Deck 2: Start-Up and the Need for Competitive Advantage

Question 1

Building a competitive advantage requires commitment of considerable resources.

Answer 1

True

Question 2

Market segmentation identifies larger customer groups that will respond to general marketing strategies.

Answer 2

False

Question 3

A strategic decision is a decision regarding the direction a firm will take in relating to its customers and competitors.

Answer 3

True

Question 4

A variation of the single-segmentation strategy is called niche marketing.

Question 5

The industry environment is very broad,comprising general factors that affect all,or at least most,businesses in a society.

Question 6

Many new businesses are formed as a result of the entrepreneur's prior work experience,through which he or she sees ways to improve and/or modify a product.

Question 7

If a firm determines that two or more market segments have the potential to be profitable and then develops a unique marketing mix for each segment,it is called an unfocused strategy.

Question 8

Entrepreneurs who want to pursue a start-up business should address their competitive advantage over potential rivals.

Question 9

In marketing terms,a focus strategy depends on market segmentation.

Question 10

A start-up idea also may emerge from a prospective entrepreneur's deliberate search.

Question 11

A niche market strategy is particularly attractive to a small firm that is trying to escape direct competition with industry giants.

Question 12

A recent job provides experience that can help with start-up ideas.

Question 13

Rising demands of buyers or suppliers are threats to the venture.

Question 14

A segmented market can erode when the focus strategy is imitated.

Question 15

Entrepreneurs can evaluate their own capabilities and then look to new products or services they may be capable of producing.

Question 16

Magazines and other periodicals are excellent sources of start-up ideas.

Question 17

Poor market positioning and a lack of a perceived advantage among customers in the target market are reasons why many new ventures fail.

Question 18

Serendipity is the phenomenon of making desirable discoveries by accident.

Question 19

Within the context of the general environment,critical segments include sociocultural,technological,economic,and political/legal trends.

Question 20

The primary basis for start-up ideas is personal experience gained solely in one's household.

Question 21

Hobbies of retiring business executives can spawn start-up ideas.

Question 22

Creating a cost advantage potentially gives a firm a competitive advantage.

Question 23

A competitive advantage exists when a firm offers a product or service that is perceived by customers to be inferior to those of competitors,thereby promoting firm unprofitability.

Question 24

Returns from competitive advantage always increase over time.

Question 25

Serendipity is a term describing a new product idea resulting from deliberate search activities.

Question 26

Sustainable competitive advantage is an established value-creating industry position that is likely to endure over time.

Question 27

If a business believes that two or more market segments can be profitable and develops a unique marketing mix for each,it is following a multisegmentation strategy.

Question 28

Core competencies are value-creating organizational capabilities that are unique to a firm.

Question 29

Niche marketing guarantees a sustainable competitive advantage.

Question 30

The general environment is very broad,comprising general factors that affect all,or at least most,businesses in a society.

Question 31

Most new ventures are founded in "me,too" strategies differentiating themselves through superior service,higher quality or performance,or lower cost.

Question 32

Once a competitive advantage is achieved,the entrepreneur can focus much less on the external environment to pay more attention to the internal environment.

Question 33

Limiting sales to a single geographic area is a niche market strategy.

Question 34

Small businesses should always pursue a multisegmentation strategy as they can safely spread their resources out thinly.

Question 35

The single-segmentation strategy is usually the wisest strategy for small businesses during initial marketing efforts.

Question 36

An effective marketing advantage can occur when the consumer is convinced of the uniqueness and desirability of the product or service-real or perceived.

Question 37

A marketing competitive advantage is an approach that requires differentiation of a firm's product or service along some dimension other than cost.

Question 38

In the textbook,Michael Porter is cited as having written about the five forces of determining the nature and degree of competition in an industry.

Question 39

Which of the following indicates a niche strategy?

A) strict concentration on a single market segment
B) concentration on multiple products
C) concentration on multiple products for the total market
D) selling to many geographical regions

Question 40

Originally,computer manufacturers aimed at the corporate market and practised very little market segmentation.

Question 41

Rohan believes his company's line of mp3 players will sell equally well to middle-aged males and females,adults in their 20s and 30s,and teenagers as long as the promotions are targeted properly to each group.What type of strategy is Rohan following?

A) multisegmentation
B) single-segmentation
C) niche
D) target market

Question 42

Carey's mobile home health care business,which delivers products to the elderly,is thriving.What competitive advantage is this an example of?

A) price/value
B) unique service features
C) customer service
D) accessibility

Question 43

Which example shows an idea for a new start-up coming from a hobby?

