Deck 3: Generating and Exploring New Entries

Question 1

The Opening Profile to Chapter 3 of Chris Griffiths and Garrison Guitars is a story of not just innovation, but of perseverance and intrapreneurship.

Answer 1

True

Question 2

The entrepreneurial process described in the text has only two stages: identifying an entrepreneurial opportunity, and then creating the new business venture to capitalize on it.

Answer 2

False

Question 3

The stages of the entrepreneurial process discussed in the text are progressive and if not followed sequentially, can often lead to new business failure.

Answer 3

False

Question 4

Because most good business opportunities appear suddenly, the entrepreneur is rarely able to identify opportunities early enough to exploit them.

Question 5

Consumers are often the best source of new venture ideas for entrepreneurs.

Question 6

Business venture risks and rewards are determined by the market size and the length of the window of opportunity.

Question 7

When evaluating new venture opportunities, the risks reflect the market, competition, technology, and amount of capital involved.

Question 8

To an entrepreneur, an opportunity assessment plan is simply another term for a business plan.

Question 9

To an entrepreneur, the difference between a good idea and a true opportunity is often determined by research.

Question 10

Quantitative opportunity assessment methods include the income statement approach and the market analysis approach.

Question 11

The difference between the income statement approach and the market analysis approach to opportunity assessment is that the income statement approach does not consider market size when forecasting sales revenue.

Question 12

The first stage in determining retail market share is to estimate as accurately as possible the size of your competitor's store,

Question 13

The final two segments of the income statement approach are determining the start-up costs of the business and calculating a ROI

Question 14

At each stage of the product planning and development process, criteria for evaluation need to be established.

Question 15

The product planning and development process: The Second stage in product development Process is the idea stage.

Question 16

The product planning and development process: In the concept stage, the refined product idea is tested to determine consumer acceptance.

Question 17

The product planning and development process: In the product development stage, consumer reaction to the physical product is determined.

Question 18

The product planning and development process: This last step in the evaluation process, the test marketing stage, provides "theoretical"sales results, which indicate the acceptance level of consumers.

Question 19

It is important to note that the opportunity assessment plan is not one-size-fits-all.

Question 20

Although formal mechanisms are generally found within more established companies, most entrepreneurs use informal sources for their ideas, such as being sensitive to the complaints and chance comments of friends and associates.

Question 21

In the Opening Profile for Chapter 3, Chris Griffiths of Garrison Guitars was faced with which of thefollowing problem(s) early in his company's history?

A) He could not find enough employees to manufacture his guitars.
B) Investors expected him to secure 7,000 orders from his first trade show, using only working prototypes of the finished product.
C) As a traditionalist, he resisted using innovation and technology to increase his rate of production.
D) The market did not consider his products to be innovative enough to warrant attention.
E) All of the answers are correct.

Question 22

In the Opening Profile for Chapter 3, Chris Griffiths of Garrison Guitars used which of the following approaches to managing his employees?

A) a traditional, top-down, hierarchical approach to management
B) a highly competitive team approach within the company
C) establishing and maintaining a culture of intrapreneurship
D) he embraced administrative science to help reduce the chaos
E) None of the answers apply.

Question 23

Which of the following is not a distinct phase of the entrepreneurial process, as discussed in the text?

A) management of the resulting enterprise
B) development of the business plan
C) integration of the operational plan
D) identification and evaluation of the opportunity
E) determination of the required resources

Question 24

Scanning and evaluating the competitive environment would take place in which of the distinct phases of the entrepreneurial process?

A) identification and evaluation of the opportunity
B) development of the business plan
C) determination of the required resources
D) integration of the operational plan
E) management of the resulting enterprise

Question 25

To be successful, the entrepreneurial process should __________.

A) be followed progressively, taking care to finish each phase before beginning another
B) be followed sequentially, taking care to finish each phase before beginning another
C) work on all four phases simultaneously, as they are interdependent
D) be followed progressively, but recognizing that all four phases are interdependent
E) None of the answers apply.

Question 26

As described in the text, the first phase of the entrepreneurial process is __________.

A) identification and evaluation of the opportunity
B) development of the business plan
C) determination of the required resources
D) integration of the operational plan
E) management of the resulting enterprise

Question 27

As described in the text, the second phase of the entrepreneurial process is __________.

A) identification and evaluation of the opportunity
B) development of the business plan
C) determination of the required resources
D) integration of the operational plan
E) management of the resulting enterprise

Question 28

As described in the text, the third phase of the entrepreneurial process is __________.

A) identification and evaluation of the opportunity
B) development of the business plan
C) determination of the required resources
D) integration of the operational plan
E) management of the resulting enterprise

Question 29

As described in the text, the fourth phase of the entrepreneurial process is __________.

A) identification and evaluation of the opportunity
B) development of the business plan
C) determination of the required resources
D) integration of the operational plan
E) management of the resulting enterprise

Question 30

One entrepreneur monitors the play habits and toys of her nieces and nephews. This is a good example of__________.

