MGMT 275 - Chpt.1-5

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? A) Candidate A: visionary, energetic, moderate risk taker B) Candidate B: seeks recognition, self-starter, creative C) Candidate C: visionary, high risk taker, energetic D) Candidate D: high risk taker, achievement-motivated, networker E) Candidate E: tolerant for ambiguity, seeks recognition, motivated primarily by money

A) Candidate A: visionary, energetic, moderate risk taker

________ is the process of determining whether a business idea is viable. A) Feasibility analysis B) Opportunity recognition C) Viability analysis D) Achievability analysis E) Scenario analysis

A) Feasibility analysis

In regard to patent activity (issuance), which of the following statements is correct? A) Small businesses outperform their larger counterparts. B) Small businesses underperform their larger counterparts. C) Small businesses and large businesses are relatively equal. D) Small businesses are not active in patent activity. E) Large businesses are not active in patent activity.

A) Small businesses outperform their larger counterparts.

Which of the following statements about target markets is incorrect? A) There is a distinct difference between a firm's industry and its target market. B) The challenge in identifying an attractive target market is to find a market that's large enough for the proposed business but is yet small enough to avoid attracting larger competitors. C) By focusing on a target market, a firm can usually avoid head-to-head competition with industry leaders and can focus on serving a specialized market very well. D) A target market is a place within a larger market segment that represents a narrower group of customers with similar needs. E) It's generally easier to find good information about a target market than an industry as a whole.

A) There is a distinct difference between a firm's industry and its target market.

Which of the following is not a recommended guideline for writing a business plan? A) To make the best impression, a business plan should follow an unconventional structure and stand out in some dramatic way. B) A business plan needs to project a sense of anticipation and excitement about the possibilities that surround a new venture. C) For most plans, 25 to 35 pages is sufficient. D) A business plan should look sharp, but not a lot of money should be spent on the physical appearance of the plan. E) Shy away from using a lot of boldfaced type, italics, clip art, and different font sizes and colors when preparing a business plan.

A) To make the best impression, a business plan should follow an unconventional structure and stand out in some dramatic way.

An opportunity has four essential qualities: A) attractive, timely, durable, and anchored in a product, service, or business that creates or adds value for its buyer or end user B) practical, opportune, appropriate, and anchored in a product, service, or business that is efficient and effective C) realistic, striking, timely, and anchored in a product, service, or business that is timely D) attention-getting, attractive, timely, and anchored in a product, service, or business that creates or adds value for its buyer or end user E) attractive, durable, resilient, and opportune

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

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: A) business plan B) feasibility analysis C) opportunity analysis D) industry analysis E) marketing plan

A) business plan

According to the textbook, which is the proper sequence of events in developing successful business ideas? A) opportunity recognition, feasibility analysis, development of a business plan B) feasibility analysis, opportunity recognition, development of a business plan C) development of a business plan, opportunity recognition, feasibility analysis D) feasibility analysis, development of a business plan, opportunity recognition E) development of a business plan, feasibility analysis, opportunity recognition

A) opportunity recognition, feasibility analysis, development of 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): A) virtual prototype B) concept visualization C) abstract prototype D) virtual design E) usability test

A) virtual prototype

There are two primary audiences for a business plan: investors and other external stakeholders and: A) officials with the SEC B) a firm's employees C) a firm's competitors D) a firm's customers E) public relations firms

B) a firm's employees

Netflix is an established firm that encourages and emphasizes entrepreneurial behavior throughout its various divisions. According to the textbook, Netflix practices: A) tactical entrepreneurship B) corporate entrepreneurship C) strategic entrepreneurship D) business entrepreneurship E) enterprise entrepreneurship

B) corporate entrepreneurship

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: A) brainstorming B) day-in-the-life research C) focus group D) survey E) customer advisory board

B) day-in-the-life research

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? A) marketing plan B) executive summary C) elevator pitch D) company description E) operations plan

B) executive summary

The ________ is a short overview of the entire business plan. A) summary statement B) executive summary C) managerial review D) founder's introduction E) abstract

B) executive summary

Which of the following was not identified in the textbook as one of the common traits and characteristics of entrepreneurs? A) has a strong work ethic B) intolerant of ambiguity C) visionary D) promoter E) decisive

