Chapter 8 MCGH

______ are private individuals who provide equity capital to new ventures.

Angel investors

An overall cost leadership strategy requires new entrants to ______.

do more with less

Small companies are especially suited to using a focus strategy because they ______.

have limited resources

Which of the following are major types of strategic alliance for strengthening entrepreneurial firms?

manufacturing retail technology

A firm that has a high concentration of its business in a particular industry is said to have high ______ dependence in that industry.

market

A competitor's likely reaction to a competitive action initiated against it generally depends on which three factors?

market dependence the reputation of the initiating company the competitor's resources

Crowdfunding investment systems bring together potential investors and entrepreneurs by announcing business ideas ______.

on a website

A(n) ______ new entry is a firm's entry into an industry with a radical new product or highly innovative service that changes the way business is conducted.

pioneering

Which of the following are the most important sources of financial resources for entrepreneurs?

-angel investors -venture capitalists -bank financing

In contrast to larger, established firms, young firms are more capable of doing which of the following in deploying low cost-leadership strategies?

Adopt feedback from the marketplace quickly Adapt to upgrades in technology Make decisions easier and faster

Which of the following statements about both pioneering and adaptive entry strategies is true?

Both use some degree of differentiation.

______ is the major factor that creates all viable opportunities that emerge in the business landscape.

Change

______ is funding a venture by pooling small investments from a large number of investors, usually through a website..

Crowdfunding

New value is only associated with start-up companies.

False

Which of the following statements about the major dangers that new entrants face are correct?

Larger firms may copy successful new products or services Established firms may use their market power to overwhelm young, small firms Using combination strategies may lessen the threat posed by larger, established firms

______ commonality is whether or not competitors are vying for the same customers and how many markets they share in common.

Market

A larger firm with "deep pockets" would likely respond to a competitor by doing which one of the following?

Mount and sustain a costly counterattack.

Which of the following statements about single-industry businesses and competitive reactions is true?

Single-industry businesses are more likely to mount a competitive response.

Which of the following attributes of new ventures allow them to be more successful than larger firms in deploying low cost-leadership strategies?

They can change more quickly They can make decisions more quickly They have simple organizational structures

______ is a firm's awareness of its closest competitors and the kind of competitive actions they might be planning.

Threat analysis

Creators of new ventures should be particularly careful to evaluate both the ______ before entering a new market.

barriers to entry and threat of retaliation by incumbents

Motivation for response and ______ should be evaluated before deciding how to respond to an attack by competitors.

capability to respond

Which of the following are characteristics necessary for successful entrepreneurial leadership?

dedication and drive commitment to excellence vision

Hobbies, past work experiences, suggestions by family and friends, technological developments and needs of customers are all sources of ______.

entrepreneurial opportunities

A venture's social capital consists of the firm's ______.

external contacts and advisers

Start-ups that enter mature industries to create a niche market lend themselves to using a(n) ______ strategy.

focus

A firm's choice not to react to a rival's new competitive action is known as ______.

forbearance

Companies using an adaptive new entry strategy must keep the idea ______.

fresh

Acts that might provoke competitors to react, such as new market entry or price cutting, is the component of competitive dynamic analysis known as ______.

new competitive action

Potential customers of an adaptive new entry strategy must believe that the value proposition is ______.

unique

A viable business opportunity must be potentially profitable. In other words, it should be ______.

value creating

Entrepreneurial leaders must possess the characteristics of ______.

vision; dedication and drive; and a commitment to excellence

Well-established incumbents may pose a threat to smaller new entries due to their ______.

larger resource bundle

The two factors that are used to assess whether or not companies are close competitors are ______ commonality and ______ similarity.

market; resource

Which of the following is the most common reason why the cycle of competitive actions and reactions gets started?

new entrants

When local businesses, prior jobs, industry organizations, and other contacts support an entrepreneur's new venture it is called ______ capital.

social

A type of competitive action that requires significant planning and resource allocation is called ______ actions.

strategic

In responding to an attack by a larger company, a small firm may be limited to ______.

tactical actions

Which of the following statements regarding financial resources are true?

