Download Entrepreneurship: Idea Assessment, Business Planning, and Marketing Strategies and more Exams Advanced Education in PDF only on Docsity!
MGMT 3850 Exam 1 With
Solution
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. - ANSWER idea assessment
A feasibility analysis is the process of determining whether an entrepreneur's idea is a viable foundation for creating a successful business. - ANSWER true
A product or service feasibility analysis determines the degree to which a product or service idea appeals to potential customers. - ANSWER true
Generation Y and Generation Z are examples of ________ changes. - ANSWER demographic
The enactment of the Affordable Health Care Act in 2010 is an example of a ________ change. - ANSWER political and legal
Which of the following is not a question to ask to evaluate an industry? - ANSWER How sparse is the industry?
Porter's five forces model assesses industry attractiveness by surveying these five factors ________. - ANSWER potential entrants, suppliers, buyers, substitutes, and rivalry among existing firms.
Switching costs, the number of buyers, and if the items represent a relatively small portion of the cost of finished products are key considerations regarding the ________. - ANSWER bargaining power of buyers
Low capital requirements, cost advantages that are not related to company size, and the lack of brand loyalty are considerations regarding the ________. - ANSWER threat of substitute products
Products or services that may be sought as alternative solutions (e.g., purchasing tax planning software rather than paying a CPA to assist with preparing your taxes) are referred to as ________. - ANSWER substitute products
A business plan is a written summary of ________. - ANSWER -an entrepreneur's proposed business venture
-a business venture's operational, financial, and marketing details
-the skills and abilities of a business venture's managers
A business plan is - ANSWER a formal written document that describes the nature of a business and how it will operate
A solid business plan ________. - ANSWER -forces potential entrepreneurs to look at their business idea in the harsh light of reality
-requires a potential entrepreneur to assess the venture's chances of success more objectively
-helps prove to outsiders, such as potential lenders and investors, that a business idea can be successful
The second essential function for a business plan is ________. - ANSWER to attract lenders and investors
A descriptive fact about a product or service is called what? - ANSWER feature
Because they lack the size and financial resources of their larger competitors, small companies are powerless when it comes to developing effective marketing strategies. - ANSWER false
The specific group of customers at whom a company aims its good or services is referred to as a ________. - ANSWER target market
Successful marketing requires a business owner to ________. - ANSWER -understand target customers' needs, demands, and wants
-offer customers products and services that will satisfy their needs, demands, and wants
-provide customers with service, convenience, and value so that they will return
To gain a better understanding of the needs of their target market, entrepreneurs can research ______________. - ANSWER demographics
One of the greatest marketing mistakes small businesses make is ________. - ANSWER failing to identify the target market
The company's target customer should permeate the entire business, from the merchandise purchased, in the layout and decor of the store, and on the website. - ANSWER true
what are the 7 steps in The Creative Process? - ANSWER 1. Preparation
- Investigation
- Transformation
- Incubation
- Illumination
- Verification
- Implementation
Creativity - ANSWER the ability to develop new ideas and to discover new ways of looking at problems and opportunities; thinking new things.
Innovation - ANSWER the ability to apply creative solutions to problems or opportunities to enhance or to enrich people's lives; doing new things.
Divergent reasoning - ANSWER the ability to create a multitude of original, diverse ideas.
Convergent reasoning - ANSWER the ability to evaluate multiple ideas and to choose the best solution to a problem.
Convergent - ANSWER the ability to see the similarities and the connections among various and often diverse data and events.
Divergent - ANSWER the ability to see the differences among various data and events.
Left: Driving forces
Right: Restraining forces
TRIZ - ANSWER - systematic approach designed to solve any technical problem.
- Relies on 40 principles and left-brained thinking to solve problems.
Rapid Prototyping - ANSWER transforming an idea into an actual model that will point out flaws and lead to design improvements.
Patent - ANSWER A grant from the Patent and Trademark Office to the inventor of product, giving the exclusive right to make, use, or sell the invention for 20 years from the date of filing the patent application.
Every year U.S. entrepreneurs launch more than
___________ new businesses. - ANSWER 6.6 mil
Entrepreneurial ________ - the most significant economic development in recent history. - ANSWER spirit
Globally, nearly one in _______ adults is actively engaged in launching a
business. - ANSWER 8
_______ of the U.S. population aged 18 to 64 is engaged in entrepreneurial activity. - ANSWER 12.6%
_______ of working adults around the world perceive entrepreneurs as having high status. - ANSWER 68%
Entrepreneur: One who creates a new business in the face of ______ and _______ for the purpose of achieving ______ and ______________. - ANSWER risk, adversity ; profit, creative value
Small businesses:
- Make up _____of the 28.8 million businesses in the United States - ANSWER 99.7%
Gazelles - ANSWER small companies that are growing at 20% or more per year with at least $100,000 in annual sales; they create 70% of net new jobs in the economy
- Idea Assessment:
-The process of examining a particular _____ in the market, developing a
or service exists
Bargaining Power of Suppliers - ANSWER • The greater the leverage of suppliers, the less attractive the industry.