B) intolerant of ambiguity

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. A) chance B) serendipitous C) traditional D) conventional E) opportune

B) serendipitous

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: A) observing how customers acted when buying their product B) studying industry trends C) conducting Internet research D) administering a concept test and a buying intention's survey E) hiring consultants to provide them advice

B) studying industry trends

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. A) safe harbor B) window of opportunity C) portal of entry D) doorway of opportunity E) safety zone

B) window of opportunity

Which of the following statements regarding business success (or failure) rates is correct? A) After four years, 15 percent of new businesses are still open. B) After four years, 25 percent of new businesses are still open. C) After four years, 50 percent of new businesses are still open. D) Two out of three businesses fail within the first four years. E) Nine out of ten businesses fail within the first four years.

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

Which of the following statements is incorrect regarding the personal characteristics of entrepreneurs? A) Some people think that entrepreneurs have a "sixth sense" that allows them to see opportunities that others miss. B) The extent and depth of an individual's social network affects opportunity recognition. C) Several studies show that prior experience in an industry actually blinds an entrepreneur to the recognition of new opportunities in the same industry. D) Creativity is the process of generating novel or useful ideas. E) The corridor principle states that once an entrepreneur starts a firm, he or she begins a journey down a path where "corridors" leading to new venture opportunities become apparent.

C) 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 marketing plan section of a business plan? A) The marketing plan focuses on how the business will market and sell its product or service. B) The two most important items to include in a marketing plan are (1) overall marketing strategy and (2) the nuts and bolts of marketing a firm's product in terms of product, price, promotion, and place. C) The best way to describe a company's marketing plan is to begin by talking about its competitors. D) A firm's marketing strategy refers to its overall approach for marketing its products and services. E) A firm's overall approach to marketing typically boils down to how it positions itself in its market and how it differentiates itself from its competitors.

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

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: A) enterprise focus B) innovative intensity C) entrepreneurial intensity D) creative intensity E) innovative concentration

C) entrepreneurial intensity

Which of the following is not an attribute of an attractive industry? A) is young rather than old B) is not crowded C) is late rather than early in its life cycle D) is important to the customer E) is fragmented rather than concentrated

C) is late rather than early in its life cycle

What section of the business plan deals with the day-to-day operations of a company? A) financial plan B) marketing plan C) operations plan D) industry analysis E) executive summary

C) operations 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: A) direct research B) derivative research C) primary research D) secondary research E) initial research

C) primary research

Which of the following is not one of the four areas of feasibility analysis discussed in the textbook? A) product/service feasibility B) financial feasibility C) societal feasibility D) organizational feasibility E) industry/market feasibility

C) societal feasibility

Which of the following is not an individual, group or institution that normally reads a company's business plan? A) board of directors B) potential alliance partners and major customers C) state and local government officials D) key recruits for jobs with the new firm E) rank-and-file employees

C) 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: A) weak-tie relationships B) horizontal-tie relationships C) strong-tie relationships D) multiple-tie relationships E) vertical-tie relationships

C) strong-tie relationships

A ________ market is a place within a larger market segment that represents a narrower group of customers with similar needs. A) secondary B) primary C) target D) parallel E) minor

C) target

Which of the following is not one of the five common myths about entrepreneurs? A) Entrepreneurs are tenacious. B) Entrepreneurs are moderate risk takers. C) Entrepreneurs should be young and energetic. D) Entrepreneurs love the spotlight. E) Entrepreneurs are born not made.

D) Entrepreneurs love the spotlight.

________ feasibility is an assessment of the overall appeal of the product or service being proposed. A) Consumer B) Industry/market segment C) Industry/market D) Product/service E) Purchaser/end-user

D) Product/service

Which of the following statements is incorrect regarding the economic impact of entrepreneurial firms in the United States? A) Small businesses outperform their larger counterparts in terms of patent activity. B) Small firms are providers of a significant share of the innovations that take place. C) According to a Kauffman Foundation survey, 92% of Americans say entrepreneurs are critically important to job creation. D) Small businesses employ just less than half of all private sector employees. E) Small businesses are the creators of most new jobs.

