Question 1

By selecting a particular market niche,an entrepreneur decides on the basic direction of the firm-a choice that affects the very nature of the business.What kind of decision is this?

Accepted Answer

This is a strategic decision because it involves choosing the overall direction of the business and the target market. The decision will have a significant impact on the long-term success of the business.

Question 2

Which component of a SWOT analysis is "a strong network of personal contacts"?

Accepted Answer

A strong network of personal contacts is a strength in a SWOT analysis.

Question 3

Which idea for a new start-up comes from an accidental discovery?

Accepted Answer

The accidental discovery in this scenario is the sharpshooter shooting holes in her boyfriend's jeans during an argument, which leads to the discovery that the jeans actually look fashionable with the holes. This could lead to a new start-up selling distressed jeans or other clothing with intentional holes or unique designs. The other options do not involve an accidental discovery leading to a new start-up idea.

Question 4

Jennifer is selling a line of sterling silver jewellery at the college she attends.Jennifer is identifying pieces that she can market most effectively to females in their 20s,females over 30,and males.What is Jennifer doing?

Accepted Answer

Jennifer is segmenting her market by identifying three different target groups based on age and gender. She is tailoring her product offering and marketing message to each group, which is an example of market segmentation.

Question 5

Jack wants customers that purchase from his chain of hardware stores to feel they received the best value possible.To accomplish this Jack continually negotiates the best arrangements possible with his suppliers.Which competitive advantage strategy is Jack most focused on?

Accepted Answer

Jack's focus on negotiating the best arrangements possible with suppliers indicates that he is a cost-based competitor, aiming to offer the lowest prices to customers through efficient supply chain management.

Question 6

Elle loves to cycle between small towns in Northern Ontario.This inspired her to use her own maps of safe cycling roads to create an Internet subscription business for other cycling enthusiasts.What was the source of Elle's new business idea?

Accepted Answer

The answer of Elle loves to cycle between small towns...

Question 7

When China opens its doors to foreign suppliers Katie's engineering firm was able to secure contracts to help build infrastructure in Chinese cities.Which trend is this related to?

Accepted Answer

This is related to the global trend, as it involves international business activities and the opening of a country's market to foreign suppliers, indicating a move towards globalization.

Question 8

After the United States increased the duty on wax candles being sold from Asia into America,Joy focused more on Canada to sell her imported candles.Which trend is this related to?

Accepted Answer

The increase in duty on wax candles being sold from Asia into America is a political/legal trend, as it is related to trade policies and regulations. Joy's decision to focus more on Canada as a market for her imported candles is also related to this trend, as she is looking for ways to navigate the changing trade policies and regulations.

Question 9

A company raises its prices and customers have no choice but to pay because there are no other substitute products.Which of Michael Porter's competitive forces is this an example of?

Accepted Answer

This scenario exemplifies the bargaining power of suppliers, where the company acts as the supplier and has significant power due to the lack of substitute products, allowing it to raise prices without losing customers.

Question 10

George's company has sold a line of nature paperweights specifically targeted at middle-aged women who like to collect decorative items with natural themes.Sales have been declining steadily as market segments are increasingly sharing similar needs and desires.What is the most likely reason for this decline in sales?

Accepted Answer

The declining sales are most likely due to the fact that differences across market segments are narrowing, meaning that middle-aged women who collect decorative items with natural themes may be finding similar products elsewhere or are no longer as interested in this specific product line. The other options (A, C, and D) are not related to the reason for declining sales in this scenario.

Question 11

Which environment is very broad and includes factors that affect all businesses in society?

Accepted Answer

The general environment includes factors such as the economy, government policies, demographics, technology, and socio-cultural trends which impact all businesses in society. The industry environment pertains to factors specific to a particular industry, while the market environment refers to factors that affect a particular company's target market. The global environment pertains to factors that impact businesses on a global scale.

Question 12

Parmeet found that her first-year college students were less and less prepared to be academically successful.Using her teaching experience she created a business to provide weekend camps for students to become more prepared for their postsecondary education.Which approach did Parmeet use to identify her business idea?

Accepted Answer

The answer of Parmeet found that her first-year college students...

Question 13

Kayla is evaluating new business ideas to determine which have the greatest potential to provide the level of profits needed to enable her to live a lavish lifestyle.Which key start-up question is Kayla addressing?

Accepted Answer

Kayla is determining which business ideas have the potential for high profits, so she is focusing on identifying genuine opportunities that promise attractive financial rewards. Option A addresses brainstorming start-up ideas, option B is about finding additional ideas, and option D focuses on competitive advantage rather than financial potential.

Question 14

According to Michael Porter,when can a focus strategy erode?

Accepted Answer

When new firms subsegment the industry, a focus strategy can erode because the target segment becomes less distinct and the firm may lose its competitive advantage.

Question 15

Which strategy focuses on one market even when many markets exist?

Accepted Answer

Single-segmentation strategy focuses on targeting and serving one specific market segment while ignoring other segments. This approach allows businesses to develop a specialized marketing mix tailored to the specific needs of the chosen segment, resulting in more effective marketing and higher customer satisfaction. However, it also puts the business at risk if the targeted market segment fails to respond positively to the marketing efforts.

Question 16

Pat's back problems forced him to change his truck driving career.He reviewed business magazines and business sites and eventually purchased a truck wash business.What was the source of Pat's new business idea?

Accepted Answer

Pat deliberately searched for a new business idea by reviewing business magazines and sites before purchasing the truck wash business.

Question 17

Harveer is starting a business to sell a product she feels will make fastening loads to truck beds more efficient.What is Harveer's new business idea based on?

Accepted Answer

Harveer's new business idea is based on a new benefit idea, which is making fastening loads to truck beds more efficient.

Question 18

George is fearful of a new company he sees at a tradeshow that is selling a similar product that his company currently distributes but at a much better price.Which component of SWOT is causing concern for George?

Accepted Answer

The situation described relates to a new company selling a similar product at a better price, which is a direct threat to George's company. Therefore, the component of SWOT causing concern for George is the threat.

Question 19

What is the most productive source of start-up ideas?

Accepted Answer

Prior work experience is often cited as the most productive source of start-up ideas because it provides individuals with specific insights into industry needs, customer problems, and operational challenges, enabling them to identify opportunities for innovation and improvement.

Question 20

Which of the following is an intangible organizational resource?

Accepted Answer

Patents and copyrights are intangible resources as they are non-physical assets that provide competitive advantages to an organization.

Quiz 2: Start-Up and the Need for Competitive Advantage