Entrepreneurship Exam 3 Study Guide
Which of the following offers a variety of products to two or more customer segments with different needs, even if the resulting markets are unrelated to one another?
diversified market
All businesses, regardless of size, need a formal business plan.
false
An entrepreneur must create a single business plan that will work for all audiences.
false
An introductory offer is a form of high-pricing, generally used for new products or services that face very little or even no competition.
false
Because of their personalities, entrepreneurs do not experience the emotional pain of failure.
false
Business models must be changed whenever a company launches a new product or service.
false
Deviance is an attribute of grit.
false
Entrepreneurs should try to address every potential customer in the market.
false
If your plan is not described in a formal document, chances are you do not really have a plan.
false
In general, reducing operating costs is the most effective way of yielding long-term gains.
false
In the content of grit, excellence is the commitment to long-term goals through purposeful deliberate practice.
false
It is important to remember that not all the questions in the TRIM framework must be answered.
false
Most businesses do not have a plan to get started.
false
Multi Sided markets describe a variety of services that serve two or more segments with very different needs or problems.
false
Studies have shown that people with a high IQ will be more likely to achieve success.
false
The all-benefits approach is the most impactful approach for creating a value proposition because of its large focus on the product.
false
The business model is just about revenue and costs.
false
The purpose of the feasibility study is to provide a short-term plan for launching your business.
false
What are the four major categories of problems experienced by customers?
lack of time, lack of money, lack of skill, lack of access
Gift Prescriptions is a company that offers small gifts that can be left behind in doctor's offices. Gift Prescriptions sells their gifts to pharmaceutical companies, therapists, and medical supplies stores who want to leave their doctors a small gift in appreciation for their time. Gift Prescriptions' market segment would be described as a ____.
niche market
The cost of running the business, including rent, utilities, administration, salaries, marketing, etc., is referred to as which of the following?
operating expenses
Which of the following is the role of the broker in an intermediate revenue model?
organize transactions between buyer and seller
What is described in the business concept part of the business plan?
the industry, structure, products, and services
What is the primary source of revenue for Skype, a company that offer free online video and phone service?
the money they charge for Skypeout, the service that calls land lines and cell phones
According to Dan Roam, author of The Back of the Napkin, we can visually solve problems with pictures.
true
According to the text, you won't be able to decide whether a business plan is viable until you have talked to at least 50 potential customers.
true
Amazon serves a diversified market because it has multiple products and services that serve several unrelated groups of customers.
true
An advertising revenue model gets revenue through advertising products and services.
true
Coke and Pepsi are examples of companies that address the mass market
true
Cultural differnces may influence the way we approach failure.
true
Experimentation is a form of planned failure that is necessary for achieving goals.
true
In an income statement, taxes are the last expense item before net income.
true
Proctor and Gamble didn't need to change its business model to accommodate the success of the Swiffer brand because it fit squarely with its existing model.
true
Real estate brokers represent an intermediation revenue model because they help manage the transaction between the home seller and the home buyer.
true
Regardless of the type of business, all businesses need to generate revenue.
true
The income statement is a report that measures the financial performance of your business on an annual or monthly basis.
true
The operating profit represents the amount left over from revenue once all costs and operating expenses are subtracted.
true
A mobile telephone company charges a base fee plus additional minutes for data usage. What revenue model is demonstrated in this example?
utility and usage revenue model
What is the left side of the BMC focused on?
value delivery
This method of pricing involves pricing the product base don how it benefits the customer:
value-based pricing
This method of pricing involves pricing the product based on how it benefits customers:
value-based pricing
The document created through the Vivid Vision exercise should be no more than ___page(s) long.
3
What is the relationship between the business plan and the business model?
A business plan supports the business model, explaining how to attain the model's goals.
The formal document that provides background and financial information about the company, outlines your goals for the business, and describes how you intend to reach them is called the
Business model (wrong)
When determining your revenue stream, what question should you ask yourself?
How much are my customers willing to pay?
Which of the following is necessary for an effective CVP?
It must have the ability to perform over a considerable length of time.
Which of the following is necessary for an effective customer value proposition (CVP)?
It must offer better value than the competitors
Which is true of back of the napkin plans?
They help clarify and communicate ideas
A plan is a written description of the future you envision for your business, including what you plan to do and how you plan to do it.
True
Grit combines with deliberate practice to help the entrepreneur achieve success.
True
Researchers have suggested that the origins of fear of failure may lie in parent-child relations.
