Bus 100 Chapter 3 - 3.6 quiz

Dale has been working in IT for a large company for the past 10 years and has often thought about starting his own business dash he has decided that now is the time. Dale has plans to start small and quickly build his business based on ideas he has worked on for several years. His goal is to double the size and the profitability of his business in the first three years. Which of the following BEST describes​ Dale's new​ business?

A new venture --- The term new venture often refers to launching a new business with the goal of growing into a much larger enterprise.

A company finds a partner in the country in which it wants to do business to join it in investing resources and capital. This is known as which of the​ following?

A strategic alliance

K's Deli learned that the deli a couple miles away was having financial trouble and decided to buy the struggling deli and expand it. In what type of corporate action did​ K's Deli take​ part?

Acquisition

When​ McDonald's opened its first restaurants in​ India, management decided to feature chicken and vegetable sandwiches rather than hamburgers. This menu selection is based on which factor affecting the decision to go​ international?

Adapting to customer needs

Several doctors at the local hospital decided to form a professional corporation to better serve patients who are being treated outside of the hospital. The group is in the process of determining how the professional corporation should be​ managed, and who will manage it. When determining who will manage the professional​ corporation, what key skill should be​ considered?

An understanding of corporate governance

Jake owns his own small business. He has agreed to work with others who have similar small businesses so they can put together a stronger marketing campaign. Jake is now part of which of the​ following?

Cooperative - A cooperative is a group of sole proprietors or partnerships that agree to work together for their common benefit.

Ed wants to expand his business with outlets in foreign​ markets, but he does not want to oversee them personally. Which of the following would be a good option for​ Ed?

Create a Licensing Arrangement

Which of the following describes the aspect of business that a company performs better than its​ competitors?

Distinctive competency - A​ company's distinctive competency is the aspect of the business that it performs better than its competition. One distinctive competence is the ability to serve a new unexploited market. Still another is the ability to move quickly to take advantage of new​ opportunities, often called​ "first-mover advantage."

One of the biggest disadvantages of the corporate form of business ownership is

Double taxation -Correct. In addition to profits being taxed at the corporate​ level, any distributions of the​ after-tax earnings to the shareholders have to be reported on their personal tax returns as dividends. Depending on the size and ownership of the​ corporation, it may be subject to complex regulations as well. Limited​ liability, continuity of​ ownership, legal status as an artificial​ person, and the potential to exist forever are all advantages of the corporate form

Which of the following often explains why a small business is​ successful?

Drive and dedication

Which of the following trends has made it easier for entrepreneurs to start new​ businesses?

E-commerce - Because the Internet provides fundamentally new ways of doing​ business, savvy entrepreneurs have created and expanded new businesses faster and easier than ever before

A form of competitive advantage that a company achieves by being the first to enter a specific market or industry is known as​ _______ advantage.

First - mover

Super​ Semiconductors, Inc. has decided to build plants in China. Which level of international involvement is Super Semiconductors​ undertaking?

Foreign direct investment -- A foreign direct investment​ (FDI) involves buying or establishing tangible assets in another country. Volkswagen has built a factory in​ Brazil, and​ Coca-Cola has built bottling plants in dozens of different countries. FedEx has a major distribution center in Paris. Each of these activities represents FDI by a firm in another country.

A company headquartered in Saudi Arabia builds a manufacturing facility in the United States. What international organizational structure does this​ represent?

Foreign direct investment -- Foreign direct investment involves buying or establishing tangible​ assets, such as a manufacturing​ facility, in another country.

Which is the MOST common type of small business​ partnership?

General partnership - A general partnership is the most common type of partnership and is similar to a sole proprietorship except for the number of owners. Partners may invest equal or unequal sums of money.

Cosmetics pioneer Estee Lauder said of her success in the cosmetics​ industry, "I never dreamed about success. I worked for​ it." Which basic factor of small business success does this BEST​ describe?

Hard​ work, drive, and dedication --- Small business owners must be committed to succeeding and willing to spend the time and effort to make it happen.

Juan is about to start his own business from scratch and needs to study the market to determine how to create his business plan for the bank. He knows that his location is appropriate for what he wants to sell and to whom he wants to sell. He knows where other stores that sell similar products​ are, how they are​ doing, and how much he needs to charge to make a profit and appeal to customers. Which question does Juan still need to​ answer?

How much will the customers paid for the product

After working for a large firm for several​ years, Tyler started his own landscaping design business.​ However, he soon ran out of money and was forced to close the business because he​ couldn't pay the expenses of the firm along with his personal expenses. Based on this​ information, what is the likely reason for​ Tyler's business​ failure?

Insufficient capital

Tim and Ryan each have their own​ business, and together they are starting a new company that uses the best competencies of both their companies. The new organization will remain separate from their existing companies. Which of the following BEST describes their new​ endeavor?

Joint venture -A joint venture occurs when partners share ownership of what is essentially a new venture.

Ryan invested money in a new​ business, but does not have time to help run the company. He is not going to be part of running the​ business, and is only liable for debt up to the amount he invested. Which type of partner is​ Ryan?

Limited partner

Sam and Henry want to open a restaurant. Henry is willing to contribute​ start-up capital to the business but wants to have no role in the​ day-to-day operation of the restaurant. Which form of business ownership would be most appropriate for​ them?

Limited partnership

James is excited about opening a new microbrewery in town.​ However, he has several concerns. He has cash flow to buy or rent the needed equipment and​ facilities, but is worried about paying bills while the microbrewery becomes established. James is worried about having a partnership because he​ doesn't want to give up creative control. He also wants to avoid corporate taxes and selling stock because he is concerned about not being able to react quickly to changes in the market. What type of company should James set​ up?

