Deck 4: Analyzing the Industry and Market

Question 1

During the differentiation stage of the industry life cycle, dominant firms emerge as weaker firms leave.

Answer 1

False

Question 2

The industry in which an entrepreneur's new business will operate represents the business's

A) external environment.
B) target demographic .
C) resource chain.
D) first customer.
E) shareholder.

Answer 2

A

Question 3

In assessing the competition, the idea is to benchmark the new venture against a competitor.

Answer 3

False

Question 4

Industries remain static or stable over time.

Question 5

As more firms enter an industry, intense _____ occurs, because the industry's established standards and proprietary rights no longer provide the exclusivity they once did.

A) employee  growth
B) consumer adaptation
C) product differentiation
D) competition  shakeout
E) financial breakthrough

Question 6

In conducting an industry analysis, which of the following is NOT a question one would ask when collecting data?

A) What does the industry look like?
B) Is the industry growing?
C) Where are the opportunities?
D) How did the industry develop?
E) How quickly does the industry adopt new technology?

Question 7

The stages of the industry life cycle are identified by the different kinds of activities occurring at each stage.

Question 8

Google, Wikipedia.com, journals, and trade magazines are examples of

A) industry drives.
B) expert portals.
C) primary sources.
D) secondary sources .
E) primary markets.

Question 9

The _____ period moves the industry from many companies and high product costs, to a more stable and mature industry with only a few efficient firms.

A) growth
B) adaptation
C) differentiation
D) shakeout
E) maturity

Question 10

For every industry, the life-cycle stages occur at different times and vary in their duration.

Question 11

A(n) _____  is a grouping of businesses that interact in a common environment as part of a value chain or distribution channel for a particular good.

A) industry
B) external environment
C) community
D) customer base
E) market

Question 12

In the context of Porter's Five Forces, barriers to entry, threat from substitutes, threat from buyers' bargaining power, and threat from suppliers' bargaining power all work together to

A) successfully launch new products.
B) allow markets to discover customers.
C) increase consumers' purchase dilemma.
D) help an industry achieve milestone developments.
E) create competitive rivalry for the resources available in the industry.

Question 13

To access the timeliest information, it is extremely important to gather _____ on an industry.

A) secondary sources of information
B) primary field data
C) solution resources
D) competitive intelligence
E) demand data

Question 14

The North American Industry Classification System (NAICS) is the classification system that the United States, Canada, and Mexico developed to identify industries and to allow for common standards and statistics across North America.

Question 15

Which of the following is NOT part of Porter's Five Forces framework?

A) Threat of new entrants
B) Buyer bargaining power
C) Supplier bargaining power
D) Identification of the competition
E) Competitive rivalry among existing firms

Question 16

A primary market is defined as those customers or markets that have the most need for what an entrepreneur is offering.

Question 17

Step five of the five-step ethnographic approach for entrepreneurs is arguably the most important.

Question 18

_____ have provided a way of effectively looking at the structure of an industry and a company's competitive strength and positioning relative to that industry and to the markets it serves.

A) Porter's Five Forces
B) Political, economic, social, and technological analyses
C) Ethnographic techniques
D) Value chains
E) Survey techniques

Question 19

Target market research provides some of the least important data that is used to determine who the first customer is.

Question 20

The government can limit entry to an industry or market through strict regulation, licensing requirements, and by limiting access to raw materials via laws or high taxes and to certain locations by means of zoning restrictions.

Question 21

"What does the industry look like?," "Is the industry growing?," and "Where are the opportunities?" are examples of the questions that should be answered when conducting

A) market mining.
B) industry analysis.
C) financial  investigation.
D) consumer funding.
E) concept testing.

Question 22

Identification of the _____ and the first customer is one of the most important tasks that needs to be undertaken during the feasibility analysis for a new business.

A) industry need
B) primary field data
C) primary market
D) technological requirements
E) industry life-cycle stage

Question 23

Due to the rise of digital media, many print newspapers have gone out of print or have reduced circulation. The newspaper industry is in the _____ stage of the industry life cycle.

A) shakeout
B) decline
C) maturity
D) differentiation
E) closeout

Question 24

Which of the following is a goal of market research for a new company?

A) Identify and profile the first customer.
B) Estimate potential demand from the first customer.
C) Identify subsequent customer segments that can be tapped later on to grow the company.
D) None of these are correct.
E) A ll of these are correct.