A) opportunity identification
B) developing a business plan
C) identifying resources and resource gaps
D) implementing a growth strategy
E) None of the answers apply.

Question 31

Which of the following could be a good source for identifying business opportunities?

A) consumers
B) friends and business associates
C) channel of distribution members
D) technically-oriented individuals
E) All of the answers are correct.

Question 32

As discussed in the text, with regards to identification of opportunities, successful entrepreneurs__________.

A) dream about them constantly
B) rely on outside consultants to provide them with ideas
C) keep their eyes and mind open to opportunities at all times
D) employ formal mechanisms to identify new opportunities
E) None of the answers apply.

Question 33

As stated in the text, perhaps the most critical element of the entrepreneurial process would be__________.

A) determination of resources required
B) identification of opportunities
C) development of the business plan
D) screening and evaluation of identified opportunities
E) None of the answers apply.

Question 34

The evaluation of an identified opportunity should include which of the following?

A) length of the opportunity
B) real and perceived value
C) risks and returns
D) fit with personal skills and goals of the entrepreneur
E) All of the answers are correct.

Question 35

As defined in the text, the time period available for creating the new venture is known as__________.

A) the open door to prosperity
B) the risk portal
C) the window of opportunity
D) the investment trigger
E) None of the answers apply.

Question 36

As discussed in the text, the primary basis for determining the risks and rewards of an opportunity is (are)__________.

A) the competitive environment
B) the market size and length of the window of opportunity
C) the barriers to market entry that may exist for the industry
D) the resource commitment necessary to exploit the opportunity
E) None of the answers apply.

Question 37

When evaluating an opportunity, the risks involved are based on which of the following?

A) the market
B) competition
C) technology
D) amount of capital needed
E) All of the answers are correct.

Question 38

As described in the text, an opportunity assessment plan __________.

A) should focus on the opportunity and not the entire plan
B) is shorter than a business plan
C) provides the basis for making the decision to act on the opportunity
D) All of the answers are correct.

Question 39

The assessment of an opportunity should involve answering which of the following question(s)?

A) What market need does it fill?
B) What competition exists in this market?
C) Where is the money to be made in this activity?
D) What market research data can be obtained to describe this market need?
E) All of the answers are correct.

Question 40

Ultimately, when assessing an opportunity, entrepreneurs should use __________ to help them differentiate between a good idea and a true opportunity.

A) research
B) common sense
C) past history
D) gut feel
E) None of the answers apply.

Question 41

A qualitative opportunity assessment would include which of the following measures?

A) market size and growth rates
B) type of work desired
C) market structure
D) desired return on investment
E) All of the answers are correct.

Question 42

A quantitative opportunity assessment would include which of the following measures?

A) market share attainable
B) work schedule desired
C) past experience
D) personal goals
E) All of the answers are correct.

Question 43

Qualitative opportunity assessment methods are used primarily for which of the following reason(s)?

A) They provide a more objective measurement of potential than most quantitative methods.
B) They are faster to calculate than other assessment methods.
C) They address quality of life and personal satisfaction issues better than quantitative measurements.
D) They require additional research to complete, thus providing a second opinion.
E) None of the answers apply.

Question 44

Large-scale opportunity assessment: For a small-to-medium business, an entrepreneur will want to deal with the following questions:

A) Business
B) customers
C) Environment
D) Marketing Plan
E) All of the answers apply

Question 45

The market analysis approach is used to assess ideas that will

A) Generate instant revenue
B) Generate future revenue
C) Generate more than $1 million in revenue and achieve significant levels of growth.
D) Consider reasonable investments less than $100,000
E) Be profitable for under $10,000

Question 46

The market analysis approach consists of assessing the attractiveness of an opportunity based on the

A) Market structure
B) Market size
C) Growth rate
D) Market capacity
E) All of the answers apply

Question 47

The first step in the income statement approach to opportunity assessment is to __________.

A) determining market potential
B) determining retail market share
C) determining income and expenses
D) determining start-up costs and return on investment
E) None of the answers apply.

Question 48

The purpose of determining the market potential in the income statement approach to opportunity assessment is to __________.

A) provide an accurate measurement of what it will cost to run the proposed business
B) forecast sales revenue by dividing market potential by estimated retail market share
C) to set price strategy by analyzing what the market will bear
D) forecast sales revenue by multiplying market potential by estimated retail market share
E) None of the answers apply.

Question 49

The final two segments of the income statement approach are determining the start-up costs of the business and

A) Picking your partners
B) calculating a return on investment (ROI)
C) Choosing the website domain name
D) Registering the company name
E) None of the answers apply.

Question 50

In order to gain the financing needed to create a venture, entrepreneurs must often give up:

A) some control of the new venture.
B) a share of the ownership.
C) patent rights.
D) some control of the new venture and a share of the ownership

Question 51

The purpose of calculating the potential return on investment in the income statement approach to opportunity assessment is to __________.

A) provide qualitative support for the new business venture
B) provide a basis for comparing the expected financial results to other investment opportunities
C) calculate how much initial investment will be required for the new venture
D) determine how much the owner may draw as salary in the first year of the business venture
E) None of the answers apply.