Limited partnership - -- A limited partnership allows a partner to invest money but not take an active role in the business operations. This type of partnership would be ideal for James.

In​ 1957, Fred Morrison began selling a plastic disc for throwing called the​ Pluto-Platter. He sold the rights to the​ Pluto-Platter to a small​ start-up company called​ Wham-O in 1958. Upon a visit to a college campus where the students were throwing Frisbie Pie Company pie tins and calling​ out, "frisbie!" the entrepreneurs behind the​ Wham-O Company rebranded their product as the Frisbee and sold​ millions, cashing in on the craze that had swept college campuses. What is the MOST LIKELY reason for​ Wham-O's success?

Market demand - Even though it might look as if the owners​ Wham-O got​ lucky, it was actually hard​ work, drive,​ dedication, and,​ ultimately, demand for the product that made them successful. Venture capital and business loans provide temporary cash for​ operations, but it is sales of products and services that make a business model​ successful, and sales are based on consumer demand.

Although sheets and comforters and other bedroom accessories represent an established​ market, entrepreneurs in this industry may be able to gain a competitive advantage if they can exploit a​ _________.

Niche

Brooke believes that there are many consumers who would like pizza delivery companies to deliver movies and popcorn along with their pizza. Brooke is looking at what type of​ market?

Niche -- A niche is a segment of a market that is not currently being exploited. In​ general, small entrepreneurial businesses are better at discovering these niches than are larger organizations.

In contrast to stereotypes of entrepreneurs of the​ past, today's entrepreneurs are often​

Open minded leaders - Today's entrepreneur is seen as an​ open-minded leader who relies on​ networks, business​ plans, and​ consensus, and is just as likely to be female as male.

Your boss is excited about the prospect of expanding into China to take advantage of that growing market and has asked you to advise a new global marketing department. What is the first action that you would​ recommend?

Perform extensive market research. --- Market research should reveal whether there is demand for your product in​ China, and if​ so, how to adapt the product and the marketing strategies to fit the culture. For​ example, in​ China, tea is much more widely consumed than​ coffee, so Starbucks had to rethink their marketing strategy before they even considered how to enter that market.

More than half of all new businesses will fail in the long run. Which of the following is NOT a general factor in small business​ failure?

Repayment of franchise fees

Which of the following would likely NOT be a characteristic of a successful​ entrepreneur?

Risk aversion - Entrepreneurs are those who assume the risk of business​ ownership; accordingly, they must be willing to deal with uncertainty and risk.

Which type of corporation is organized like a corporation but treated like a partnership for tax​ purposes?

S corporation

In which step of the business plan will the entrepreneur describe the match between his abilities and experiences and the requirements for producing or marketing the​ product?

Setting Goals and objectives

Which of the following is the term for all owners of a​ corporation?

Shareholders

Which form of international expansion involves the development of a mutually beneficial partnership with a company in a foreign​ country?

Strategic alliance

Owen works at a bike shop in a popular tourist town.​ However, he feels that the owner is missing an opportunity by not renting bikes to tourists. Owen is considering leaving his job and starting his own bike shop that will offer rentals as well as bikes for purchase. What distinctive competency of small business is Owen​ displaying?

The ability to identify new niches in established markets - A niche is a segment of a market that is not currently being exploited. By renting bikes as well as selling​ them, Owen has created a niche that other bike sellers do not have.

Each of the following is a characteristic shared by most entrepreneurs​ EXCEPT?

They must see what they do as risky

According to​ studies, what is one of the MOST common reasons that women are starting their own​ businesses?

They want to set their own hours

Lee is a sole proprietor and owns a restaurant. When the economy​ falters, he is forced to close his restaurant and owes creditors nearly​ $24,000. The creditors can go after not only​ Lee's business assets but also his personal property such as his​ house, car, and personal bank account. This demonstrates the concept of​ ________.

Unlimited Liability

Which of the following is a disadvantage of a sole​ proprietorship?

Unlimited liability

Which of the following is required to be considered an​ entrepreneur?

You assume the risk of business ownership - Entrepreneurs are people who assume the risk of business ownership. Some entrepreneurs have a goal of independence and financial​ security, and others want to launch a new venture that can be grown into a large business

In​ 1908, when the first Ford Model T rolled out of the​ shop, there were few​ roads, few gas​ stations, and hardly anyone in the country could even afford an automobile. But Henry​ Ford, the entrepreneur who started the company in​ 1903, wanted to change all that. In those​ days, in order to​ persevere, he must have had​ _

a strong vision and passion - In 1908 there were more than​ 1,000 different automobile manufactures and little demand for automobiles because they were so expensive and unreliable. The Model T was the first​ reliable, affordable​ auto, but, as the letter designation​ implies, it​ wasn't Ford's first attempt. Cash and the thought of fame rarely motivate an entrepreneur to accomplish great things.​ It's more often passion and a strong vision of what could be.

The process of seeking business​ opportunities, typically under conditions of​ risk, is referred to as​

entrepreneurship -Entrepreneurship is the capacity and willingness to​ develop, organize, and manage a business​ venture, along with the risks of doing​ so, in order to make a profit.

Under a franchise​ agreement, the​ _______ grants the right to conduct business using its business​ model; the​ _______ owns and operates the local business.

franchiser; franchisee - The franchiser is the party granting the right to do business under its​ name, and the franchisee is the party purchasing the right.

A​ _______ is a business that is owned and usually operated by one person.

sole proprietorship