chapter 8
Entrepreneurs should try to address every potential customer in a market.
F
36. What is the key feature of the resonating-focus approach to CVP? a. It focuses on why people like your product. b. It describes all of the features of the product relative to competitors. c. It tells customers why they should buy your product. d. It describes all the positive features of your product.
It focuses on why people like your product
What competitive information did Bark 'N Leash gain from talking with friends? a. most customers of dog walking services did not have time to find a new service, even if they did not love their current dog walker b. most customers were happy with their dog-walking service c. most service providers offered prompt and regular service d. there were many alternatives for service in the target market area
a. most customers of dog walking services did not have time to find a new service, even if they did not love their current dog walker
What areas would be explored under the "T" phase of TRIM? a. who needs to be on the start team b. the assets needed to start the business c. the benefits of your product d. knowing who your customer will be
a. who needs to be on the start of the team
What question might you ask yourself when trying to determine your "T" when using the TRIM Framework? a. Who needs to be on the team from the beginning? b. What can I currently use to get started? c. What is the clearest description of the idea? d. Who is my primary customer?
a. who needs to be on the team from the beginging?
What elements of car design did Tata change in order to produce their CVP? a. product design b. manufacturing process c. service model d. all of these
all of these
Christine has obtained a job pitching a product at a local state fair. Her job is to demonstrate cookware, highlighting its features and demonstrating its use as she prepares food for visitors who can watch her cook and try samples. Christine will be selling the cookware based on which of the following CVPs? a. hard-sell approach b. points of difference approach c. all-benefits approach d. customer engagement approach
all-benefits approach
What is required to create a successful CVP? a. an understanding of customers' financial situation b. an understanding of how customers consume media c. an understanding of what customers want and need d. an understanding of what customers have already
an understanding of what customers want and need
What can be attributed to the success of Bark 'N Leash? a. analyzing the market, and then building the business to meet its needs b. minimal competition in the area c. heavy demand for the services offered by Bark 'N Leash d. the founder's experience in a similar industry
analyzing the market, and then building the business to meet its needs
What areas would be explored under the "I" phase of TRIM planning? a. deciding whether equipment should be loaned or leased b. deciding what trends support the business or product idea c. determining the cost of acquiring a customer d. determining the market size
b. deciding what trends support the business or product idea
A two to three page document outlining the company's value proposition, customers, and milestones is referred to as a ______. a. back of the napkin b. business plan c. business brief d. feasibility study
c. business brief
The revenue and the cost structures would be included in which part of the business model? a. revenue structures b. cost structures c. financial viability d. financial statement
c. financial viability
David writes the following at the start of his business plan: "Computers are used by almost everyone in today's tech-savvy world. Computers are here to stay." What advice would you give David? a. Reserve this statement for the marketing section of the business plan. b. Revise this statement to explain why computers are here to stay. c. Remove the statement. It does not communicate new information. d. Keep the statement where it is as it will help establish the market size.
c. remove the statement. It does not communicate new information.