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

Operating leverage is highest in companies that have: A) a service rather than a manufacturing emphasis B) virtually no fixed costs C) equal variable costs and fixed costs D) a high proportion of variable costs relative to their fixed costs E) a high proportion of fixed costs relative to their variable costs

D) 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. A) opportunity tenet B) opportunity rule C) chance rule D) access principle E) corridor principle

D) access principle

The three primary reasons that people become entrepreneurs and start their own firms are to: A) gain prestige, realize financial rewards, and eliminate risk in their lives B) do what they were "born" to do, be their own boss, and gain prestige C) take big risks, be their own boss, and do what they were "born" to do D) be their own boss, pursue their own ideas, and realize financial rewards E) take advantage of government subsidies, pursue their own ideas, and realize financial rewards

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

The ability to notice things without engaging in deliberate search is referred to as: A) cognitive alertness B) cognitive awareness C) managerial alertness D) entrepreneurial alertness E) individual awareness

D) entrepreneurial alertness

A(n) ________ is a physical or digital repository for storing ideas. A) suggestion bank B) idea depository C) suggestion pool D) idea bank E) proposition pool

D) idea bank

A prototype is: A) a form of opportunity recognition B) a tool for evaluating the industry a new firm plans to enter C) a financial model D) the first physical depiction of a new product E) a tool for evaluating the organizational prowess of a new firm

D) the first physical depiction of a new product

According to the textbook, opportunities are: A) easy to spot B) easy to spot in fast growing industries but tough to spot in slow growing industries C) easy to spot in the manufacturing sector but tough to spot in the service sector D) tough to spot E) neither easy nor tough to spot

D) tough to spot

Alex has a number of casual acquaintances that he interacts with infrequently. The relationships that Alex has with these people are referred to as: A) strong-tie relationships B) moderate-tie relationships C) lateral-tie relationships D) weak-tie relationships E) multiple-tie relationships

D) weak-tie relationships

________ is the process of creating something new, which is central to the entrepreneurial process. A) Creative destruction B) Modernism C) Execution D) Creativity E) Innovation

E) Innovation

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? A) Download electronic games industry reports from the Internet. B) Administer a buying intentions survey. C) Administer a concept test. D) Look at the Web sites of a number of companies that sell electronic games. E) Spend several days in electronic games arcades and stores to observe the types of games tha attract the interest of middle school age and high school age boys.

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

________ are characterized by frequent interactions that form between coworkers, friends, and spouses. A) Balanced relationships B) Weak-tie relationships C) Lateral-tie relationships D) Moderate-tie relationships E) Strong-tie relationships

E) Strong-tie relationships

Which of the following statement is incorrect about business plans? A) Writing a business plan forces a firm's founders to systematically think through each aspect of their new venture. B) For most new ventures, the business plan is a dual-purpose document used both inside and outside the firm. C) A business plan is typically 25 to 35 pages long. D) A large percentage of entrepreneurs do not write business plans for their new ventures. E) The business plan should be written while the feasibility analysis is being completed.

E) 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? A) It is a short overview of the entire business plan. B) In many instances an investor will first ask for a copy of a firm's executive summary and will request a copy of the full business plan only if the executive summary is sufficiently convincing. C) It is arguably the most important section of the business plan. D) It should not exceed two single-spaced pages. E) The executive summary is the first thing that should be written in preparing a business plan.

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

There are two primary audiences for a business plan: A) a firm's employees and officials with the SEC B) a firm's customers and its competitors C) investors and other external stakeholders and public relations firms D) officials with the SEC and public relations firms E) a firm's employees and investors and other external stakeholders

E) a firm's employees and investors and other external stakeholders

An example of a valuable library resources is IBISWorld, which is a(n): A) business publication B) academic journal C) Census Bureau publication D) trade journal E) database of industry-related information

E) database of industry-related information

A(n) ________ is a favorable set of circumstances that creates a need for a new product, service, or business. A) idea B) scheme C) design D) proposal E) opportunity

E) opportunity

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: A) innovative, risk averse, and take a "wait and see" posture B) taking a "wait and see" posture, innovative, and risk taking C) proactive, not innovative, and risk taking D) taking a "wait and see" posture, not innovative, and risk averse E) proactive, innovative, and risk taking

E) proactive, innovative, and risk taking