Chapter 7

21. A type of generic strategy aimed at clarifying how one product is unlike another in a mass market refers to _____ strategy. A. differentiation B. cost C. integration D. focus

A. differentiation

15. Changes in competitors, sales and profits in an industry over time is called A. industry dynamics. B. retrenchment. C. a shake-out. D. a transformational competency.

A. industry dynamics

8. Which are the two major classification systems that code industries? A. NAICS and SIC B. SCALE and SCOPE C. SWOT and VRIO D. SIC and SWOT

A. NAICS and SIC

24. The first thing that Amy and her friends need to do to pursue their strategy is to perform A. an industry analysis. B. a SWOT analysis. C. a VRIO analysis. D. a value chain analysis.

A. an industry analysis

14. Cost benefits can come from all of the following EXCEPT A. credit. B. scale savings. C. learning. D. organizational practices.

A. credit

4. The second step of the small business strategy planning process is considering with _____ A. customers; benefits. B. competitive advantage; value chain analysis. C. prestrategy; VRIO analysis. D. benefits; industry analysis.

A. customers; benefits

22. In SWOT, strengths are A. chances to make greater sales or profits in the environment. B. characteristics of the business that give it an advantage over others in the industry. C. elements in the environment that could cause trouble for the business. D. characteristics that place the firm at a disadvantage relative to others.

B. characteristics of the business that give it an advantage over others in the industry

23. Which of the following refers to the particular way a firm implements customer benefits that keeps the firm ahead of other firms in the market? A. Industry analysis B. Competitive advantage C. Resource distribution D. Value chain

B. competitive advantage

18. Which of the following refers to funds left over after deducting the cost of goods sold? A. Profit before taxes B. Gross profit C. Net profit D. Rate of profit

B. gross profit

2. Most small businesses are more _____ than _____. A. cost-directed; profit-directed B. imitative; innovative C. customer-driven; employee-driven D. innovative; imitative

B. imitative; innovative

26. Using the degree of similarity, Amy's concept of laundromat with a workout space can be described as A. parallel competition. B. incremental innovation. C. cloning. D. mass differentiation.

B. incremental innovation

3. The first step of the small business strategy planning process A. involves performing a SWOT. B. involves reviewing and confirming the prestrategy decisions that define your firm and your goal for it. C. is where you consider your customers and the benefits you want to offer them. D. is to study the dynamics and trends of your industry.

B. involves reviewing and confirming the prestrategy decisions that define your firm and your goal for it

7. An opportunity that makes it possible for a new business to gain a foothold in a market refers to A. parallel competition. B. incremental innovation. C. entry wedge. D. altruism.

C. entry wedge

1. When performing a SWOT analysis, where Amy's business threats meet her business weaknesses, what should her strategy option be? A. Fix B. Fight C. Flee D. Flaunt

C. flee

6. The fourth step of the small business strategy planning process A. is where you consider your customers and the benefits you want to offer them. B. aims to refine your firm's capabilities in order to maintain a competitive advantage. C. involves determining the best strategic direction and strategy for the firm. D. is to study the dynamics and trends of your industry.

C. invovles determining the best strategic decision and strategy for the firm

12. What types of customers are likely to generate more potential customers than any other type? A. Loyal customers B. Local customers C. Passionate customers D. Corporate customers

C. passionate customers

11. _____ refers to the size of the market whereas _____ refers to its geographic range. A. Scope; scale B. Mass; niche C. Scale; scope D. Niche; mass

C. scale; scope

19. A research process that provides the entrepreneur with key information about the industry, such as its current situation and trends is called A. SWOT analysis. B. VRIO analysis. C. value chain analysis. D. industry analysis.

D. industry analysis

5. The tool appropriate for the third step of the small business strategy process to study the dynamics and trends of your industry is the A. value chain analysis. B. SWOT analysis. C. VRIO analysis. D. industry analysis.

D. industry analysis

9. An overall strategic approach in which a firm seeks to do something that is very different from that of what others in the industry are doing is called a(n) A. cost-leadership strategy. B. imitative strategy. C. grand strategy. D. innovative strategy.

D. innovative strategy

13. Value benefits can include all of the following EXCEPT A. quality. B. style. C. delivery. D. learning.

D. learning

25. Identify the two market decisions that Amy and her friends need to make. A. Imitation and innovation B. Local or global C. Mass or niche D. Scale and scope

D. scale and scope

16. Which of the following represent the five stages of industry life cycle? A. Introduction, growth, maturity, decline, and death. B. Introduction, pioneers, early adopters, decline, and death. C. Pioneers, growth, early adopters, decline, and death. D. Pioneers, early adaptors, late adopters, early majority, and death.

A. introduction, growth, maturity, decline and death

10. A(n) _____ is the business term for the population of customers for your products or services. A. market B. industry C. strategy D. SIC

A. market

20. The amount of money left after operating expenses are deducted for the business refers to A. net profit. B. gross profit. C. operating profit. D. earnings before tax.

A. net profit

17. A type of life cycle stage following a boom in which there is a rapid decrease in the number of firms in an industry is the A. shake-out. B. growth stage. C. maturity stage. D. decline stage.

A. shake-out

1. _____ is the idea and actions that explain how a firm will make its profits. A. Strategy B. Objective C. Mission D. Goal

A. strategy