Management Midterm; Chapter 5
In a _____, the entrepreneur summarizes the business strategy and how that strategy is to be implemented. a) Market summary b) Mission statement c) Business plan d) Cost-benefit analysis e) Business environment analysis
C
More than any other industry, the _____ industry lends itself to big business. a) Insurance b) Wholesale c) Manufacturing d) E-tailing e) Retail
C
The Red Wagon Utility Store sells home supplies to residents on Charlton Street. It operates in the _____ industry. a)Wholesale b) Service c) Retail d) Manufacturing e) Finance
C
A _____ is a segment of a market that is not currently being exploited. a) Niche b) Merger c) Divestiture d) Stock e) Share
A
Identify an accurate comparison between small businesses and large businesses. a) Small businesses are better than large businesses in identifying niches. b) Small businesses can compete better on the basis of economies of scale than large businesses. c) Small businesses perform better than large businesses in manufacturing industries. d) Small businesses dominate high-investment industries more than large businesses. e) Large businesses are usually better at identifying new markets than small businesses.
A
Identify an accurate statement about small businesses and large businesses. a) Most of the products made by big manufacturers are sold to consumers by small businesses. b) Innovations are least likely to come from small businesses. c) Large businesses are likely to eliminate jobs at a far higher rate than small businesses. d) Large businesses hire at a much faster rate than small businesses. e) Large businesses consistently supply the majority of all "innovations" introduced into the U.S. marketplace each year.
A
One disadvantage of hiring management consultants to solve problems in business is that: a) Management consultants are expensive and charge high fees for their services. b) Most management consultants do not provide objective opinions. c) Management consultants can be of little help to businesses in the manufacturing industry. d) Management consultants can only provide suggestions for general administrative issues. e) It is very difficult to find consultants who specialize in one area.
A
Ryan has started a store where customers can find a wide range of organic products manufactured by different companies. Ryan's business is in the _____ industry. a) Retail b) Service c) Finance d) Manufacturing e) Wholesale
A
Small businesses: a) Are a key source of new jobs in various industries. b) Are not present in the technology sector. c) Are least likely to lay off workers during economic downswings. d) Employ 0.2 percent of all workers in the United States. e) Hire at a slower rate than large companies during economic recovery.
A
Which of the following factors is responsible for the failure of a small business? a) Managerial inexperience b) Strong control systems c) Excess capital d) Entrepreneurial competence e) Complacency among competitors
A
Which of the following is a true statement about small businesses? a) Small businesses are the first to hire in times of economic recovery. b) Small businesses provide the least scope for innovation. c) Small businesses are the last to lay off workers during economic downswings. d) Small businesses employ less than 2 percent of all workers in the United States. e) Small businesses do not have a presence in the technology sector.
A
Which of the following is an advantage of buying an existing business? a) Established supplier relationships b) Increased customer loyalty c) Freedom to choose locations d) Opportunity to develop new inventories e) Minimal production costs
A
A wholesale business buys products from producers and then sells them to _____. a) Other manufacturers b) Retailers c) End-users d) Customers e) Government regulators
B
Edinberg Animal Hospital is a veterinary clinic. It operates in the _____ industry. a) Wholesale b) Service c) Retailing d) Manufacturing e) Finance
B
Nokia and Samsung make cell phones. They operate in the ____ industry. a) Construction b) Manufacturing c) Finance d) Service e) Wholesale
B
Which of the following is an advantage of starting a business from scratch? a) The entrepreneur can easily estimate product sales. b) The entrepreneur is free to choose inventories and locations. c) Potential buyers have a clear idea of what products to expect from the venture. d) The risks involved are lesser. e) The entrepreneur is relieved of the task of identifying markets.
B
The most significant disadvantage of a franchising agreement is that: a) The franchisee is required to create an operations process from scratch. b) The risks involved in franchising are higher compared to starting a business from scratch. c) The franchisee may have to pay a high start-up cost. d) The franchisee will have to set up the business from scratch. e) The franchisee does not receive any management consultation.
C
Which of the following is an important question that is answered in a business plan? a) What are the marketing strategies used by the entrepreneur's competitors? b) What are the trade restraint strategies used by businesses in the external environment? c) What are the entrepreneur's goals and objectives? d) What are the overhead costs of the entrepreneur's venture? e) How will the entrepreneur divest strategic business units?
