Deck 2: Defining Your E-Business Idea

Question 1

An entrepreneur should have leadership abilities in order to successfully start, operate, and grow his or her e-business.

Answer 1

True

Question 2

A stress management plan is not important to an entrepreneur who is starting his or her own business.

Answer 2

False

Question 3

Organizational skills and self-confidence are not important entrepreneurial abilities.

Answer 3

False

Question 4

Starting your own business is a great way to set your own work schedule which typically includes plenty of time off to enjoy other pursuits.

Question 5

Before beginning an entrepreneurial adventure, you should carefully review your ongoing financial needs and set aside funds to cover those needs for some time.

Question 6

To begin the entrepreneurial process, you must first decide whether to buy an existing business or start a new one.

Question 7

The time and effort an entrepreneur puts in to starting his or her own business is called sweat equity.

Question 8

The entrepreneurial process is a multistep process that begins with determining entrepreneurial abilities and ends with harvesting a business.

Question 9

An entrepreneur can harvest his or her own business by letting it become a "cash cow," by going public, or by selling the business.

Question 10

E-business ideas span the spectrum from selling hard-to-find food products directly to consumers, to auctioning excess oil and gas capacity, to offering online mediation services, to providing Web site hosting services, and more.

Question 11

Startup e-businesses based on flawed e-business models or unsound business practices can still expect to be successful in today's exciting global e-business economy.

Question 12

An important factor in an e-business's ultimate success or failure is how well its original e-business idea adapts to changes in the marketplace.

Question 13

The network effect is the phenomena in which an e-business continues to operate successfully in the face of rapid growth.

Question 14

Viral marketing is an innovative marketing idea that exploits the network effect to rapidly spread information about a product or service across a marketplace.

Question 15

Scalability refers to the growing value of e-business to the economy as more and more consumers and businesses conduct business transactions online.

Question 16

Low-cost Internet technologies have made it more difficult for many new e-businesses to enter an online marketplace.

Question 17

The growth in the number of C2C auction sites, such as eBay, provides a good example of the ease with which new e-businesses can enter a virtual marketplace.

Question 18

An e-business's ability to secure first-mover advantage and name identification guarantees its success over its competitors.

Question 19

The e-business marketspace is characterized by rapid knowledge transfer and the need for entrepreneurs to be able to make decisions quickly.

Question 20

The success of Amazon.com is partly based on the company's adaptability to changes in the marketplace.

Question 21

The rapid pace of change in the global e-business economy has little affect on the way existing e-businesses function.

Question 22

The potential for an entrepreneur to expand the market for his or her e-business's products and services is an inherent advantage of doing business online.

Question 23

An online presence created by a Web site affords a company greater business visibility even if it sells its products offline through traditional sales channels.

Question 24

The only reason for a business to publish a Web site is to sell its products and services online.

Question 25

Publishing a Web site is a way to guarantee that a company will successfully expand the market for its products and services.

Question 26

Changing market conditions can affect how well an entrepreneur executes his or her e-business idea.

Question 27

The inherent communication power of the Internet and the Web can be used to draw and keep customers by creating warm one-to-one relationships with them.

Question 28

Access to the Internet and the Web has created a business environment in which traditional business ideas are rewarded and new ideas are discouraged.

Question 29

The implementation of Internet and Web technologies allows brick-and-click companies and pure-play e-retailers to reduce their operating costs.

Question 30

An important leadership trait for a successful entrepreneur is:

A) the ability to relate to others in a positive way
B) a high-energy level
C) the ability to organize business activities
D) the opportunity to set his or her own work schedule

Question 31

Which of the following entrepreneurial abilities is essential to getting things done on time?

A) self-confidence
B) high-energy personality
C) leadership
D) organizational skills

Question 32

As a leader, an entrepreneur must be able to:

A) locate business-critical information quickly
B) communicate the mission and goals of his or her business to others
C) organize business activities
D) stay on schedule

Question 33

When entrepreneurship takes place inside a large organization, it is sometimes called:

A) intrapreneurship
B) extrapreneurship
C) interpreneurship
D) None of the above

Question 34

A successful entrepreneur typically:

A) works no more than 40 hours a week
B) is noncompetitive
C) delegates leadership to others
D) believes in his or her e-business idea

Question 35

Successful entrepreneurs are generally:

A) independent
B) goal-oriented
C) creative
D) All of the above

Question 36

Stage 1 in the entrepreneurial process involves:

A) harvesting the business
B) deciding to buy or start a business
C) assessing your entrepreneurial interests and abilities
D) defining the new business idea

Question 37

Harvesting a business by going public means to:

A) invest additional sweat equity
B) continue to operate the company to generate cash
C) sell the business
D) issue a public stock offering or IPO

Question 38

In which stage of the entrepreneurial process would you create a business plan?

A) One
B) Two
C) Three
D) Four

Question 39

A business owner's own time and effort invested in a startup company is called:

A) sweat equity
B) creating a cash cow
C) going public
D) owner's equity

Question 40

In which stage of the entrepreneurial process would you secure financing for your startup e-business?

A) One
B) Three
C) Four
D) Five

Question 41

Which of the following factors is unique to doing business online?