- Industry is more attractive when:
- Many suppliers sell a commodity product
- Substitutes are available
- Switching costs are low
- Items account for a small portion of the cost of finished products
Bargaining Power of Buyers - ANSWER • Buyers' influence is high when number of customers is small and cost of switching to a competitor's product is low.
- Industry is more attractive when:
- Customers' switching costs are high
- Number of buyers is large
- Customers want differentiated products
- Customers find it difficult to collect information for comparing suppliers
- Items account for a small portion of customers' finished products
Threat of New Entrants - ANSWER • The larger the pool of potential new
entrants, the less attractive an industry is.
- Industry is more attractive to new entrants when:
- Advantages of economies of scale are absent
- Capital requirements to enter are low
- Cost advantages are not related to company size
- Buyers are not loyal to existing brands
- Government does not restrict the entrance of new companies
Threat of Substitutes - ANSWER • Substitute products or services can turn an industry on its head.
- Industry is more attractive to new entrants when:
- Quality substitutes are not readily available
- Prices of substitute products are not significantly lower than those of the industry's products
- Buyers' costs are high
Five Forces Matrix - ANSWER Assign a value to rate the importance of each of the five forces to the industry on a 1 (not important) to 5 (very important) scale. Then assign a value to reflect the threat that each force poses to the industry. Multiply the importance rating in column 2 by the threat rating in column 3 to produce a weighted score. Add the weighted scores in column 3 to get a total weighted score. This score measures the industry's
Proposition
The Business Modeling Process: phase three - ANSWER Business Prototyping
The Business Modeling Process: phase four - ANSWER Pivots: the process of making changes and adjustments in the business model on the basis of the feedback a company receives from customers.
lean start-up - ANSWER a process of rapidly developing simple prototypes to test key assumptions by engaging real customers
minimal viable product - ANSWER the simplest version of a product or service with which an entrepreneur can create a sustainable business
Ethics - ANSWER a branch of philosophy that studies and creates theories about the basic nature of right and wrong, duty, obligation, and virtue; as it relates to human conduct.
Social responsibility - ANSWER how an organization responds to the needs of the many elements in society.
Moral Management - ANSWER wide-ranging method of treatment that
focuses on a patient's social, individual, and occupational needs
The competitive Test: - ANSWER evaluates:
A company's position relative to its competitors. Management's ability to create a company that will gain an edge over its rivals.
The value Test: - ANSWER proving that:
A venture offers investors or lenders an attractive rate of return or a high probability of repayment.
The reality Test: - ANSWER proving that:
A market really does exist for your product or service. You can actually build or provide it for the cost estimates in the plan.
A __________ is what the customer gains from the product or service feature. - ANSWER benefit
Porter's Three Strategies - ANSWER cost leadership, differentiation, and focus
- Analyze a firm's competitive advantages and create a marketing strategy to communicate its value proposition to the target market.
Unique Selling Proposition - ANSWER A key customer benefit of a product or service that sets it apart from its competition.
Branding - ANSWER communicating a USP to the target market in a consistent and integrated manner.
Total Quality Management (TQM) - ANSWER - Quality in the product or service itself.
- Quality in every aspect of the business and its relationship with the customer.
- Continuous improvement in quality.
time compression management (TCM): - ANSWER - Speed new products to market.
- Shorten customer response time in manufacturing and delivery.
- Reduce the administrative time required to fill an order.
Eleven Myths of E-Commerce - ANSWER Myth 1 If I launch a site, customers will flock to it.
Myth 2 Online customers are easy to please.
Myth 3 Launching an E-Commerce Site Is Free - Or at Least Really Inexpensive
Myth 4 Making money on the Web is easy.
Myth 5 Privacy is not an important issue.
Myth 6 I don't need a strategy to sell online.
- The most important part of an e-commerce effort is technology.
- Customer service is not important.
- Flashy Web sites are better than simple ones.
- It's what's up front that counts.
- My business doesn't need a Web site.
Virtual order fulfillment - ANSWER A fulfillment strategy in which a company forwards customers' orders to a wholesaler or distributor who then ships the product to the customer with the online merchant's label on it.
Multichannel Selling - ANSWER Meet customers wherever they want to do business with a personalized shopping experience similar to that of a brick-and-mortar store experience.
Web analytics - ANSWER Tools that measure a Web site's ability to attract customers, generate sales, and keep customers coming back.
Latency - ANSWER The time between customers' purchases.
Search engine ranking - ANSWER Shows where a company's Web site ranks in search
engines' results pages.
Business Model Canvas: 9 elements - ANSWER customer segments, value proposition, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, cost structure