32. Which of the following is the main purpose of the feasibility study? a. to establish a base for further planning b. to help investors know whether or not to fund the company c. to help the entrepreneur reach a "go" or "no-go" decision d. to solidify the image and purpose of the business
c. to help the entrepreneur reach a "go" or "no-go" decision
The answer to the question, "What are the different ways I can reach my customer?" will result in what element of the BMC? a. market segment b. channels c. value proposition d. customer segment
channels
Under the business model canvas (BMC), what components are related to customers? a. customer segments, channels, and customer relationships b. customer segments and value proposition c. customer segments and key activities d. customer segments and channels only
customer segments, channels and customer relationships
30. Andrew owns a popular but expensive Chinese restaurant. In order to introduce more people to his brand, he offers a series of one-time "taste fairs" in which he brings his recipes to a locally sponsored event. Customers are able to pay modest amounts for small servings of his creations while not paying for the ambiance of the famous restaurant. What need is Andrew addressing? a. the restaurant's lack of customers b. customers' lack of money c. the owner's lack of infrastructure d. the customers' lack of access
customers lack of money
What would be the best definition of a business model? a. a small pilot of the business as it will be practiced b. a series of hypotheses that suggest business practices c. a plan for expansion d. a framework that describes how a company creates, delivers, and extracts value
d. a framework that describes how a company creates, delivers, and extracts value
What is the primary value of a plan? a. It records the answers to questions. b. It helps one take the first steps toward building a new venture. c. It helps crystalize one's thoughts. d. all of these
d. all of these
What areas would be explored under the M-phase of TRIM planning? a. deciding whether equipment should be loaned or leased b. deciding what trends support the business or product idea c. determining the cost of acquiring a customer d. determining the market size
d. determinging the size of the market
What is the main problem SolarCity is solving by devising solar programs that can be accessible to entire communities? a. lack of access b. lack of money c. lack of skills d. lack of access
lack of access
What problem did IKEA solve for customers in its CVP? a. lack of attractive low-cost furniture b. lack of do-it-yourself furniture c. lack of European designs d. lack of antique furniture
lack of attractive low-cost furniture
This market describes two or more customer segments that are linked but independent of each other. a. mass market b. diversified market c. matching markets d. multisided markets
multisided markets
A package of Supreme Security Software compares the software's features against its competitors' features. The result is a matrix with check marks and Supreme Security Software has more checks than its competitors. This approach to CVP demonstrates which of the following? a. all-benefits approach b. points-of-difference approach c. point-summary approach d. competitive assessment approach
points-of-difference approach
A type of approach that focuses on the product or service relative to the competition and how the offering is different from others on the market is known as the ______. a. resonating-focus approach b. points-of-difference approach c. all-benefits approach d. customer satisfaction approach
points-of-difference approach
What competitive information did Bark 'N Leash gain from talking with family and friends? a. there was too much competition in the area b. people were flooded with advertising and marketing for dog-walking services c. professionalism was often lacking in competitors d. people were not willing to pay for dog-walking services
professionalism was often lacking in competitors
37. Which of the following is considered the "gold standard" of a CVP? a. all-benefits approach b. points-of-difference approach c. resonating-focus approach d. low-cost advantage
resonating-focus-approach
"What are my startup costs?" is a key question to ask when determining the ______ of your TRIM framework. a. Team b. Resources c. Idea d. Market
resources
49. In Southwest's BMC, the company decided to fly only one type of aircraft. What element of the BMC did this address and what was the effect? a. resources; it affected the key activities required to repair and maintain the aircraft b. resources; it affected customers c. key activities; it resulted in reduced customer relationships d. key activities; it resulted in the value proposition
resources;it affected the key activities required to repair and maintain the aircraft
According to the text, it is typically easier for new businesses to change their business model because new businesses ______. a. have the capital to fund business model changes b. have more changeable business models c. tend to be more open to change d. tend to be smaller and more agile
tend to be smaller and more agile
What problem did FedEx solve for customers in its CVP? a. the lack of easy, door-to-door, overnight delivery of packages b. the lack of customer signatures of received goods c. the lack of alternatives to the USPS d. the lack of prepackaged envelopes
the lack of easy, door-to-door, overnight delivery of packages
. Within a business model, customers refer to ______. a. people who express loyalty to your brand b. people who have purchased your product or service c. the segments of the market your offering intends to serve d. people in the geographic reach of the business
the segments of the market your offering intends to serve
The offering addresses ______. a. the value generated for customers b. the amount given to investors in return for capital c. the features of the product or service d. the people in your target market
the value generated for customers
In creating your own BMC, what side of the canvas should you focus on first? a. the value delivery side b. the value creation side c. start anywhere d. start with your product description
the value of the creation side
Under the business model canvas (BMC), what is covered under the offering? a. the value proposition and customer segments b. customer segments c. the value proposition d. customer segments and channels
the value proposition
26. Which of the following allowed Tata cars to be successful? a. their low-cost cars b. their small cars c. their self-parking capabilities d. their line of scooters Ans: A
their low-cost cars
Which of the following allowed Tata cars to be successful? a. their low-cost cars b. their small cars c. their self-parking capabilities d. their line of scooters
their low-cost cars
What is the relationship between the business plan and the business model? a. The business model will not be possible without a business plan. b. The business model will support the business plan, explaining how to attain the plan's goals. c. They are the same thing. d. A business plan supports the business model, explaining how to attain the model's goals.
