Multiple select question. Highly qualified managers and employees always follow the entrepreneur's ways to tackle problems. Involving others in the decision-making process reduces the information-processing demands on the entrepreneur. Employees can be relieved of the added responsibility of making decisions and taking initiative. Employees are better prepared and inspired to implement the decided course of action in a decision-making process.

Involving others in the decision-making process reduces the information-processing demands on the entrepreneur. Employees are better prepared and inspired to implement the decided course of action in a decision-making process.

Identify the implications of growth for a firm. (Check all that apply.) Multiple select question. It can reduce the firm's bargaining power. It can cause problems of employee morale and employee burnout. It can lead to a stretching of the existing financial resources. It can make the firm less attractive to suppliers.

It can cause problems of employee morale and employee burnout. It can lead to a stretching of the existing financial resources.

AQO2, a company that sells fruit-based beverages in the United States, has a popular product named Ozo. Ozo is marketed as a sports drink for teenagers and young adults. The company plans to use the penetration strategy for growth. Which of the following should the company do to follow the penetration strategy? Multiple choice question. It should look to diversify its business by entering into the manufacture of sports goods. It should enter markets in Asia and Latin America with its popular product, Ozo. It should revise the marketing strategy for Ozo to promote it as a supplemental drink that can be consumed every day. It should focus on increasing its range of beverages by offering caffeine-based drinks.

It should revise the marketing strategy for Ozo to promote it as a supplemental drink that can be consumed every day.

AYZ Techno Solutions, a software solutions provider, is a newly established venture that is rapidly growing and expanding. This leads to pressure on its existing human resources. The venture does not have the luxury of a human resource department that can interview, hire, and evaluate employees. Which of the following steps should the company take to overcome pressures on its existing human resources? Multiple choice question. It should make all members of the workforce part-time employees. It should use a professional employer organization to hire and retain employees. It should avoid maintaining a corporate culture despite the influx of new employees. It should allow hiring of only part-time workers for all services

It should use a professional employer organization to hire and retain employees.

_____ focus on selling a firm's existing products to new groups of customers. Multiple choice question. Product development strategies Diversification strategies Market development strategies Penetration strategies

Market development strategies

Identify the strategies that an entrepreneur uses for overcoming pressures of managing employees. (Check all that apply.) Multiple select question. Establishing a "me" spirit in meetings and memoranda to employees as well as to other stakeholders Providing frequent feedback to employees Avoiding delegating responsibility to others Conducting open and frequent communication with employees

Providing frequent feedback to employees Conducting open and frequent communication with employees

True or false: An inexpensive way for entrepreneurs to overcome pressures on existing financial resources is by acquiring new resources.

Reason: This is false. To overcome pressures on existing financial resources, the entrepreneur could acquire new resources. However, the acquisition of new resources is expensive, whether in terms of the equity sold or the interest payments from debt.

True or false: Effective time management depends on an entrepreneur's willpower and self-discipline.

Reason: This is true. The principle of desire requires that an entrepreneur recognize that he or she is a time waster, that time is an important resource, and that there is a need to change personal attitudes and habits regarding the allocation of time. Therefore, effective time management depends on the entrepreneur's willpower, self-discipline, and motivation to optimize his or her time.

Identify a true statement about the participative style of management of employees by entrepreneurs. Multiple choice question. The entrepreneurs focus solely on increasing the number of employees. The employees and entrepreneurs reduce their personal stake in the company performance. The entrepreneurs involve the employees in the decision-making process. The employees receive minimum feedback from the entrepreneurs.

The entrepreneurs involve the employees in the decision-making process.

Entrepreneurs who possess the ability to make the transition to a more professional management approach and the aspiration to grow their businesses are the most likely to _____. Multiple choice question. be CEOs of lifestyle firms be frustrated by the firm's lack of growth delegate work to other employees achieve firm growth

achieve firm growth