Question 1

Briefly state the difference between a market and an industry.How are these two items related to small business success?

Accepted Answer

A market consists of buyers, current or

Question 2

Miriam opened a yarn craft store in her small town based on her personal interests and hobbies.There were no competitors locally; the merchandise was readily available; and she had the initial capital to open the store.Yet her business failed.Too few customers visited her store.What was Miriam's fatal flaw?

Accepted Answer

A) The merchandise was patent-protected. 
B) Miriam could not raise enough capital. 
C) Miriam lacked industry knowledge. 
D) Miriam ignored the market limitations. 
A) The merchandise was patent-protected. 
B) Miriam could not raise enough capital. 
C) Miriam lacked industry knowledge. 
D) Miriam ignored the market limitations.

Question 3

Resources are best described as:

Accepted Answer

A) those basic inputs that a business uses to conduct its business. 
B) only those features that are visible and easy to quantify. 
C) the business's lending capacity. 
D) capabilities that can be exploited. 
A) those basic inputs that a business uses to conduct its business. 
B) only those features that are visible and easy to quantify. 
C) the business's lending capacity. 
D) capabilities that can be exploited.

Question 4

Many businesses are formed because an entrepreneur saw ways to improve or modify a product as a result of previous work experience.

Accepted Answer

A) True 
 B)False

Question 5

Arlene runs Aquabuddies, a company that makes figurines for aquariums.What type of strategy would be expected?

Accepted Answer

A) A focus strategy. 
B) An unsegmented strategy. 
C) A multi-segmentation strategy. 
D) A marketing mix strategy. 
A) A focus strategy. 
B) An unsegmented strategy. 
C) A multi-segmentation strategy. 
D) A marketing mix strategy.

Question 6

The quote "Good artists borrow; great artists steal" is the principle that launched which company?

Accepted Answer

A) Aimie's Dinner and Movie 
B) Apple 
C) C and D Landscape Company 
D) Xerox 
A) Aimie's Dinner and Movie 
B) Apple 
C) C and D Landscape Company 
D) Xerox

Question 7

Substitute products:

Accepted Answer

A) reduce the attractiveness and profitability of an industry. 
B) represent those items manufactured by direct rivals within an industry. 
C) are usually cheaper than the products they can replace. 
D) are always a serious threat to rivals in an industry. 
A) reduce the attractiveness and profitability of an industry. 
B) represent those items manufactured by direct rivals within an industry. 
C) are usually cheaper than the products they can replace. 
D) are always a serious threat to rivals in an industry.

Question 8

List the five factors that determine the nature and degree of competition in an industry, as presented by Michael Porter in his book Competitive Advantage.Why is the proper identification of these factors important for a new venture?

Accepted Answer

∙
New competitors
∙
Substitute products/

Question 9

During a feasibility analysis, an entrepreneur may discover a fatal flaw in the idea.

Accepted Answer

A) True 
 B)False

Question 10

According to the feasibility analysis framework, an entrepreneur who has a vision of a multi-unit company will:

Accepted Answer

A) be satisfied with an attractive niche so the company can gain market share. 
B) check to see if the health of the micro-market is strong enough for future macro-market growth. 
C) desire a healthier micro-market potential growth over the health of the macro-market. 
D) be satisfied with an attractive niche if it would serve as a point of entry for long-term potential. 
A) be satisfied with an attractive niche so the company can gain market share. 
B) check to see if the health of the micro-market is strong enough for future macro-market growth. 
C) desire a healthier micro-market potential growth over the health of the macro-market. 
D) be satisfied with an attractive niche if it would serve as a point of entry for long-term potential.

Question 11

According to Michael Porter, a focus strategy can erode when:

Accepted Answer

A) the strategy is protected. 
B) the target segment's differences from other segments narrow. 
C) new businesses reconstruct the industry. 
D) demand for the product grows and thus attracts new competitors. 
A) the strategy is protected. 
B) the target segment's differences from other segments narrow. 
C) new businesses reconstruct the industry. 
D) demand for the product grows and thus attracts new competitors.

Question 12

Rumpelstiltskin, an imp in a Grimm Brothers fairy tale, could spin straw into gold.We would call this a(n):

Accepted Answer

A) useful skill. 
B) tangible resource. 
C) intangible resource 
D) capability. 
A) useful skill. 
B) tangible resource. 
C) intangible resource 
D) capability.

Question 13

Angela noticed an interest among her friends and colleagues in wearing high-end watches and other jewellery for special occasions, so she started a company where customers could rent high-end jewellery.Angela is:

Accepted Answer

A) considering ways to adapt a product or service to meet customer needs in a different way. 
B) offering products through a subscription service. 
C) cashing in on the sharing economy. 
D) imagining how a market for a product could be creatively expanded. 
A) considering ways to adapt a product or service to meet customer needs in a different way. 
B) offering products through a subscription service. 
C) cashing in on the sharing economy. 
D) imagining how a market for a product could be creatively expanded.

Question 14

Considering Michael Porter's five factors, the chicken meat processing industry is characterised by:

Accepted Answer

A) low barriers to entry. 
B) intense rivalry among competitors. 
C) availability of many substitutes. 
D) strong buyers. 
A) low barriers to entry. 
B) intense rivalry among competitors. 
C) availability of many substitutes. 
D) strong buyers.