Question 52

When using the income statement approach to opportunity assessment, multiplying the number of households within your planned market area by the annual product category spending for your business produces which of the following important measures?

A) retail market share
B) retail capacity
C) geographic spending
D) market potential
E) None of the answers apply.

Question 53

When using the income statement approach to opportunity assessment, the percentage of business you hope to attract within your planned market area is known as __________.

A) market potential
B) retail market share
C) forecasted spending
D) market capacity
E) None of the answers apply.

Question 54

When using the income statement approach to opportunity assessment, the basis for estimating retail market share is __________ plus or minus adjustments for other qualitative factors.

A) comparative store size
B) standard inventory turns for your industry
C) comparative spending on advertising
D) location
E) None of the answers apply.

Question 55

When using the income statement approach to opportunity assessment, return on investment (ROI) is calculated by __________.

A) multiplying market potential by estimated retail market share
B) dividing the initial investment required to start the business by the projected net income
C) subtracting the initial investment required to start the business from the projected net income
D) multiplying the cost of goods sold by projected expenses and then subtracting the initial investment
E) None of the answers apply.

Question 56

As discussed in the text, when calculating return on investment, how should a potential entrepreneur treat their salary?

A) Ignore it in the calculation as the entrepreneur keeps all of the net income anyway.
B) Include a reasonable amount as an expense if the entrepreneur plans to work at the business full-time
C) Add it to the perceived risk factor in the ROI calculation as it is one of the risks of being an entrepreneur
D) Use a profit sharing factor to keep the salary paid within reasonable limits
E) None of the answers apply.

Question 57

When determining market share using the income statement approach to opportunity assessment, manufacturing industries use which of the following?

A) production capacity
B) selling capacity
C) market potential
D) competitive survey
E) None of the answers apply.

Question 58

When determining market share using the income statement approach to opportunity assessment, service industries use which of the following?

A) production capacity
B) selling capacity
C) competitive survey
D) market potential
E) None of the answers apply.

Question 59

The market analysis approach to opportunity assessment is generally used for which of the following?

A) small to medium-sized businesses with sales under $1 million
B) manufacturing businesses with less than 50,000 square meters of production facility
C) service providers with less than 25 employees
D) large businesses with sales of over $1 million and significant growth opportunity
E) All of the answers are correct.

Question 60

The market analysis approach to opportunity assessment uses which of the following measures?

A) market structure
B) market size and growth rates
C) market capacity
D) market share attainable
E) All of the answers are correct.

Question 61

The product planning and development process: Promising new product ideas should be identified and impractical ones eliminated in the

A) Idea Stage
B) Concept Stage
C) Product development stage
D) Test Marketing Stage
E) All of the answers are correct

Question 62

The product planning and development process: the refined product idea is tested to determine consumer acceptance

A) Idea Stage
B) Concept Stage
C) Product development stage
D) Test Marketing Stage
E) All of the answers are correct

Question 63

The product planning and development process: consumer reaction to the physical product is determined.

A) Idea Stage
B) Concept Stage
C) Product development stage
D) Test Marketing Stage
E) All of the answers are correct

Question 64

The product planning and development process: actual sales results, which indicate the acceptance level of consumers.

A) Idea Stage
B) Concept Stage
C) Product development stage
D) Test Marketing Stage
E) All of the answers are correct

Question 65

When looking at market structure in the market analysis approach to opportunity assessment, an entrepreneur will use which of the following criteria?

A) barriers to market entry
B) amount of competition
C) relative maturity of the market
D) amount of cash investment required to penetrate the market
E) All of the answers are correct.

Question 66

In the determination of the resources required phase of the entrepreneurial process, an entrepreneur should consider __________.

A) how much and what type of resources will be needed
B) the downside risks associated with insufficient or inappropriate resources
C) the amount of control that must be given up in order to acquire the resources needed for the enterprise
D) All of the answers are correct.
E) None of the answers apply.

Question 67

Which of the following would not be considered in the determination of the resources required phase of the entrepreneurial process?

A) how much and what type of resources will be needed
B) the downside risks associated with insufficient or inappropriate resources
C) what type of control system to use to identify problems
D) the amount of control that must be given up in order to acquire the resources needed for the enterprise
E) an understanding of resource supplier needs

Question 68

Describe the four distinct phases of the entrepreneurial process, as discussed in the text.

Question 69

What happens in the "Concept Stage"of product development.

Question 70

Define and describe an opportunity assessment plan. How is this plan different from a business plan?

Question 71

Describe the measures that might be used in a qualitative opportunity assessment method?

Question 72

Using the income statement approach to opportunity assessment, briefly explain how you would estimate sales revenue using the concept of market share for a retailer, manufacturer, and a service provider.

Question 73

Describe the difference between managerial and entrepreneurial decision making, using the five key business dimensions discussed in the text.

Question 74

Describe the characteristics necessary to develop a climate for intrapreneurship within an organization.