Generally speaking, the opportunity recognition process consists of two phases

In the opening case, iSold It, a firm that helped others sell products on eBay, went from one of the fastest growing franchise businesses to a firm that saw a number of its franchises close and declining sales in a matter of months. What was a major challenge iSold It faced that led to these problems? A. It did not have the financial resources to maintain the rapidly growing firm.B. The company lacked knowledgeable executives in key positions.C. Its concept was rapidly imitated by others.D. It had weak operational systems and could not maintain control of the growing network of stores.

Its concept was rapidly imitated by others.

According to the text, for an entrepreneurial start-up to be successful, three ingredients are critical. What are they? A. good ideas, a team of investors, and a business planB. a viable opportunity, available resources, and a qualified and motivated founding teamC. an opportunity, a marketing plan, and office spaceD. management, marketing, and money

a viable opportunity, available resources, and a qualified and motivated founding team

Which of the following is a common source of new business opportunities? A. current or past work experiencesB. suggestions by family or friendsC. chance eventD. all of these

The process of identifying, selecting, and developing new venture opportunities is known as A. innovativeness.B. bootstrapping.C. opportunity recognition.D. brainstorming.

Generally speaking, the opportunity recognition process consists of two phases of activity. They are A. Global Search and Recycling Profits.B. Value Creation and Affordability.C. Discovery and Evaluation.D. none of these.

Discovery and Evaluation.

Which of the following is NOT one of the characteristics of an entrepreneurial opportunity? A. attractiveB. affordableC. achievableD. value creating

When an opportunity is attractive long enough for it to be successfully developed and deployed, it is said to be A. value creating.B. affordable.C. achievable.D. durable.

Which of the following terms is used to refer to opportunities that are practical and physically possible? A. durableB. valuableC. achievableD. sustainable

Financing for entrepreneurial start-ups includes which of the following? A. investments by family and friendsB. personal savingsC. private investorsD. all of these

Which of the following sources of entrepreneurial financing are available to ventures that have already started to conduct business and generate sales? A. bank financingB. venture capitalC. public financingD. all of these

The majority of entrepreneurial start-ups are financed with A. bank financing.B. public financing (e.g., SBA loans).C. venture-capital financing.D. personal savings and the contributions of family and friends.

D. personal savings and the contributions of family and friends.

Private individuals who provide seed capital to young ventures are known as A. angels.B. gazelles.C. cash cows.D. rising stars.

All of the following statements about venture capital are true EXCEPT A. entrepreneurs raise venture capital by selling shares of ownership in their business.B. venture capital is a form of public equity financing.C. venture capital is used to finance rapid growth or large capital expenditures.D. venture capital groups can often provide helpful management advice.

B. venture capital is a form of public equity financing.

Based on statistics reported in the text, which of the following statements is FALSE? A. Firms that obtain venture-capital funding receive an average of over $1 million each.B. Total investment in start-up firms averages about $80,000 in the firm's first year.C. Among the 100 fastest-growing new businesses identified by Entrepreneur magazine, 61 percent obtained start-up funding from personal savings.D. Ninety percent of the companies financed with venture capital funds fail.

D. Ninety percent of the companies financed with venture capital funds fail.

According to the text, new ventures launched by entrepreneurial teams are more likely to be successful than ventures launched by A. established corporations.B. bootstrappers.C. "lone wolf" entrepreneurs.D. all of these.

C. "lone wolf" entrepreneurs.

Which of the following types of resources contribute to the success of entrepreneurial firms? A. social capitalB. financial resourcesC. human resourcesD. All of these contribute to the success of entrepreneurial firms.

D. All of these contribute to the success of entrepreneurial firms.

__________ provide(s) a key avenue for growth for many young and small firms through partnering to obtain resources and/or expand into new markets. A. Strategic alliancesB. BootstrappersC. "Lone wolf" entrepreneursD. Research & development

The U.S. Small Business Administration supports small business through all of the following EXCEPT A. government contracting.B. underwriting loans.C. investing venture capital.D. training and counseling.

C. investing venture capital.

Which of the following is NOT one of the three characteristics of entrepreneurial leadership mentioned by the text? A. visionB. dedication and driveC. commitment to excellenceD. clarifying job responsibilities

D. clarifying job responsibilities

Why is vision such an important element of entrepreneurial leadership? A. Because the entrepreneur has to envision realities that do not yet exist.B. Because a vision statement must be part of the documentation used to obtain venture financing.C. Because organizations cannot function without a detailed and operational vision.D. All of these

A. Because the entrepreneur has to envision realities that do not yet exist.

Which of the following is NOT a common new entry strategy according to the text? A. imitative new entryB. adaptive new entryC. proactive new entryD. pioneering new entry

Seeking products or services that have been successful in one market and introducing the same basic product or service in another segment of the market is referred to as A. imitative new entry.B. adaptive new entry.C. proactive new entry.D. pioneering new entry.

Which of the following is NOT a key element of a blue ocean strategy? A. Pursue low cost and differentiation advantages simultaneously.B. Make the competition irrelevant.C. Highlight incremental improvements to capture market share.D. Create new demand in uncharted territory.

C. Highlight incremental improvements to capture market share

Cirque du Soleil is an example of a firm that successfully enacted a "blue ocean" strategy. Which of the following is a feature of the strategy it enacted? A. It developed its own musical scores for its circus performances.B. It discontinued traditional parts of the circus, such as animal acts.C. It researched customers to learn what circus features are more in demand.D. All of these.

