entrepreneurship exam 1

________ is the process of creating something new, which is central to the entrepreneurial process.

Innovation

Which of the following statements about target markets is incorrect?

It's generally easier to find good information about a target market than an industry as a whole

Which of the following statements is incorrect regarding the marketing plan section of a business plan?

The best way to describe a company's marketing plan is to begin by talking about its competitors.

Which of the following statement is incorrect about business plans?

The business plan should be written while the feasibility analysis is being completed

Which of the following statements is incorrect regarding the executive summary of a business plan?

The executive summary is the first thing that should be written in preparing a business plan

A computer-generated image of an invention that displays the invention as a 3D model that can be viewed from all sides and rotated 360 degrees is called a(n)

virtual prototype

Suppose you are a Small Business Development Center counselor and you're looking at the personality profiles of five potential entrepreneurs. Based on the profiles, which individual has the most desirable mix of personal characteristics to become a successful entrepreneur?

visionary, energetic, moderate risk taker

Alex has a number of casual acquaintances that he interacts with infrequently. The relationships that Alex has with these people are referred to as

weak-tie relationships

Shelly Ford is starting a fashion boutique in an upscale mall near San Antonio. She wants to open her store during the time period in which a business like hers can realistically enter the new market. Shelly is trying to open her business while the ________ is open.

window of opportunity

Which of the following statements regarding business success (or failure) rates is correct?

After four years, 50 percent of new businesses are still open

Which of the following is not a recommended guideline for writing a business plan?

A business plan needs to project a sense of anticipation and excitement about the possibilities that surround a new venture

Which of the following is not one of the five common myths about entrepreneurs?

Entrepreneurs are tenacious.

________ is the process of determining whether a business idea is viable.

Feasibility analysis

________ feasibility is an assessment of the overall appeal of the product or service being proposed.

Product/service

Which of the following statements is incorrect regarding the personal characteristics of entrepreneurs?

Several studies show that prior experience in an industry actually blinds an entrepreneur to the recognition of new opportunities in the same industry.

Which of the following statements is incorrect regarding the economic impact of entrepreneurial firms in the United States?

Small businesses employ just less than half of all private sector employees

In regard to patent activity (issuance), which of the following statements is correct?

Small businesses outperform their larger counterparts

Corry Pierce is investigating the feasibility of a new type of electronic game targeting middle school and high school-age boys. Which of the following is an example of "gumshoe research" that Corry could conduct to get a sense of the likely demand for his game?

Spend several days in electronic games arcades and stores to observe the types of games that attract the interest of middle school age and high school age boys.

________ are characterized by frequent interactions that form between coworkers, friends, and spouses.

Strong-tie relationships

There are two primary audiences for a business plan: investors and other external stakeholders and

a firm's employees

There are two primary audiences for a business plan:

a firm's employees and investors and other external stakeholders

Operating leverage is highest in companies that have

a high proportion of variable costs relative to their fixed costs

Frank Patterson started a firm in 2011 that creates and manufactures accessories for Apple iPhones. He started with four accessories, and after several months added three new accessories that have been very successful. The fact that Frank recognized the opportunity for the three new accessories only after he started his firm and become immersed in the iPhone accessory industry is an example of the ________ at work.

access principle

An opportunity has four essential qualities

attractive, timely, durable, anchored in a product, service, or business that creates or adds value for its buyer or end user

The three primary reasons that people become entrepreneurs and start their own firms are to

be their own boss, pursue their own ideas, and realize financial rewards

The document that does the best job of introducing potential investors and other stakeholders with the business opportunity the firm is pursuing and how it plans to pursue it is the:

business plan

Each quarter, Cindy Anderson, who owns a chain of card and gift shops, does a detailed analysis of her firm's competitors. This analysis is called:

competitor analysis

Once a firm decides to enter an industry and chooses a market in which to compete, it must gain an understanding of its competitive environment. This challenge can be undertaken by completing a(n):

competitor analysis

Netflix is an established firm that encourages and emphasizes entrepreneurial behavior throughout its various divisions. According to the textbook, Netflix practices

corporate entrepreneurship

An example of a valuable library resources is IBISWorld, which is a(n):

database of industry-related information

To make sure that its customers are satisfied and to probe for new product ideas, Intuit routinely sends employees to the facilities of their customers. This technique for generating new business ideas is called

day-in-the-life research

Which of the following was not identified in the textbook as one of the common traits and characteristics of entrepreneurs?