A) network effect
B) customer service
C) value chains
D) brick-and-mortar storefront

Question 42

The phenomena in which the total value of a product, service, or technology grows as more and more people use it is called:

A) scalability
B) viral marketing
C) the network effect
D) first-mover advantage

Question 43

When the value of an e-business's products and services increase because of distribution over the Internet and the Web, the e-business is exploiting:

A) name identification
B) first-mover advantage
C) scalability
D) the network effect

Question 44

Which of the following e-businesses owed its early and rapid success to an innovative marketing idea now called viral marketing?

A) AllAdvantage
B) Hotmail
C) Rackspace Managed Hosting
D) Third Voice

Question 45

The marketing technique that exploits the power of the network effect to rapidly spread information about a new e-business and its products or services is called:

A) first-mover advantage
B) viral marketing
C) name identification
D) scalability

Question 46

The ability of an e-business idea to continue to function in the face of sudden growth is called:

A) the network effect
B) scalability
C) first-mover advantage
D) viral marketing

Question 47

An example of an unsuccessful startup e-business that failed to recognize the power of the network effect and the importance of scalability is:

A) Amazon.com
B) Hotmail
C) AllAdvantage
D) Hometown Favorites

Question 48

Which of the following factors can make it easier for a new business to enter electronic markets?

A) the network effect
B) a high-energy entrepreneur
C) low-cost technologies
D) increased demand for products

Question 49

Which of the following factors is a major reason for the growth of C2C auction sites?

A) generation of revenues without having to manage, warehouse, or distribute products
B) easy-to-install and manage auction site software
C) easy access to auctions sites by both buyers and sellers
D) All of the above

Question 50

The competitive advantage that occurs because an e-business beats everyone else to the marketplace with specific products or services is called:

A) first-mover advantage
B) name identification
C) scalability
D) going public

Question 51

The competitive advantage that may occur when an e-business or its products or services become synonymous with generic products or services (for example "Kleenex" and "tissue") is called:

A) name identification
B) first-mover advantage
C) the network effect
D) entrepreneurship

Question 52

Which of the following e-businesses successfully expanded its market by adding an e-business component to its already successful brick-and-mortar business?

A) Amazon.com
B) Ticketmaster
C) Rackspace Managed Hosting
D) Hotmail

Question 53

Which of the following companies uses the Internet and the Web to acquire greater business visibility while selling its products through traditional channels?

A) Amazon.com
B) Hotmail
C) Chrysler
D) Hometown Favorites

Question 54

Which of the following e-businesses is based on a new e-business idea made possible by Internet and the Web.

A) Best Buy
B) Barnes & Noble
C) Cybersettle
D) None of the above

Question 55

A(n)_______________is someone who assumes the risks associated with starting and running his or her own business.

Question 56

To successfully start, operate, and grow his or her business, an entrepreneur must be able to_______________others.

Question 57

Many successful entrepreneurs display their_______________natures early in life in their approach to school, hobbies, and sports.

Question 58

The_______________is divided into several stages or steps as a person moves from wanting to start his or her own business to starting, operating, and harvesting it.

Question 59

An entrepreneur must be prepared to invest his or her own_______________equity in a startup e-business.

Question 60

The_______________explains how the overall value of a product or service grows as more and more people use the product or service.

Question 61

Successful e-business entrepreneurs develop imaginative ways of exploiting the_______________in order to market products and services to new customers.

Question 62

The rapid spread of information about products and services by electronic word of mouth is sometimes called_______________marketing.

Question 63

E-business ideas that do not continue to function well when under the pressure of unexpected business growth lack_______________.

Question 64

The C2C_______________marketplace provides a good example how low-cost technologies can make it easy for many new e-businesses to enter an online marketplace and become competitive.

Question 65

The very successful real-world e-business that exploited low-cost technologies, first-mover advantage, and name identification to become the leader in the C2C auction marketplace is_______________.

Question 66

The e-business marketspace is characterized by_______________and the need to make business decisions quickly.

Question 67

_______________is an example of a pure play e-retailer with a strong adaptability to change as illustrated by its ability to modify its business model when necessary and expanded its product offerings to satisfy changes in the marketplace.

Question 68

Ticketmaster, Wal-Mart, and Costco are examples of existing brick-and-mortar businesses that successfully revamped their business model to add a(n)_______________component.

Question 69

The_______________enables companies to get their name and products or services in front of more potential customers than ever before.

Question 70

Market conditions, execution, and_______________all play an important role in exploiting the Internet and the Web to expand the market for an e-business's products or services.

Question 71

Simply publishing a_______________is no guarantee that a company will successfully exploit the communication power of the Internet and Web to expand the market for its products and services.

Question 72

Changing_______________conditions may impact how well a business will be able to execute its e-business idea.

Question 73

One of the biggest benefits of doing business online is the potential to reduce operating_______________.

Question 74

Discuss five entrepreneurial traits or abilities that are common to individuals who successfully start, operate, and grow their own businesses.

Question 75

Describe the five stages of the entrepreneurial process.

Question 76

Discuss the three major reasons for the growth of C2C e-business auction sites.

Question 77

Describe how existing businesses or new e-businesses can exploit the inherent advantages of doing business online and give examples of real-world businesses that have successfully done so.