-Cash is highly important, but access to capital is also important to the new venture's success -The level of financing is a strong determining factor of how a business is launched -Financial resources are as important to new-venture creation as the product or service's market

Which of the following statements about threat analysis are true?

-Environmental scanning and monitoring are an important part of threat analysis -Market commonality and resource similarity are used to assess whether companies are close competitors -Being aware of competitors and what their potential threats are is the first step in assessing the level of a competitive threat

Which of the following statements about the types of financial resources for new business are true?

-Funding tends to be limited for most start-ups -The types of financial resources depend on two factors: the stage of the venture development and the scale of the venture -Personal savings and friends and family fund the majority of new businesses

Which of the following statements about opportunity recognition are true?

-It involves identifying, choosing, and developing potential opportunities -It is a process entrepreneurs must go through to determine which ideas are strong enough to develop

Which of the following statements about government resources are correct?

-Most government support available to small businesses consists of loan guarantee programs and government contracting -The SBA provides training, counseling, and other support services -State and local governments also support small business through many programs designed to grow the local economy

Which of the following statements regarding pioneering new entries are correct?

-They sometimes create new industries and change the competitive landscape -They are usually technology-based breakthroughs -They are disruptive to the status quo of an industry

Which of the following statements about adaptive new entries are true?

-They take an existing idea and adapt it to a particular situation -They do not involve reinventing the wheel

Tactical actions ______.

-are refinements or extensions of strategies, such as price cuts and increased marketing -include product/service enhancements and new distribution channels

New venture managers in the process of evaluating the threats and industry conditions should use Porter's Five Forces model to consider which of the following?

-the likelihood of incumbent firm retaliation -whether the barriers to entry are too high

Which of the following are true about collusion among companies?

It is a form of co-opetition It has legal ramifications in the United States

In terms of entrepreneurship, opportunity evaluation involves analyzing an opportunity to determine whether it is viable and strong enough to ______.

be developed into a full-fledged new venture

(Match): Technology --> Manufacturing --> Retail -->

T: There is a risk that big firms will take advantage of the know-how of their partners. M: There is a risk that problems with product quality and timely delivery will sour an alliance relationship. R: There is a risk of lack of oversight and control.

Small businesses create the majority of U.S. jobs.

True

Which of the following are among the four qualities necessary for an opportunity to be viable?

achievable durable value creating attractive

A(n) _______ new entry is a firm's entry into a market by offering a product or service that is somewhat new and sufficiently different to create value for customers by capitalizing on current market trends.

adaptive

Entrepreneurial start-ups and small businesses ______.

are responsible for more innovations and new jobs in the United States than any other type of U.S. business

The discovery phase of the opportunity recognition process refers to ______.

becoming aware of a new business concept

Firms are more likely to respond to competitive moves initiated ______.

by market leaders

A firm's strategy of both cooperating and competing with rival firms is called ______.

co-opetition

Co-opetition has many benefits for companies that compete; however, they sometimes come under government scrutiny and are accused of ______, a practice that has legal consequences in the United States.

collusion

The intense rivalry, involving actions and responses, among similar competitors that has the potential to alter a company's strategy is known as ______.

competitive dynamics

One strong risk associated with using a pioneering strategy is ______.

consumers may not accept the new product or service

Both pioneering and adaptive entrants usually involve some sort of _______ strategy to set their entry apart.

differentiation

The final step before initiating a competitive response is to ______.

evaluate what a competitor's reaction is likely to be

In the United States, the federal government provides support for entrepreneurial firms in which of the following key arenas?

government contracting financing

Opportunity recognition is the process of ______.

identifying, selecting, and developing potential opportunities

A(n) ______ new entry describes a firm's entry into an industry with products or services that capitalize on proven market successes and that usually includes a strong marketing orientation.

imitative

The keys to successfully implementing overall cost leadership include ______.

keeping costs low using resources efficiently

A key to using an imitative new entry successfully is to introduce the product or service to a market ______.

that is underserved

A firm is most likely to react to a competitive challenge ______.

that was successful in the past

Which of the following are reasons companies launch new competitive actions?

to capitalize on growing demand to improve their market position to obtain first-mover advantages

A competitor that has been attacked has to decide which of the following?

whether or not they should respond if they are capable of responding how to respond