Multiple choice questions of chapter 4

 One form of primary research is ________.

1. to review published articles
2. a focus groups
3. library research
4. Internet research

 The process of determining whether an entrepreneur's idea is a viable foundation for creating a
successful business is known as a(n) ________.
1. industry analysis
2. feasibility analysis
3. business plan
4. strategic analysis

An analysis that determines the degree to which a product or service idea appeals to potential customers and
identifies the resources necessary to produce the product or provide the service is referred to as
1. business prototyping
2. business plan analysis
3. financial feasibility analysis
4. product or service feasibility analysis

 A(n) ________ group involves enlisting a small number of potential customers to get feedback on specific
issues about the company's product or service.

1. trade
2. industry
3. focus
4. Delphi

 The process in which entrepreneurs test their business models on a small scale before committing
serious resources to launch a business that might not work is known as ________.
1. business planning
2. business prototyping
3. business modeling
4. product or service feasibility analysis

 Conducting ________ research involves collecting data firsthand and analyzing it while ________ research
involves gathering data that has already been complied and is available.

1. secondary; primary
2. primary; secondary
3. product; secondary
4. primary; industry

 According to Porter's 5-forces model, a substitute for Coca-Cola, the carbonated cola drink, would be ________.
1. bottled water
2. Dr. Pepper
3. Mountain Dew
4. Pepsi

 An effective tool used to help assess ideas is the ________.

1. idea metric
2. idea dashboard
3. idea toolkit
4. idea sketch pad

 Generation Y and Generation Z are examples of ________ changes.

1. sociocultural
2. demographic
3. economic
4. technological

 Which of the following is not a macro force that creates change in industries?
1. Sociocultural
2. Economic
3. Entry barriers
4. Technological

 The Internet is an example of a(n) ________ force.

1. technological
2. demographic
3. sociocultural
4. economic

 More women entering the workforce is an example of a(n) ________ change.

1. technological
2. sociocultural
3. demographic
4. economic

 A(n) ________ is the process of examining a need in the market, developing a solution for that need, and
determining the entrepreneur's ability to successfully turn the idea into a business.
1. strategic analysis
2. business plan
3. idea assessment
4. feasibility analysis

 The final aspect of the financial feasibility analysis combines the estimated earnings and the capital
requirements to determine the ________.
1. rate of return on the capital invested
2. estimated earnings
3. net profit
4. total capital requirements

 Asking the question, "Is this idea right for me?" is part of the process of assessing ________ feasibility.
1. financial
2. business
3. entrepreneur
4. All of the above

 The strongest of the five forces in most industries is ________.

1. threat of substitute products or services
2. rivalry among companies competing in the industry
3. bargaining power of buyers
4. threat of new entrants to the industry

 Printed newspapers have seen their readership rates decline as new generations of potential readers
turn to their iPads and smartphones for sources of news. This is an example of ________.
1. bargaining power of buyers
 2. rivalry among existing firms
3. threat of substitutes
4. bargaining power of suppliers

 The Business Model Canvas has ________ elements.

1. 6
2. 3
3. 9
4. 5

 Which of the following is not a question to ask to evaluate an industry?

1. How large is the industry?
2. How fast is it growing?
3. How sparse is the industry?
4. What threats does the industry face?

 The financial feasibility analysis takes these aspects into consideration: ________.
1. capital requirements, estimated earnings, and return on owner's equity
2. capital requirements, human resources, and return on investment
3. capital requirements, estimated earnings, and return on sales
4. capital requirements, estimated earnings, and return on investment

 Porter's five forces model assesses industry attractiveness by surveying these five factors ________.
1. potential entrants, competitors, buyers, substitutes, and rivalry among existing firms
2. potential entrants, suppliers, buyers, substitutes, and rivalry among existing firms
3. potential entrants, suppliers, raw materials, substitutes, and rivalry among existing firms
4. potential entrants, suppliers, buyers, similar products, and rivalry among existing firms

Multiple choice questions of chapter 5

 A business plan is a written summary of ________.
1. a business venture's operational, financial, and marketing details
2. an entrepreneur's proposed business venture
3. the skills and abilities of a business venture's managers
4. All of the above
 A business plan ________.
1. is a valuable tool for convincing lenders or investors to put money into the business
2. forces an entrepreneur to think a business idea through, considering both its positive and its negative aspects
3. is a valuable managerial tool that helps an entrepreneur focus on developing a course for the business in the future
4. All the above
 The second essential purpose for creating a business plan is ________.
1. to file with the SEC before a public stock offering
2. to attract lenders and investors
3. to guide the operation of the company by charting its future course and devising a strategy for following it
4. to attract potential managers and employees to run the new venture
 The ________ test that a business plan must pass to attract financing from lenders and investors involves proving that a
market for the company's product or service actually does exist and that the company actually can build it for the cost
estimates included in the plan.
1. profitability
2. competitive
3. reality
4. value
 The three "tests" associated with a business plan are ________.
1. value, reality, and profitability
2. reality, value and litmus
3. competitive, profitability, and value
4. reality, competitive, and value
 To convince lenders and investors to put their money into the venture, a business plan must prove to them that it offers
a high probability of repayment or an attractive rate of return. This is the ________ test.
1. value
2. attractiveness
3. competitive
4. reality