Question 25

The North American Industry Classification System (NAICS) code consists of _____ digits where the first two digits designate _____.

A) four; the NAICS industry
B) four; an industry group
C) five; an economic subsector
D) six; a major economic sector
E) six; the NAICS industry

Question 26

Which of the following is NOT part of an ethnographic approach to customer observation?

A) Learn from observation.
B) Explain what was observed.
C) Develop a plan.
D) Test the theory.
E) Develop a hypothesis.

Question 27

There are generally three types of competitors for a product or service: direct, indirect or substitute, and

A) established.
B) good or bad.
C) intermediate.
D) substantial.
E) emerging or potential.

Question 28

Providing more opportunity for clarification and discussion, the observation of nonverbal communication, and the high response rate are all advantages of

A) written surveys.
B) structured interviews.
C) informal focus groups.
D) phone surveys.
E) anthropological studies.

Question 29

The _____ represents an unserved niche that enables an entrepreneur to enter a market with no direct competition for a time.

A) general customer base
B) first customer
C) supplier
D) distributor
E) shareholder

Question 30

Which of the following is NOT one of the key questions to be asked to discover your first customer?

A) What are the potential markets for the product or service?
B) What is the customer's buying pattern throughout the year?
C) How much is the customer willing to pay?
D) How often do the customers buy?
E) How do customers hear about the product or service?

Question 31

Which of the following is NOT one of the steps in the process for gathering market data?

A) Assess your information needs.
B) Research secondary sources first.
C) Forecast demand for the product or service.
D) Measure the target market with primary research.
E) Determine the market's strengths, weaknesses, opportunities, and threats.

Question 32

Good competition is defined as companies that are

A) doing everything right.
B) doing what they do very badly.
C) conducting strategic market analysis.
D) prosperous.
E) doing proprietary work.

Question 33

The _____ stage of the industry life cycle is an expensive period for most companies because they need to deploy extensive resources while developing critical partnerships to establish their position in the industry.

A) emerging industry
B) s hakeout
C) d ifferentiation and competition
D) g rowth and adaptation
E) m aturity and decline

Question 34

The ethnographic approach for entrepreneurs to observe their customers consists of _____ steps.

A) seven
B) five
C) four
D) nine
E) two

Question 35

In the context of costs involved in producing a product by an industry, _____ means that an industry's costs  to produce have declined relative to the price of its goods and services.

A) t hreat of new entrants
B) brand loyalty
C) s witching costs
D) e conomies of scale
E) keystroking

Question 36

Emerging, growth, differentiation, shakeout, maturity, and decline are all stages of the _____ life cycle.

A) employee
B) industry
C) job
D) profit/loss
E) customer

Question 37

Understanding how an industry operates is fundamental to shaping effective _____ and growth strategies and to determining the potential for profitability.

A) resource
B) entry
C) value
D) direction
E) technology

Question 38

In the customer discovery hierarchy, _____ are those individuals or companies that hold the key to reaching particular customers; they control the flow of information.

A) gatekeepers
B) purchasers
C) influencers
D) deciders
E) users

Question 39

One of the weakest portions of any feasibility analysis or business plan is the

A) secondary data.
B) primary data.
C) customer discovery process.
D) competitive analysis.
E) hypothesis.

Question 40

_____ means new entrants to an industry face existing products and services with loyal customers who are not likely to switch easily to something new.

A) Distribution accessibility
B) Economies of scale
C) B rand loyalty
D) Keystroking
E) Product differentiation

Question 41

Discuss the purpose of the North American Industry Classification System (NAICS), and indicate what countries are part of the system.

Question 42

Distinguish between direct and indirect competitors. Assume you start a business. Provide an example of a direct and an indirect competitor of your business.

Question 43

List and briefly describe the hierarchy of people and their roles in the customer discovery process.

Question 44

Discuss some of the things that should be taken into account when constructing a questionnaire.

Question 45

List the questions that should be answered during data collection in industry analysis.

Question 46

List some of the sources of primary industry data.

Question 47

What is the importance of a customer profile? List some of the information that should be included in a customer profile.

Question 48

Briefly discuss the stages of the industry life cycle.

Question 49

Briefly discuss how an entrepreneur would collect competitor data.

Question 50

List the four steps of the process for gathering market data.