C
Dan wants to start a supermarket in his hometown, and wants to get into the business only after finding out about the market and how successful his business might be. The best way for Dan to gain knowledge is to: a) Take advice about the market from his friends and relatives. b) Conduct a consumer survey. c) Study the history of the world's famous supermarkets to get an idea of how to go about the business. d) Work in a supermarket before starting his own. e) Start the business on a small scale and test the market, and then expand the business by selling more of the products with greater demand.
D
Entrepreneurs: a) Are essentially limited partners in a business venture who assume minimal risks. b) Do not directly participate in the operation of a business venture. c) Are individuals who invest in promising start-ups established by others. d) Are involved in planning and organizing activities of a business venture. e) Are individuals who exclusively start non-profit organizations.
D
____ are a group of small investors seeking to make profits on companies with rapid growth potential. a) Entrepreneurs b) Hierarchical allies c) Strategic allies d) Venture capitalists e) Banks
D
_____ is a general factor that contributes to the success of small businesses. a) Escalation of commitment b) External locus of control c) Satisficing d) Managerial competence e) Self-dealing
D
Mortgage companies, and pawnshops operate in the _____ industry. a) Wholesale b) Retail c) Services d) Manufacturing e) Finance
E
Angela runs a babysitting referral agency. Her work involves referring reliable and qualified babysitters to busy parents on a monthly, weekly, or hourly basis. She earns money by charging a nominal referral fee to the parents, and gets commissions from the babysitters for referring them. Angela's business operates in the _____ industry. a) Service b) Retail c) Wholesaling d) Finance e) Insurance
A
Which of the following is a disadvantage of buying an existing business? a) Potential buyers have less clarity on what to expect from the venture. b) The entrepreneur may suffer the ill effects of a prior owner's errors. c) The task of predicting sales becomes more difficult. d) The task of identifying customers becomes more difficult. e) The risks involved are higher.
B
Which of the following is a disadvantage of franchising agreements? a) The franchisee cannot use the trademarks and business plans. b) The franchisee loses some independence in running the venture. c) The franchiser does not get any investment from the franchisee. d) The franchisee must establish management and operation processes from scratch. e) The franchiser has no control over what products the franchisee sells.
B
Pet care salons, skin clinics, and day care centers are all examples of businesses operating in the _____ industry. a) Retail b) Service c) Manufacturing d) Construction e) Finance
B
Which of the following is the the most important source of money for individuals starting up new businesses? a) Strategic alliances b) Government loans c) Personal resources d) Banks and private investors e) Venture capital companies
C
Entrepreneurs: a) Generally choose manufacturing over retailing. b) Use economies of scale as a competitive advantage to compete with large businesses. c) Typically do well in manufacturing rather than service businesses. d) Generally dominate industries that require more resources and high investment costs. e) Are usually better at discovering new markets than are larger, more mature organizations.
E
Which of the following statements is true about small businesses in the United States? a) Small businesses hire at a slower rate than big companies. b) Technology is the only sector in which small firms have no presence. c) Small businesses are the last to lay off workers during economic downswings. d) There are very few small firms in the United States. e) Most U.S. workers are employed by small firms.
E*
Which of the following is an advantage of a franchising agreement? a) The franchisee is not required to pay a start-cost. b) The franchisee can easily establish a business with reduced risks. c) The franchisee enjoys maximum independence in running the venture. d) The franchisee gets to modify the franchiser's products. e) The franchisee can create an individual identity in the community.
B
Which of the following statements is true about a franchise agreement? a) The franchisee is free to modify the franchisor's products. b) The franchisee can consult the franchiser for managerial and financial help. c) The franchisee and not the franchiser takes the responsibility of marketing and advertising activities. d) The franchisee can keep all the profits made by the venture. e) The franchisee does not have to pay a start-up cost for the venture.
B
Which of the following statements is true about small businesses? a) They constitute 2 percent of all businesses in the United States. b) The vast majority of small firms are owner-operated. c) Small businesses are least likely to lay off workers during economic downswings. d) Small businesses hire at a slower rate than large companies. e) Most small businesses in the United States have more than 500 employees.