A business plan supports the business model, explaining how to attain the model's goals.
27. What elements of car design did Tata change in order to produce their CVP? a. product design b. manufacturing process c. service model d. all of these
D
There are 10 components of the business model canvas.
F
66. "What problem is being solved?" is a key question to ask when determining the ______ of your TRIM framework. a. Team b. Resources c. Idea d. Market
Idea
Which of the following is necessary for an effective CVP? a. It must be lower in cost than that offered by competitors. b. It must offer a giveaway or something extra. c. It must be measureable in monetary terms. d. It must offer discounts and rewards for loyal customers.
It must be measureable in monetary terms.
Which of the following is necessary for an effective customer value proposition (CVP)? a. It must not have any direct competitors. b. It must offer better value than the competitors. c. It must cost less than the competitors. d. It must offer the exact same value as the competitors.
It must offer better value than the competitors.
While startups can be flexible in their model, what should be the general guide for existing models? a. Existing models should not be changed. b. Existing models should be replaced frequently. c. Organizations should be prepared to adjust their existing model as markets change. d. Existing models require annual updating.
Organizations should be prepared to adjust their existing model as markets change.
Amazon serves a diversified market because it has multiple products and services that serve several unrelated groups of customers.
T
Gift Prescriptions is a company that offers small gifts that can be left behind in doctors' offices. Gift Prescriptions sells their gifts to pharmaceutical companies, therapists, and medical supply stores who want to leave doctors a small gift in appreciation for their time. Gift Prescriptions' market segment would be described as a ______. a. mass market b. niche market c. segmented market d. diversified market
segmented market
Uber and Airbnb both ______. a. have the same key partners b. use peer-to-peer business models c. provide a unique service d. use traditional business models
use peer-to-peer business models
29. What major customer problem did MinuteClinic solve in their CVP? a. lack of time b. lack of access c. lack of skill d. lack of money
A
Which of the following did Bark 'N Leash investigate as part of the planning? a. financial costs of franchises offering the same service b. services, staff, pricing, location, schedules of local competitors c. a similar service in another part of the country d. willingness of local veterinarian offices to refer their clients
B
Which of the following is necessary for an effective CVP? a. It must include various pricing options. b. It must have the ability to perform over a considerable length of time. c. It must delivered with greater speed than the competitors. d. It must be delivered with more sophisticated technology than the competitors.
It must have the ability to perform over a considerable length of time.
Nan presents her plan for a slip-on shoe that is water repellent, inexpensive, and highly fashionable. She believes that the market for the product is "everyone in the city of Seattle." Because of this, she forecasts that she will capture 40% of the market. What is the business plan error that Nan is incurring? a. too much fluff in the presentation b. no clear product benefits c. the exaggerated hockey stick d. There is no error. This is a reasonable estimate.
c. the exaggerated hockey stick
What attention to professionalism became a surprising selling point for Bark 'N Leash? a. late-night appointments b. all employees were trained in pet CPR c. early-morning appointments d. all employees knew all the dog names
d. all employees knew all the dog names
What are the most beneficial ways to develop a business idea? a. collect data b. gather feedback c. test the business model d. all of these
d. all of these
"What are your customers willing to pay?" is a key question to ask when determining the ______ of your TRIM framework. a. Team b. Resources c. Idea d. Market
d. market
What are the four major categories of problems experienced by customers? a. lack of time, lack of money, lack of skill, lack of access b. lack of money, lack of contacts, lack of interest, lack of time c. lack of skill, lack of knowledge, lack of support, lack of money d. lack of access, lack of support, lack of money, lack of friends Ans: A
A
Business models must be changed whenever a company launches a new product or service.
F
Multisided markets describes a variety of services that serve two or more segments with very different needs or problems.
F
The business model is just about revenue and costs.