True
The pitch deck is a presentation highlighting the essential elements in a feasibility study and business plan.
True
The planning exercise that involves getting out of your usual working environment and imagining what the business could look like in three years is called ___.
Vivid Vision
Infrastructure can be thought of as ____.
all the resources that are needed to deliver the CVP
Infrastructure can be thought of as ______.
all the resources that are needed to deliver the CVP
Which of the following types of plans is the simplest?
back of a napkin
This pricing strategy packages goods together at a lower price than if they were sold separately.
bundled pricing
A document that can easily be sent to stakeholders that will give them an at-a-glance understanding of who you are, the business, and its potential, is called the ____.
business brief
A two to three page document outlining the company's value proposition, customers, and milestones is referred to as a ____.
business brief
A document that can easily be sent to stakeholders that will give them an at-a-glance understanding of who you are, and its potential, is called the ___.
business model
In this pricing strategy, customers are asked how much they would pay for the product
customer led
Which of the following BMC elements refers to building positive feeling about your business and customer loyalty?
customer relationships
Under the business model canvas (BMC), what components are related to customers?
customer segments, channels, and customer relationships
What areas would be explored under the "I" phase of TRIM planning?
deciding what trends support the business or product idea
Who is the primary audience for the pitch deck?
early investors
The razor-and-razor-blade model is an example of an intermediation revenue model.
false
There are 10 components of the business model canvas.
false
To have an effective CVP for your business plan, it must offer better value than the competition.
false
A document of no more than 10 pages, this tool answers essential questions with data from interactions with potential cutsomers, suppliers, distributors, and others.
feasibility study
A business model:
focuses on how the product or service will serve a market need
What can be sold as unit sales?
food and beverages, digital products, software support offered by the hour
The component of revenue that is addressed when a company offers a frequent shopper an award is:
frequency
Which of the following is recommended when presenting your plan?
give the best-case scenario for your business in order to attract others (wrong)
"What problem is being solved?" is a key question to ask when determining the ___ of your TRIM framework.
idea
Santiago is paying close attention to writing a statement that expresses how his product solves a specific need. What are of TRIM planning is Santiago addressing?
idea
In which revenue model do third parties such as brokers generate money?
intermediation revenue model
What major customer problem did MinuteClinic solve in their CVP?
lack of time
Which of the following is the role of the broker in an intermediation revenue model?
organize transactions between buyer and seller
The ___ approach to CVP involves identifying and promoting all the benefits of your product or service to the competition and recognizes your offering is unique and different from others in the market.
points of difference
A type of approach that focuses on the product or service relative to the competition and how the offering is different from other son the market is known as the ____.
points of difference approach
In target-return pricing, the cost is determined by which of the following:
pricing is based on how much you have invested in your business
Joe owns a construction company and prices his services based on labor hours and the cost of material. Which of the following revenue models is Joe using?
professional revenue model
A grocery store offers cans of vegetables at 10 for $10. This is most likely which of the following pricing strategies?
psychological pricing
Which of the following is considered the "gold standard" of a CVP?
resonating-focus approach
A company's plan for how it will earn income and generate profits is called the ____.
revenue model
A form of pricing high, this strategy is used for new products that have no competition:
skimming
What is the least beneficial way to develop a business idea?
start the business
According to the text, it is typically easier for new businesses to chnage their business model because new businesses _____.
tend to be smaller and more agile
What distinguishes a business plan from other forms of business planning?
the business plan is more formal
Depreciation can be thought of as
the cost of wear and tear on physical assets such as equipment
Depreciation can be thought of as:
the cost of wear and tear on physical assets such as equipment
What is done throughout the Vivid Vision exercise?
the entrepreneur envisions how he or she is going to build the business and the steps needed to get there (wrong)
What are the benefits of using visuals in a business plan?
they are a good way to break up the text
A revenue model explains how an entrepreneur will make money from the customer value proposition.
true
According to Angela Lee Duckworth, grit is the quality that enable people to work hard and sustain interest in their long-term goals.
true
What is the term used in the text to describe a rough sketch of a basic business plan on any available paper?
a back of the napkin plan
What is described in the Marketing Plan section of the business plan?
a description of potential customers and competitors
Which of the following is most likely to have a diversified market?
a dollar store that promotes its low prices (wrong)
What would be the best definition of a business model?
a framework that describes how a company creates, delivers, and extracts value
Which of the following refers to pricing a product or service above its market value to cover the cost of giving a product away for free or for a market discount?
direct cross-subsidies