B
Samantha runs a store that exclusively sells handmade vegan cosmetics. The store has a wide range of products manufactured by different companies. The store is relatively small in size and Samantha did not have to invest a lot in it. She knows that only a small segment of customers buy such products and she exclusively focuses on them. Which of the following can be inferred from the scenario? a) Samantha runs a wholesale store. b) Samantha uses a niche strategy in the retail industry. c) Samantha uses a cost leadership strategy in the service industry. d) Samantha uses a product differentiation strategy in the manufacturing industry. e) Samantha uses a market penetration strategy in the manufacturing industry.
B
Which of the following statements is true about sources of financing for entrepreneurs? a) Banks and government loans provide much larger portions of start-up funds than the personal resources of owners. b) Lending institutions such as banks are more likely to help finance the purchase of an existing business than a new business. c) Getting money from banks and government loans is an easy task for business owners. d) Business owners have to spend very little time in business plans and other documents while borrowing money from banks. e) Government loans have flexible eligibility guidelines to encourage entrepreneurship among the general public.
B
Marianne, who has started a software development firm, is looking for sources of financing. Marianne has approached Zenith LLC., a large consulting firm, to partner with her venture. Zenith has agreed to partner with Marianne's venture and provide it with capital. In this scenario, Marianne's source of financing falls in the category of: a) Personal resources. b) Government loans. c) Strategic alliances. d) Small Business Administration loans. e) Venture capital companies.
C
Which of the following is true of small businesses? a) Small business hire a minimum of 200 employees. b) Small firms constitute 2 percent of all businesses in the United States. c) Small businesses have a strong presence in the economy of the United States. d) Small businesses have no presence in the technology sector. e) Small businesses hire at a much slower rate than big businesses during economic recovery.
C
Henry discovered and added a new flavor of ice cream to his menu of homemade ice creams in the ice cream parlor he owns in Florida. The ice cream became an instant hit; he plans to sell the ice cream in Georgia by supplying it to the retailers there. Henry is involved in _____. a) Divesting b) Harvesting c) Identifying a niche in an emerging market d) Identifying an established market e) Identifying a new market
E
Identify an advantage of a franchising agreement. a) The franchiser gets all the profits made by the franchisee venture. b) The franchisee has scope for innovation and can modify products. c) The franchiser does not have to help the franchisee manage the venture. d) The franchisee does not have to pay a start-up cost. e) The franchiser can grow rapidly from franchising agreements.
E
Jason has started a restaurant of his own. He makes all the major operational decisions and is completely liable for the profits and losses the restaurant makes. Jason is most likely to be a(n): a) SCORE volunteer. b) First-line manager. c) Angel investor. d) Venture capitalist. e) Entrepreneur.
E
Sarah has started a day care center of her own. She makes the major decisions about how the center runs, what services it provides, and at what prices. She has funded the venture with her own savings and will be taking up complete responsibility of the success or failure of the venture. Sarah is most likely a(n) _____. a) Commercial financer b) Retailer c) Venture capitalist d) Angel investor e) Entrepreneur
E
Small businesses: a) Dominate industries that require more resources. b) Are the last to lay off workers during economic downswings. c) Provide fewer innovations than large companies. d) Hire at a lower rate than large employees. e) Provide big businesses with many of the services they need.
E
Which of the following statements is true about the service industry? a) The service industry provides no scope for developing niche strategies. b) The service sector is dominated by large companies that prevent small businesses from entering the industry. c) The service industry provides low returns on the time invested. d) Service businesses require more resources than any other industry. e) Service businesses are the fastest-growing segment of small-business enterprise.
E
Who among the following is most likely to be an entrepreneur? a) Rebecca works as an operations manager at Omega Corp. b) Kevin is a student who also writes for a magazine. c) Anita works for a non-profit organization. d) Jordon has invested a small amount of money in Libra Inc. which is a large corporation. e) Mariam has taken a loan to fund her new café.
E
A _____ is privately owned by one individual or a group of individuals and has sales and assets that are not adequate enough to meaningfully influence its environment. a) Publicly held corporation b) Regulatory agency c) Non-profit organization d) Strategic business unit e) Small business
E
