Question 1

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

Accepted Answer

corporate

Question 2

According to the textbook, the number one reason that people become entrepreneurs is to:

Accepted Answer

be their own boss

Question 3

According to the textbook, entrepreneurs are ______ risk takers.

Accepted Answer

moderate

Question 4

Entrepreneurship is the process by which individuals pursue opportunities within the constraints of the resources they control.

Accepted Answer

false

Question 5

The number one characteristic shared by successful entrepreneurs is passion for their business.

Accepted Answer

true

Question 6

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

Accepted Answer

opportunity

Question 7

Which of the following is not an example of a social force?

Accepted Answer

changes in interest rates

Question 8

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

Accepted Answer

entrepreneurial alertness

Question 9

Studies have shown that prior experience in an industry helps entrepreneurs recognize business opportunities.

Accepted Answer

true

Question 10

The three ways to identify an opportunity include observing trends, solving a problem, and finding gaps in the marketplace.

Accepted Answer

true

Question 11

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

Accepted Answer

Feasibility analysis

Question 12

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

Accepted Answer

is late rather than early in its life cycle

Question 13

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

Accepted Answer

Societal feasibility

Question 14

The proper sequence for developing successful business ideas is to first conduct a feasibility analysis, then progress through the opportunity recognition stage, and finish with the completion of a business plan.

Accepted Answer

true

Question 15

Jennifer is thinking about starting a firm in the upscale women\'s fashion industry. To get a full appreciation of the competitive nature of the industry, and how she might position her products, Jennifer has spent considerable time looking at industry-related publications and ABI-Inform, which is a database that provides access to articles covering a wide-variety of business and industry related issues. Jennifer is conducting ________ research.

Accepted Answer

secondary

Question 16

Which of the following is the main purpose for writing a business plan?

Accepted Answer

The plan helps the company develop a \"road map\", or blueprint to follow; and, the plan introduces potential investors and other stakeholders to the business opportunity.

Question 17

There are two primary audiences for a business plan:

Accepted Answer

a firm\'s employees, and investors and other external stakeholders

Question 18

Which of the following statements is incorrect regarding business plans?

Accepted Answer

INCORRECT:To make the best impression, a business plan should follow an unconventional structure, so it will stand out.    A business plan has both an external and internal audience.    A company\'s business plan is typically written by its founders.    Potential investors are typically keenly interested in a company\'s business plan.

Question 19

Full business plans prepared for investors are typically 60-80 pages long.

Accepted Answer

False

Question 20

Fragmented industries are more receptive to new entrants than industries that are dominated by a handful of large firms.

Accepted Answer

true

Question 21

A(n) _____ is a group of firms producing a similar product or service, such as soft drinks, electronic games, or computers.

Accepted Answer

industry

Question 22

Industries that sell products to seniors, such as the eyeglass industry and hearing aid industry, are benefiting from the aging of the population, which is an important:

Accepted Answer

environmental trend

Question 23

John is thinking about starting a firm in the specialty chemical industry. In the industry analysis John has been conducting, one thing he has noticed is that the specialty chemical industry is characterized by the following factors: high supplier concentration, high switching costs for buyers when they switch from one supplier to another, and no attractive substitutes for the products that most of the suppliers provide. These factors concern John because they tell him that the profitability of the specialty chemical industry is suppressed by the:

Accepted Answer

bargaining power of suppliers

Question 24

Shelly recently launched a firm in the fruit drink industry, and has already exported her fruit drinks to 9 different countries. One thing 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.

Accepted Answer

multidomestic

Question 25

The best industry to enter is an industry where the threat of each of Porter\'s five-forces is low.

Accepted Answer

true

Question 26

In regard to business models, which of the following statements is incorrect?

Accepted Answer

There is a standard business model that most firms will follow.

Question 27

The _______ is the string of activities that moves a product from the raw material stage, through manufacturing and distribution, and ultimately to the end user.

Accepted Answer

value chain

Question 28

Kendra is starting a firm in the shoe industry. Her shoes will be very high quality and will be priced at the top end of the market. Kendra has chosen the generic strategy referred to as:

Accepted Answer

differentiation

Question 29

Jared is starting a firm in the electronic games industry. The firm will produce games similar to popular games on the market, but they won\'t be as sophisticated and will be priced at the low end of the market. Jared has chosen the generic strategy referred to as:

Accepted Answer

cost leadership

Question 30

Historically, it has been difficult for a new venture to use a differentiation strategy.

Accepted Answer

false

Question 31

Which of the following is the most important thing that an entrepreneur, or team of entrepreneurs, can do to build a strong ethical culture in their organization?