decisive

According to the textbook, the first step in a competitor analysis is to:

determine who the competition is

According to the textbook, the three different types of competitors a business will face are

direct, indirect, and future

The ability to notice things without engaging in deliberate search is referred to as

entrepreneurial alertness

Apple Inc. is a firm that is proactive, innovative and risk-taking. From this description, we can most accurately conclude that Apple has a high level of

entrepreneurial intensity

Paul Hempken just spoke to an investor, who is interested in his business idea. Paul offered to send the investor a copy of his full business plan, but the investor asked for a short overview of the business plan instead. What portion of his business plan should Paul send the investor?

executive summary

The ________ is a short overview of the entire business plan.

executive summary

If a startup pioneers an industry or a new concept within an industry, the name recognition the startup establishes may create a formidable nontraditional barrier to entry referred to as a(n):

first-mover advantage

Katherine Chapman recently launched a firm in the clothing industry, targeting teens ages 13-17. One thing Katherine thinks she has accomplished is producing products that have universal appeal, so she will not vary her approach from country to country. Katherine is pursuing a ________ strategy.

global

A(n) ________ is a favorable set of circumstances that creates a need for a new product, service, or business.

idea

A(n) ________ is a physical or digital repository for storing ideas.

idea bank

Which of the following is not an attribute of an attractive industry?

is late rather than early in its life cycle

According to the textbook, entrepreneurs are

moderate risk takers

Firms that pursue a(n) ________ strategy compete for market share on a country-by-country basis and vary their product or service offerings to meet the demands of the local market.

multidomestic

Shelly James recently launched a firm in the fruit drink industry, and has already exported her fruit drinks to 9 different countries. One thing that Shelly's firm is doing is that it is varying the tastes of the fruit drinks it sells on a country by country basis to meet the demands of the local markets. Shelly's firm is pursuing a ________ strategy.

multidomestic

The Savvy Entrepreneurial Firm feature in Chapter 3 focuses on Bill Gross, and how a company he was leading, Knowledge Adventure, made a 180-degree turn on the positioning of a product. According to the feature, Gross and his team made the change as a result of:

observing how customers acted when buying their product

What section of the business plan deals with the day-to-day operations of a company?

operations plan

According to the textbook, which is the proper sequence of events in developing successful business ideas?

opportunity recognition, feasibility analysis, development of a business plan

Cameron Smith recently surveyed 200 of his classmates to get a sense of the demand for a new software product he is working on. Collecting data via a survey you administer yourself is referred to as:

primary research

Sarah Thorton is the founder of a company named Extreme Sports Apparel. The company makes apparel products for extreme sports enthusiasts such as rock climbers, triathletes, parasailors, and BMX bikers. Sarah wants her company to pursue a high level of corporate entrepreneurship. To achieve that goal, Sarah's firm should be

proactive, innovative, and risk taking

Some industries, like the athletic shoe industry, are dominated by a small number of firms with strong brands. These industries are difficult to break into without spending heavily on advertising. The barrier to entry that the firms in these types of industries have erected is referred to as:

product differentiation

Which of Porter's five forces is most directly influenced by the following factors: number and balance of competitors, degree of difference between products, growth rate of an industry, and level of fixed costs?

rivalry among existing firms

Sharon Simms is a very capable computer engineer. Recently, she noticed a problem that computer engineers have, and thought of a solution to the problem that might represent an opportunity for a new software product. Sharon's idea for a new software product is an example of a(n) ________ discovery.

serendipitous

Which of the following is not one of the four areas of feasibility analysis discussed in the textbook?

societal feasibility

Which of the following is not an individual, group or institution that normally reads a company's business plan?

state and local government officials

Most of Jacob's ideas come from interacting with coworkers, friends, his spouse, his parents, and other people that share the same beliefs that he does. Jacob is getting most of his ideas through

strong-tie relationships

A ________ market is a place within a larger market segment that represents a narrower group of customers with similar needs.

target

A prototype is:

the first physical depiction of a new product

Which of the following is an example of an industry-level factor as opposed to a firm-level factor?

threat of substitutes

According to the Global Entrepreneurship Monitor (GEM) 2007 study, the majority of people in high-income countries are drawn to entrepreneurship

to take advantage of an attractive opportunity

According to the textbook, opportunities are

tough to spot