F
The infrastructure of the business model does not identify people only technology and facilities.
F
. How is the section on financial viability more than a financial model? a. It carries less detail. b. It carries more detail. c. It explains why customers would give you money. d. It explains the size of the market.
It explains why customers would give you money.
A diversified market offers a variety of service to two or more customer segments with different needs and problems.
T
According to the text, you won't be able to decide whether a business idea is viable until you have talked to at least 50 potential customers.
T
Assets, rent, and advisor knowledge would be some of the considerations in the "resources" step of the TRIM planning approach.
T
Procter & Gamble didn't need to change its business model to accommodate the success of the Swiffer brand because it fit squarely with its existing model
T
The business model of an entrepreneur must be flexible in order to respond to new information.
T
Charisse sells gourmet meal kits that can create full dinners for four in fifteen minutes or less. What need is Charisse addressing in her CVP? a. a lack of time b. a lack of skill c. a lack of access d. a lack of money
a lack of time
Which of the following best defines the term mass market? a. a generic group outside the target market b. a large crowd of nondiscriminating consumers c. a large group of customers with similar needs or problems d. a global market
a large group of customers with needs or problems
Infrastructure can be thought of as ______. a. all the resources that are needed to deliver the CVP b. only technological resources that are needed to deliver the CVP c. only financial resources that are needed to deliver the CVP d. only human resources that are needed to deliver the CVP
a. all the resources that are needed to deliver the CVP
A study by William Gartner from Clemson University showed that business plans ______. a. increased the likelihood that entrepreneurs will actually set up their businesses b. were necessary for all types of businesses c. almost guaranteed success d. had no impact on the business
a. increaseed the likelihood that entrepreneurs will actually set up there business
What competitive strategy did Bark 'N Leash learn from observing posts of competitors' Facebook and Instagram sites? a. establishing locations b. learning about competitor weaknesses in customer service, marketing, and operational skills c. learning the different areas where dog walking was allowed d. hours of servicec. a similar service in another part of the country d. willingness of local veterinarian offices to refer their clients
b. learning about competitor weaknesses in customer service, marketing, and operational skills
"Can I lease equipment?" is a key question to ask when determining the ______ of your TRIM framework. a. Team b. Resources c. Idea d. Market
b. resources
What areas would be explored under the "R" phase of TRIM planning? a. who needs to be on the start team b. the assets needed to start the business c. the benefits of your product d. knowing who your customer will be
b. the assets needed to start the business
A description of the future one envisions for a business, including what one plans to do and how one plans to do it, is called
b.planning
. A ______ is a formal document that provides, among other things, background and financial information about the company. a. business model b. business plan c. business strategy d. investor plan
business plan
Which of the following is a way that a business model will lend value? a. by explaining how revenue will be obtained b. by explaining how profits will be made c. by explaining how the company will serve customers in new markets d. by describing the elements of the financial forecast
by explaining how the company will serve customers in new markets
BlackBerry, which gained significant market share in the early 2000s in the business, government, and consumer markets, lost market share because ______. a. demand for smartphones declined b. competitors offered phones with better designs and more features c. competitors lowered prices to undercut BlackBerry d. all of these
competitors offered phones with better designs and more features
Under the business model canvas (BMC), what components are related to financial viability? a. revenue streams and market size b. cost structure and revenue streams c. investment funds and revenue streams d. revenue streams and growth projections
cost structure and revenue streams
Which of the following BMC element refers to building positive feelings about your business and customer loyalty? a. value proposition b. customer relationships c. market segmentation d. customer loyalty plans
customer relationships
On what does the business model focus in terms of a business's service or product? a. durability b. quality c. differentiation d. viability
differentiation
Gift Prescriptions is a company that offers small gifts that can be left behind in doctors' offices. Gift Prescriptions sells their gifts to pharmaceutical companies, therapists, and medical supply stores who want to leave doctors a small gift in appreciation for their time. Gift Prescriptions' market segment would be described as a ______. a. mass market b. niche market c. segmented market d. diversified market
diversified market
25. To develop a good CVP, products must not only fulfill a need but also ______. a. include a technological component b. fit into customers' lifestyles c. fill a large market d. appeal to affluent customers
fit into customers' lifestyles
To develop a good CVP, products must not only fulfill a need but also ______. a. include a technological component b. fit into customers' lifestyles c. fill a large market d. appeal to affluent customers
fit into customers' lifestyles
When determining your revenue stream, what question should you ask yourself? a. How do I establish and maintain relationships with customers? b. How much are my customers willing to pay? c. What are the most important costs inherent in the business model? d. What resources are the most expensive to get?