Accepted Answer

lead by example

Question 32

A(n) _______ is a written document that deals with issues such as the relative split of the equity among the founders of the firm, how individual founders will be compensated for the cash or the \"sweat equity\" they put into the firm, and how long the founder will have to remain with the firm for their shares to fully vest.

Accepted Answer

founders\' agreement

Question 33

Which of the following is a disadvantage of a C Corporation?

Accepted Answer

Income is subject to double taxation

Question 34

A disadvantage of a sole proprietorship is that it is subject to double taxation.

Accepted Answer

false

Question 35

The major difference between a general partnership and a limited partnership is that a limited partnership includes two classes of owners: general partners and limited partners.

Accepted Answer

true

Question 36

Which of the following was not identified as one of the four main financial objectives of a firm?

Accepted Answer

Timeliness

Question 37

Which financial statement records all of a firms revenues and expenses for a given period and shows whether the firm is making a profit or experiencing a loss?

Accepted Answer

Income Statement

Question 38

Kevin was reading the business plan of New Venture Fitness Drinks, and noticed that prior to its financial forecasts, New Venture Fitness Drinks placed an explanation of the sources of the numbers for the forecast and the assumptions used to generate them. This explanation is called a(n) _______.

Accepted Answer

Assumption Sheet

Question 39

Financial management deals with two things: raising money and managing a company\'s finances in a way that achieves the highest rate of return.

Accepted Answer

true

Question 40

A statement of cash flows is a snapshot of a company\'s assets, liabilities, and owners\' equity at a specific point in time.

Accepted Answer

false

Question 41

Gillian is in the process of launching an educational services firm. She plans to incorporate the firm. Because the firm will be a corporation, Gillian is legally required to have a ______.

Accepted Answer

board of directors

Question 42

A(n) __________ is a panel of experts who are asked by a firm\'s managers to provide counsel and advice on an ongoing basis.

Accepted Answer

advisory board

Question 43

Which of the following statements about advisory boards is incorrect?

Accepted Answer

Similar to a board of directors, an advisory board has legal responsibility for the firm in certain areas.

Question 44

A new venture team is the group of founders, key employees, and advisers that move a new venture from an idea to a fully functioning firm.

Accepted Answer

true

Question 45

Founding teams that have worked together before, as opposed to teams that are working together for the first time, have an edge.

Accepted Answer

true

Question 46

Jason\'s startup, which is in the electronics industry, was launched January 1, 2009. However, prior to its formal launch, Jason spent many hours working on his business, particularly during the feasibility analysis stage. The value of the time and effort that a founder puts into a new venture is referred to as _________.

Accepted Answer

sweat equity

Question 47

Lucas just opened a soup and salad restaurant. Rather than borrow money or raise funds from investors, Lucas used his creativity and ingenuity and figured out how to get his business up and running without the need for external funding. Lucas is utilizing a technique referred to as _______.

Accepted Answer

bootstrapping

Question 48

Which of the following is not a source of equity funding?

Accepted Answer

Government grants

Question 49

There are three reasons that most entrepreneurial ventures need to raise money during their early life: cash flow challenges, capital investments, and lengthy product development cycles.

Accepted Answer

true

Question 50

Typically, the seed money that gets a company started comes from a commercial bank.

Accepted Answer

false

Question 51

The first step in selecting a target market is to study the industry in which the firm intends to compete and determine the different potential target markets in that industry. This process is called __________.

Accepted Answer

market segmentation

Question 52

Once a firm has segmented the market, the next step is to ____________.

Accepted Answer

select a target market

Question 53

A(n) ______ is the set of attributes - positive or negative - that people associate with a company.

Accepted Answer

brand

Question 54

A firm\'s marketing mix is the assortment of products and services it sells.

Accepted Answer

false

Question 55

Many startups emphasize advertising over public relations primarily because advertising is cheaper and helps build the firm\'s credibility.

Accepted Answer

false

Question 56

Which of the following is an example of intellectual property?

Accepted Answer

Nike\'s swoosh logo

Question 57

There are two primary rules of thumb for deciding if intellectual property protection should be pursued for a particular intellectual asset. First, a firm should determine if the intellectual property in question is directly related to its competitive advantage. Second, a firm should determine if its intellectual property _____________.

Accepted Answer

has value in the marketplace

Question 58

Which of the following are the four key forms of intellectual property protection?

Accepted Answer

Patents, trademarks, copyrights, and trade secrets

Question 59

Utility patents are the most common type of patent and cover what we generally think of as new inventions.

Accepted Answer

true

Question 60

Computer software is not covered by copyright law.

Accepted Answer

false

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