A) a coin collector who bought and sold coins for years to build a personal collection decides to become a coin dealer
B) a furniture salesperson sees the possibility of opening a new furniture store in a different area of the city
C) a sharpshooter who shot holes in a pair of her boyfriend's jeans during an argument hears him receive compliments on the way they look
D) a chemist who accidentally mixes potassium with hydrogen to create an explosive reaction used in fireworks

Question 44

Which component of a SWOT analysis is "lack of management skills or experience"?

A) strengths
B) weaknesses
C) opportunities
D) threats

Question 45

Christine knows her idea for a new business will become popular.She plans to continually introduce new products to stay ahead of other businesses that try to sell to her customers? Which key start-up question is Christine addressing?

A) What are the different start-up ideas you might consider?
B) What are some sources for additional new business ideas?
C) How can you identify a genuine opportunity that promises attractive financial rewards?
D) What competitive advantage could your business have over its rivals?

Question 46

Which of Michael Porter's five forces concerns customers having the ability to turn to other products to replace those that the industry offers?

A) threat of new competitors
B) bargaining power of suppliers
C) threat of substitute products
D) bargaining power of buyers

Question 47

Which trend is "cloud" computing related to?

A) economic
B) sociocultural
C) technological
D) demographic

Question 48

A new cyber security firm launches a product that large organizations adapt into their system because of its superior protection against attacks from hackers.What exists in this company to cause organizations to purchase its product?

A) tactical advantage
B) strategic competency
C) competitive advantage
D) core competencies

Question 49

Carey performed an analysis of his skills.He identified presentation skills as one of his attributes and developed a business to teach others how to present effectively.Which approach did Carey use to identify his business idea?

A) looking outside-in
B) looking outside-out
C) looking inside-out
D) looking inside-in

Question 50

Nicholas is unsure of the kind of business to start.He wonders if the Internet,business magazines,or talking to professionals would be the best way to start.Which key start-up question is Nicholas addressing?

A) What are the different start-up ideas you might consider?
B) What are some sources for additional new business ideas?
C) How can you identify a genuine opportunity that promises attractive financial rewards?
D) What competitive advantage could your business have over its rivals?

Question 51

The decline in the value of the Canadian dollar has helped Antonio's Ottawa business increase exports to the US.Which trend is this related to?

A) economic
B) sociocultural
C) political legal
D) global

Question 52

What are the crucial capabilities that distinguish a company competitively and reflects its general focus and personality?

A) tactical advantage
B) strategic competency
C) competitive advantage
D) core competencies

Question 53

Kyle plans to open a delicatessen in Halifax featuring new desserts that he first tasted during a vacation to Italy.What is Kyle's start-up idea based on?

A) new product idea
B) new business idea
C) new customer idea
D) new market idea

Question 54

Preeti feels she has sufficient capital to start her business and is thinking about what other resources or information she needs to minimize the risk of failure.Which key start-up question is Preeti addressing?

A) What are the different start-up ideas you might consider?
B) What could you do to increase your chances that the start-up business will be successful?
C) How can you identify a genuine opportunity that promises attractive financial rewards?
D) What competitive advantage could your business have over its rivals?

Question 55

A cardiologist creates a device that attaches to a smart phone to provide real-time information to a patient's doctor.The product outsells all other monitoring devices.Which factor most contributes to the competitive advantage of this product?

A) price/value
B) unique service features
C) customer service
D) accessibility

Question 56

Folding bed sheets with elastic corners was difficult for Rose.She created a tool to help keep the corners straight.This tool worked so well she developed a web business to sell it on the Internet.What was the source of Rose's new business idea?

A) personal experience
B) hobby and personal interests
C) accidental discovery
D) deliberate new business search

Question 57

Josh has investors very excited about his new approach to cyber security that virtually eliminates all outside threats from system viruses or identity theft.What is Josh's new business idea based on?

A) new technology idea
B) new benefit idea
C) new process idea
D) new service idea

Question 58

Which environment is narrowly defined and has the combined forces that directly affect a given firm and all of its relevant competitors?

A) general
B) industry
C) market
D) global

Question 59

With the decline in elementary school student population,Elizabeth created a business to convert excess portable space into private storage.Which trend is this related to?

A) economic
B) sociocultural
C) technological
D) demographic

Question 60

Jorge knew it was just a matter of time before competition emerged in the area of his business.What must Jorge do in order to maintain a competitive advantage?

A) focus mainly on the organization's microenvironment
B) continually ignore the company's external environment
C) continually upgrade the company's organizational capabilities
D) focus mainly on the organization's core competencies

Question 61

By selecting a particular market niche,an entrepreneur decides on the basic direction of the firm-a choice that affects the very nature of the business.What kind of decision is this?

