Deck 3: Creating Business From Opportunity

Question 1

The business definition has three elements: ________.

A) target market, potential customers, and production capability
B) offer, target market, and production/delivery capability
C) offer, acceptance, and consideration
D) business definition, target market, and market analysis

Answer 1

B

Question 2

Which item below is not a competitive advantage?

A) using a new patented manufacturing process that reduces manufacturing costs by 25%
B) offering free samples during a two week promotion
C) consistently providing better customer service than the competition
D) reducing operating costs by 7%

Answer 2

B

Question 3

A competitive advantage can be based on any of six factors. Which factor below is not one of the six?

A) opportunity
B) selection
C) service
D) quality

Answer 3

A

Question 4

Business definition + competitive advantage is ________.

A) competitive tactics
B) competitive strategy
C) business mission
D) business plan success

Question 5

Entrepreneurs tend to be ________.

A) risk averse
B) negative
C) optimistic
D) dispassionate

Question 6

For a business to be successful, a competitive advantage must be ________.

A) expensive
B) legal
C) sustainable
D) profitable

Question 7

A target market of every adult in the United States is too ________.

A) narrow
B) broad
C) specific
D) limiting

Question 8

Which of the following is not an element of business definition?

A) the offer
B) the acceptance
C) target market
D) production and delivery capability

Question 9

For your business to be successful you will need a strategy for beating the competition, i.e., your ________.

A) competitive advantage
B) customer analysis
C) target market
D) market analysis

Question 10

A ________ is a group of people who would be interested in buying a given product or service.

A) market
B) consumer
C) customer
D) target

Question 11

The six factors of competitive advantage are quality, price, location, selection, service, and speed/turnaround.

Question 12

In analyzing competitive advantage, you will need to ask three questions. Among these are:

A) Cost structure - are you at a cost advantage or disadvantage?
B) What is your unique selling proposition? What do you have that competitors cannot or will not match?
C) Competitive offers - how do you compare with competitors on a feature-by-feature basis?
D) All of the above.

Question 13

When you start your business your ________ will guide the business operations and decisions.

A) core beliefs
B) track record
C) guiding light
D) competitive offers

Question 14

Your ________ is a concise communication of your strategy including your business definition, purpose, and your competitive advantage.

A) target market analysis
B) business plan
C) values statement
D) mission statement

Question 15

A solid business definition has three elements: 1) the offer, 2) target market, 3) production and delivery capability.

Question 16

Which of the following is not a strong method of identifying business opportunities?

A) Searching through a process of identification and selection beginning with self- developed (or group-developed) ideas.
B) A person has a talent for making something and decides that he or she should go into business.
C) Searching through a process of identification and selection starting with research on "hot" businesses or growth areas.
D) A person has an idea for a product or service and searches for a market.

Question 17

________ is the core values of an organization in action.

A) Mission
B) Culture
C) Vision
D) None of the above.

Question 18

Your company's vision defines the work environment.

Question 19

Business definition answers the questions of who, what, and ________.

A) how
B) when
C) why
D) None of the above.

Question 20

Before you can start your business, you must define it. Describe the questions the business definition answers and its three elements.

Question 21

Total cost of goods sold per unit consists of ________.

A) volume cost + labor cost
B) labor cost - volume discount per unit
C) materials cost per unit + labor cost per unit
D) selling price per unit + gross profit per unit

Question 22

The unit of sale for a retailer is ________.

A) a dozen of an item
B) one item
C) one order
D) one hour of time

Question 23

If the Foreign Exchange rate between the Japanese yen and the Euro is 190 : 1, how many yen will equal 10 euros?

A) 1900
B) 100
C) 1910
D) 1901

Question 24

Briefly describe a product or service idea, e.g., a bookstore, and describe how you might create a competitive advantage.

Question 25

Total gross profit = ________.

A) profit - cost of goods sold
B) cost of goods sold - total revenue
C) revenue - cost of goods sold
D) revenue - operating costs

Question 26

Business leaders create wealth by ________.

A) avoiding the cost of hiring employees
B) reducing their gross margins
C) hiring employees in order to sell more units and generate more profit
D) charging high prices to customers

Question 27

Why is it a good idea to figure out your Economics of One Unit?

Question 28

Describe the six factors of competitive advantage.

Question 29

The cost of selling one unit of a product is called ________.

A) cost of materials
B) cost of goods sold
C) cost of services sold
D) marginal cost

Question 30

Tray has a T-shirt business that buys shirts from a wholesaler for four dollars each and sells them to retailers for eight dollars each. He imprints each shirt with a picture of a musical artist that costs him two dollars. He also pays his cousin to do the printing at five dollars an hour. LaShawn prints five shirts per hour. A retailer offers to buy 1000 shirts at seven dollars each. Should Tray agree to the deal?

A) Yes, Tray will make a profit of one dollar per shirt.
B) No, Tray will not make a profit at this price.
C) Yes, Tray will make a marginal profit at this rate.
D) Yes, even though he may lose money he can make up for it in volume.

Question 31

To determine the value of a business you can use asset valuation. It is a method that analyzes the underlying value of a business's sales and operating costs as a basis for negotiating a price.

Question 32

A typical unit of sale for a wholesaler would be ________.

A) one item
B) one dozen
C) a block of time devoted to a task
D) one hour of work

Question 33

What is the average unit of sale for a restaurant that serves $3,250 per day in meals to 200 customers per day?

A) $32.50
B) $20.00
C) $16.25
D) $15.84

Question 34

How do you decide if your competitive advantage is strong enough, and give an example?

Question 35

To help determine whether your business will be profitable, calculate the ________.

A) difference between the costs and profits for one unit
B) economics of one unit
C) cost of goods sold
D) marginal cost of one unit

Question 36

Average gross profit per customer is ________.

A) average cost of sale - average sale per customer
B) average cost of tangible product - average cost of intangible product
C) average sale per customer - average cost of sale per customer
D) average sale per consumer + average sale per wholesaler

Question 37

Once you know your ________ you can calculate gross profit.

A) cost of goods sold
B) gross cost
C) unit of sale
D) net profit

Question 38

The COGS and COSS are equivalent mathematically.

Question 39

The unit of sale for a manufacturer is ________.

A) a dozen of an item
B) one item
C) one order
D) one hour of time

Question 40

The foreign exchange rate is ________.

A) the relative value between one currency and another
B) the rate at which countries do business
C) the relative value between the dollar and foreign currencies
D) the relative value of last year's currency to this year's