how much are my customers willing to pay
45. Under the business model canvas (BMC), what components are related to infrastructure? a. organizational design, facilities, key resources b. key assets, key resources, organization c. key activities, key resources, key partners d. computers, organization design, facilities
key activities, key resources, organizations
Food Flight offers unique food options that are flown in fresh from key cities. Customers can order smoked salmon from Alaska, shrimp creole from Louisiana, and Texas ribs from Dallas. What problem does Food Flight address?
lack of access
What major customer problem did MinuteClinic solve in their CVP? a. lack of time b. lack of access c. lack of skill d. lack of money
lack of time
Gift Prescriptions is a company that offers small gifts that can be left behind in doctors' offices. Gift Prescriptions sells their gifts to pharmaceutical companies, therapists, and medical supply stores who want to leave doctors a small gift in appreciation for their time. Gift Prescriptions' market segment would be described as a ______. a. mass market b. niche market c. segmented market d. diversified market
niche market
A type of CVP that describes why people will really like your product and focuses on the customers and what they really need and value is the ______. a. resonating-focus approach b. points-of-difference approach c. all-benefits approach d. customer satisfaction approach
resonating-focus approach
To produce a feasibility study, what action is needed? a. documenting important parts of your business b. testing, information gathering, and analysis c. creating a well-defined financial forecasts d. meeting with the founders who will agree on the plan of action
testing, information gathering, and analysis
Which approach to CVP involves listing all the advantages of your product or service without comparing it to others? a. the list approach b. the all-benefits approach c. the pro and con listing d. the pitch approach
the all-benefits approach
A CVP requires that you think about your business from the perspective of what group? a. the employees b. the investors c. the customers d. the operations team
the customers
. The first step in creating your CVP is ______. a. persuading customers to purchase your product or service b. persuading customers to sign up for your marketing emails c. uncovering your customers' contact information d. uncovering what your customer really needs
uncovering what your customer really needs
When determining your cost structure, what question should you ask yourself? a. How do I establish and maintain relationships with customers? b. How much are my customers willing to pay? c. What activities can be outsourced? d. What resources are the most expensive to get?
what resources are the most expensive to get
The resonating-focus approach is the "gold standard" because it considers your product or service from the perspective of the customer.
T
67. "How is the network of each member?" is a key question to ask when determining the ______ of your TRIM framework. a. Team b. Resources c. Idea d. Market
Team
Why are "before and after" sketches useful? a. They show the effect of the company's product or service on the customers' lives. b. They show the potential for profitability. c. They show what can be accomplished with the initial investment. d. They show the status of the company in one year's time.
They show the effect of the company's product or service on the customers' lives.
How will the business model create value? a. unmet needs will be met in an existing market b. profits will be made c. the stock will be valued d. customers will be differentiated
a. unmet needs will be met in an existing market
TRIM stands for ______. a. team, resources, idea, market b. trial, research, implement, market c. trial, research, investigate, market d. test, research, implement, manage
a.team, resources,idea,market
What are the four parts of a business model? a. target customers, employees, founders, investors b. financing, infrastructure, employees, customers c. the offering, customers, infrastructure, financial viability d. financing, customers, product, service
c. the offering, customers, infrastructure, financial viability
What are the four major categories of problems experienced by customers? a. lack of time, lack of money, lack of skill, lack of access b. lack of money, lack of contacts, lack of interest, lack of time c. lack of skill, lack of knowledge, lack of support, lack of money d. lack of access, lack of support, lack of money, lack of friends
lack of time, lack of money, lack of skill, lack of access