Question 15

The very feature of a market that makes it attractive to one small company (the lack of competition) will make it attractive to others; this fact is called the __________ ___ ___________.​

Accepted Answer

paradox of

Question 16

Nora has identified an underserved market for her product.Competitors are not likely to notice her efforts to attract her target market, and her product fills a need for these customers.Nora has found:

Accepted Answer

A) an opportunity sweet spot. 
B) a core competency. 
C) a competitive advantage. 
D) a capability. 
A) an opportunity sweet spot. 
B) a core competency. 
C) a competitive advantage. 
D) a capability.

Question 17

Peggy would like to open a dog-grooming business in her home.Which of the following, if true, would indicate this is a good idea?

Accepted Answer

A) More households now own dogs but the owners don't want to give them regular baths. 
B) Fewer households now own dogs but the owners don't want to give them regular baths. 
C) Fewer households now own dogs but the owners give them regular baths. 
D) More households own dogs but the owners give them regular baths. 
A) More households now own dogs but the owners don't want to give them regular baths. 
B) Fewer households now own dogs but the owners don't want to give them regular baths. 
C) Fewer households now own dogs but the owners give them regular baths. 
D) More households own dogs but the owners give them regular baths.

Question 18

Intangible resources include:

Accepted Answer

A) a good location, cash and capable business partners. 
B) a good reputation, a respected brand name and an extensive personal network. 
C) intellectual property rights, equipment and technology. 
D) capable business partners, intellectual property rights and equipment. 
A) a good location, cash and capable business partners. 
B) a good reputation, a respected brand name and an extensive personal network. 
C) intellectual property rights, equipment and technology. 
D) capable business partners, intellectual property rights and equipment.

Question 19

Which action is a cause for erosion of a small business's focus strategy?

Accepted Answer

A) Consumer demand grows. 
B) New businesses reconstruct the industry. 
C) Differences between segments grow larger. 
D) The focus strategy is imitated. 
A) Consumer demand grows. 
B) New businesses reconstruct the industry. 
C) Differences between segments grow larger. 
D) The focus strategy is imitated.

Question 20

Kathy has founded three different businesses in the past eight years, all of which have become so successful she has sold them at large profits.We can say Kathy is good at:

Accepted Answer

A) innovative ideas. 
B) entrepreneurial alertness. 
C) new market ideas. 
D) opportunity recognition. 
A) innovative ideas. 
B) entrepreneurial alertness. 
C) new market ideas. 
D) opportunity recognition.

Exam 3: Starting a Small Business

Briefly state the difference between a market and an industry.How are these two items related to small business success?

Resources are best described as:

Many businesses are formed because an entrepreneur saw ways to improve or modify a product as a result of previous work experience.

Arlene runs Aquabuddies, a company that makes figurines for aquariums.What type of strategy would be expected?

The quote "Good artists borrow; great artists steal" is the principle that launched which company?

Substitute products:

List the five factors that determine the nature and degree of competition in an industry, as presented by Michael Porter in his book Competitive Advantage.Why is the proper identification of these factors important for a new venture?

During a feasibility analysis, an entrepreneur may discover a fatal flaw in the idea.

According to the feasibility analysis framework, an entrepreneur who has a vision of a multi-unit company will:

According to Michael Porter, a focus strategy can erode when:

Rumpelstiltskin, an imp in a Grimm Brothers fairy tale, could spin straw into gold.We would call this a(n):

Angela noticed an interest among her friends and colleagues in wearing high-end watches and other jewellery for special occasions, so she started a company where customers could rent high-end jewellery.Angela is:

Considering Michael Porter's five factors, the chicken meat processing industry is characterised by:

The very feature of a market that makes it attractive to one small company (the lack of competition) will make it attractive to others; this fact is called the __________ ___ ___________.​

Nora has identified an underserved market for her product.Competitors are not likely to notice her efforts to attract her target market, and her product fills a need for these customers.Nora has found:

Peggy would like to open a dog-grooming business in her home.Which of the following, if true, would indicate this is a good idea?

Intangible resources include:

Which action is a cause for erosion of a small business's focus strategy?

Kathy has founded three different businesses in the past eight years, all of which have become so successful she has sold them at large profits.We can say Kathy is good at:

The Entrepreneurial Life

Integrity, Ethics And, Social Entrepreneurship

Franchising and Buyouts

The Family Business

The Business Plan: Visualizing the Dream

The Marketing Plan

The Organizational Plan: Teams, Legal Structures, Alliances, and Directors

The Location Plan

Understanding a Firms Financial Statements

Forecasting Financial Requirements

A Firms Sources of Financing

Planning for the Harvest

Building Customer Relationships

Product and Supply Chain Management

Pricing and Credit Decisions

Promotional Planning

Global Opportunities for Small Business

Professional Management and the Small Business

Managing Human Resources

Managing Operations

Managing the Firms Assets

Managing Risk in the Small Business

Filters

The very feature of a market that makes it attractive to one small company (the lack of competition) will make it attractive to others; this fact is called the ________ _ ___________.