A) market-based
B) tactical
C) strategic
D) focus-based

Question 62

Which component of a SWOT analysis is "a strong network of personal contacts"?

A) strengths
B) weaknesses
C) opportunities
D) threats

Question 63

Which idea for a new start-up comes from an accidental discovery?

A) a coin collector who learns the value of his collection and decides to sell some at coin fairs
B) a salesperson who likes the bamboo chairs he sees while on vacation and opens his own furniture store selling bamboo-style furniture
C) a sharpshooter who shoots holes in a pair of her boyfriend's jeans during an argument and then hears him receive compliments on the way they look
D) a chef who finds his mother's old recipes and decides to write a cookbook based on them

Question 64

Jennifer is selling a line of sterling silver jewellery at the college she attends.Jennifer is identifying pieces that she can market most effectively to females in their 20s,females over 30,and males.What is Jennifer doing?

A) market differentiation
B) market niching
C) market segmentation
D) market research

Question 65

Jack wants customers that purchase from his chain of hardware stores to feel they received the best value possible.To accomplish this Jack continually negotiates the best arrangements possible with his suppliers.Which competitive advantage strategy is Jack most focused on?

A) customer service
B) cost-based
C) differentiation
D) premium product

Question 66

Elle loves to cycle between small towns in Northern Ontario.This inspired her to use her own maps of safe cycling roads to create an Internet subscription business for other cycling enthusiasts.What was the source of Elle's new business idea?

A) personal experience
B) hobbies and personal interests
C) accidental discovery
D) deliberate new business search

Question 67

When China opens its doors to foreign suppliers Katie's engineering firm was able to secure contracts to help build infrastructure in Chinese cities.Which trend is this related to?

A) economic
B) sociocultural
C) political legal
D) global

Question 68

After the United States increased the duty on wax candles being sold from Asia into America,Joy focused more on Canada to sell her imported candles.Which trend is this related to?

A) economic
B) sociocultural
C) political legal
D) global

Question 69

A company raises its prices and customers have no choice but to pay because there are no other substitute products.Which of Michael Porter's competitive forces is this an example of?

A) threat of new competitors
B) bargaining power of buyers
C) bargaining power of suppliers
D) threat of substitute products

Question 70

George's company has sold a line of nature paperweights specifically targeted at middle-aged women who like to collect decorative items with natural themes.Sales have been declining steadily as market segments are increasingly sharing similar needs and desires.What is the most likely reason for this decline in sales?

A) The firm has a unique focus strategy.
B) The differences across segments are narrowing.
C) New firms are having difficulty entering the industry.
D) Employees are learning unique skills.

Question 71

Which environment is very broad and includes factors that affect all businesses in society?

A) general
B) industry
C) market
D) global

Question 72

Parmeet found that her first-year college students were less and less prepared to be academically successful.Using her teaching experience she created a business to provide weekend camps for students to become more prepared for their postsecondary education.Which approach did Parmeet use to identify her business idea?

A) looking outside-in
B) looking outside-out
C) looking inside-out
D) looking inside-in

Question 73

Kayla is evaluating new business ideas to determine which have the greatest potential to provide the level of profits needed to enable her to live a lavish lifestyle.Which key start-up question is Kayla addressing?

A) What are the different start-up ideas you might consider?
B) What are some sources for additional new business ideas?
C) How can you identify a genuine opportunity that promises attractive financial rewards?
D) What competitive advantage could your business have over its rivals?

Question 74

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

A) when the strategy is unique
B) when the target segment's differences from other segments widen
C) when new firms subsegment the industry
D) when demand increases and the segment becomes attractive

Question 75

Which strategy focuses on one market even when many markets exist?

A) multisegmentation
B) unsegmented
C) marketing mix
D) single-segmentation

Question 76

Pat's back problems forced him to change his truck driving career.He reviewed business magazines and business sites and eventually purchased a truck wash business.What was the source of Pat's new business idea?

A) personal experience
B) hobby and personal interests
C) accidental discovery
D) deliberate new business search

Question 77

Harveer is starting a business to sell a product she feels will make fastening loads to truck beds more efficient.What is Harveer's new business idea based on?

A) new technology idea
B) new benefit idea
C) new process idea
D) new service idea

Question 78

George is fearful of a new company he sees at a tradeshow that is selling a similar product that his company currently distributes but at a much better price.Which component of SWOT is causing concern for George?

A) strengths
B) weaknesses
C) opportunities
D) threats

Question 79

What is the most productive source of start-up ideas?

A) prior work experience
B) personal interests and hobbies
C) chance happening
D) deliberate search

Question 80

Which of the following is an intangible organizational resource?

A) plants and equipment
B) borrowing capacity
C) patents and copyrights
D) cash reserves