"Doing more with less", by holding down costs or making more efficient use of resources is one of the ways entrepreneurs achieve success. This is an example of how entrepreneurs use A. an imitative strategy.B. a low-cost leader strategy.C. a differentiation strategy.D. a combination strategy.

B. a low-cost leader strategy.

Entrepreneurial firms that pursue a low-cost leadership strategy use which of the following to achieve lower costs? A. cost-saving technology such as the InternetB. simple organizational structuresC. rapid decision makingD. all of these

When an industry is mature, a __________ strategy is considered to be one of the most effective approaches for a new entrant. A. focusB. differentiationC. overall low-costD. small business

According to the text, all of the following might make it difficult for entrepreneurial firms to effectively pursue a strategy of differentiation EXCEPT A. incumbent firms are constantly seeking opportunities to specialize in market niches.B. differentiation strategies are often expensive to enact.C. it may be difficult for a young firm to establish a strong brand identity.D. implementing superior new technologies may be challenging for entrepreneurial firms.

A. incumbent firms are constantly seeking opportunities to specialize in market niches.

Intense rivalry involving actions and responses among similar competitors vying for the same customers in a marketplace is known as A. competitive dynamics.B. resource similarity.C. threat of substitutes.D. pioneering new entry.

Which of the following is NOT one of the reasons a company might launch new competitive actions? A. to obtain first mover advantagesB. to improve market positionC. to capitalize on growing demandD. to find new sources of raw materials

D. to find new sources of raw materials

Netflix CEO Reed Hastings made this important observation about dealing with rivals: A. "In a highly competitive marketplace, firms must be paranoid about the multitude of potential rivals."B. "You can afford to ignore rivals in small markets, but you can never ignore rivals in large markets, such as online video companies like YouTube."C. "There are tens and maybe hundreds of start-ups who think that they are going to eat Netflix's lunch. The challenge for a management team is to figure out which are real threats and which aren't."D. "Netflix's position is so strong that I don't worry about new entrants."

C. "There are tens and maybe hundreds of start-ups who think that they are going to eat Netflix's lunch. The challenge for a management team is to figure out which are real threats and which aren't."

Aircraft makers Boeing and Airbus have a high degree of __________ because they make very similar products and have many buyers in common. A. dynamic capabilitiesB. market commonalityC. first mover advantagesD. equity funding

The Wall Street Journal and the New York Times have seen the intensity of their rivalry increase. One factor driving this is that the Wall Street Journal has moved from financial news reporting to general national and global news reporting and finally, to adding local New York news. The rivalry of these two news providers has increased due to A. increased dynamic capabilities.B. increased market commonality.C. erosion of first mover advantages.D. the choice of tactical over strategic actions.

B. increased market commonality.

Which of the following questions should a firm ask itself before responding to a competitive attack? A. How serious is the impact of the attack?B. What is our competitive intent—do we want to blunt the attack or enhance our competitive position with our response?C. What resources do we have available for a response?D. All of these.

Which of the below best describes the competitive tendencies of small firms? A. Because they lack legitimacy in the marketplace, small firms tend to signal their competitive actions long before they launch those actions.B. Small firms typically have more resources available as they undertake competitive attacks than do large firms.C. Small firms are more nimble and can respond quickly to competitive attacks.D. All of these.

C. Small firms are more nimble and can respond quickly to competitive attacks.

Cirrus Aircraft, a leading manufacturer of small airplanes, sees a market opportunity and has decided to double its plant capacity over the next two years. What type of competitive action does this represent? A. A tactical action because the move is an attempt to fill a gap in service.B. A strategic action because such a large plant expansion will require a major commitment of resources.C. A strategic action because the firm can easily reverse the action at any time, thus giving Cirrus more strategic flexibility.D. A guerilla offensive because it is fast and will surprise its rivals.

B. A strategic action because such a large plant expansion will require a major commitment of resources.

All of the following are examples of strategic actions a firm might take EXCEPT A. acquire with competitors to reduce competition.B. expand into neglected markets.C. change product packaging.D. tie up raw materials sources.

C. change product packaging.

The best example of a tactical action that a company might use in response to a competitive attack is to A. acquire the competitor.B. target the rival's markets.C. expand into new geographical areas.D. offer price discounts and rebates.

D. offer price discounts and rebates

All of the below are factors that affect how a competitor will respond to a competitive attack EXCEPT A. how dependent the competitor is on that industry or particular market segment.B. the degree of market power and reputation of the company that initiated the attack.C. the resources which are available for a firm to respond.D. the stock market reaction to the initial competitive attack.

D. the stock market reaction to the initial competitive attack.

Which of the following refers to a situation where a company has a high concentration of its business in a particular industry's market? A. competitor's resourcesB. market dependenceC. resource similarityD. actor's reputation

A firm is considering a large price cut on its leading product as a way to gain market share. One executive strongly disagrees with the price cut and states, "We are in the same marketplace as our rivals, and we do not have any competitive advantages in our cost structure. If we cut prices, our competitors will likely do the same. The end result is that we will all make less money." These arguments are an example of A. a strategy of forbearance.B. a strategy of co-opetition.C. a hardball strategy whereby competitive actions are not undertaken without a clear advantage.D. a weakness strategy that leads a company into constant decline

A. a strategy of forbearance.