 The ________ is also known as the "elevator pitch" and is written last, but is included as the first part of the business
plan and should summarize all the relevant points in about two pages.
1. loan proposal
2. business profile
3. executive summary
4. business history
 The ________ serves as the "thesis statement" for the entire business plan and is the broadest expression of a
company's purpose and defines the direction in which it will move.
1. mission statement
2. marketing strategy
3. company history
4. executive summary

 Which of the following is not one of the five Cs of credit?

1. Capital
2. Connections
3. Collateral
4. Capacity
 The purpose of covering the ________ in the business plan presentation is to show lenders and investors how the
company will produce an attractive payback or payoff.
1. marketing strategy
2. capital structure
3. product line
4. business model
 Which of the following is not one of the three components of intellectual capital?
1. Customer
2. Human
3. Competitor
4. Structural
 ________ involves developing a game plan to guide a company as it strives to accomplish its mission, goals, and
objectives to keep it on its desired course.
1. Market segmentation
2. Strategic management
3. Mission
4. Competitive advantage

 Which of the following was not identified as a way for the typical small business to establish a competitive advantage?
1. Improving customer service
2. Doing whatever the company does for its customers better than its competitors
3. Lowering prices
4. Providing higher quality goods or services

 The value proposition that sets a company apart from its competitors and gives it a unique position in the market,
superior to its competition, is its ________.
1. competitive profile
2. competitive advantage
3. strategic plan
4. mission statement
 The relationship between core competencies and competitive advantage is best described by which statement?
1. A company's core competencies become the nucleus of its competitive advantage.
2. As a company's core competencies become stronger, its competitive advantage becomes weaker.
3. Strengthening a company's competitive advantage strengthens its core competencies.
4. There is no relationship between core competencies and competitive advantage.
 The key to entrepreneurial success over time is to build a ________ competitive advantage.
1. random
2. defensible
3. coherent
4. sustainable

 A strategic plan serves as a blueprint to help a company to ________.

1. accomplish its mission, goals, and objectives
2. identify a company's competitive advantage and set it apart from its competition with a unique position in the market
3. match their company's strengths and weaknesses to the environment's opportunities and threats
4. All the above
 ________ are positive internal factors that contribute toward accomplishing the company's mission, goals, and
objectives, while ________ are negative internal factors that inhibit the accomplishment of a firm's mission, goals, and
objectives.
1. Opportunities; threats
2. Threats; opportunities
3. Strengths; weaknesses
4. Weaknesses; strengths
 Kevin Abt noticed that people were cooking meals in their homes less often but wanted to avoid the hassle of going out
to eat. They wanted to "eat in" without cooking. Abt launched a company, Takeout Taxi, that delivers restaurant-
prepared food to his customers' homes and businesses. Takeout Taxi is the result of a(n) ________.
1. threat
2. opportunity
3. strength
4. weakness
 Maria Sanchez is the owner of the Main Street Café and a new restaurant opens a few blocks away. From Maria's
perspective, this new restaurant constitutes a(n) ________.
1. strength
2. threat
3. opportunity
4. weakness
 Every business is characterized by a set of controllable variables that determines the relative success (or lack of it) of
market participants called ________.
1. opportunities and threats
2. competitive edge
3. distinctive competencies
4. key success factors
 Your ________ competitors offer the same products and services, and customers often compare prices, features, and
deals from these competitors as they shop.
1. direct
2. significant
3. indirect
4. All of the above
 A(n) ________ competitor offers the same or similar products or services only in a small number of areas, and their
target customers seldom overlap yours.
1. divergent
2. parallel
3. direct
4. indirect competitor
 ________ includes any assets an entrepreneur pledges to a lender as security for repayment of the loan.
1. Down payment
2. Margin
3. Condition
4. Collateral
 A competitive profile matrix ________.
1. allows the small business owner to evaluate her/his firm against competitors on the key success factors for the industry
2. permits the small business owner to divide a mass market into smaller, more manageable segments
3. creates a road map of action for the entrepreneur to fulfill her/his company's mission, goals, and objectives
4. identifies a firm's core competencies
 Which of the following is not a characteristic of a well-written objective?
1. Realistic, yet challenging
2. Timely
3. General
4. Measurable