Strategic Planning/Business Policy Ch. 8

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

market

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

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

new entrants

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

An overall cost leadership strategy requires new entrants to ______.

do more with less

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

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

forbearance

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

larger resource bundle

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

Entrepreneurial leaders must possess the characteristics of ______.

vision; dedication and drive; and a commitment to excellence

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

angel investors

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 Need help? Review these concept resources.

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

Select all that apply Which of the following statements about the types of financial resources for new business are true? (Check all that apply.) Personal savings and friends and family fund the majority of new businesses. 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. Most start-ups fail due to their large size and lack of enough revenues to support their size.

-Personal savings and friends and family fund the majority of new businesses. -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.

Select all that apply 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? (Check all that apply.) The likelihood of retaliation by incumbent firms The likelihood that an adaptive new entry will be successful Whether the barriers to entry are too high Whether suppliers focus on pioneers

-The likelihood of retaliation by incumbent firms -Whether the barriers to entry are too high

Select all that apply Which of the following statements about the types of financial resources for new business are true? (Check all that apply.) The types of financial resources depend on two factors: the stage of the venture development and the scale of the venture. Most start-ups fail due to their large size and lack of enough revenues to support their size. Funding tends to be limited for most start-ups. Personal savings and friends and family fund the majority of new businesses.

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

Select all that apply Which of the following statements about the major dangers that new entrants face are correct? (Check all that apply.) Large companies can use their flexibility to outmaneuver small firms. Using combination strategies may lessen the threat posed by larger, established firms. Established firms may use their market power to overwhelm young, small firms. Larger firms may copy successful new products or services.

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

Select all that apply Which of the following are the most important sources of financial resources for entrepreneurs? (Check all that apply.) bank financing charitable donations venture capitalists angel investors

-bank financing -venture capitalists -angel investors

Select all that apply Which of the following factors must be present in order for an entrepreneurial venture to create new value? (Check all that apply.) a patentable idea that solves a problem for customers resources to pursue the opportunity an entrepreneurial opportunity at least one entrepreneur

-resources to pursue the opportunity -an entrepreneurial opportunity -at least one entrepreneur

Select all that apply Which of the following are reasons companies launch new competitive actions? (Check all that apply.) to improve their market position to capitalize on growing demand to ready the company to exit the marketplace to obtain first-mover advantages

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

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

Change

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.

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

Threat analysis

True or false: Small businesses create the majority of U.S. jobs.

True Reason: Small businesses created about 62% of the net new jobs.

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

co-opetition

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

Select all that apply Which of the following statements regarding financial resources are true? (Check all that apply.) Financial resources are as important to new-venture creation as the product or service's market. Cash is highly important, but access to capital is also important to the new venture's success. Bank loans are the most-used source of financing for a new business. 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. -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.

Select all that apply Which of the following statements about threat analysis are true? (Check all that apply.) Market commonality and resource similarity are used to assess whether companies are close competitors. Threat analysis helps determine whether the firm should use strategic or tactical actions. Environmental scanning and monitoring are an important part of threat analysis. Being aware of competitors and what their potential threats are is the first step in assessing the level of a competitive threat.

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

Select all that apply Which of the following are characteristics necessary for successful entrepreneurial leadership? (Check all that apply.) personal financial resources dedication and drive smarter than their employees vision commitment to excellence

-dedication and drive -vision -commitment to excellence

Select all that apply A competitor that has been attacked has to decide which of the following? (Check all that apply.) who will be responsible for responding and when how to respond if they are capable of responding whether or not they should respond

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

Select all that apply Tactical actions ______. (Check all that apply.) include product/service enhancements and new distribution channels are refinements or extensions of strategies, such as price cuts and increased marketing include strategies like entering new markets and developing close ties with suppliers represent major resource commitments

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

Select all that apply The keys to successfully implementing overall cost leadership include ______. (Check all that apply.) offering features early adapters seek keeping costs low finding ways to differentiate products or services using resources efficiently

-keeping costs low -using resources efficiently

True or false: New value is only associated with start-up companies.

False Reason: Major companies, family-owned businesses, established organizations, and non-profits can also create new value.