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Mana3325 test 2 quiz
Ch quizes for 5-8 from booksite for Entrepreneurship sucessfully... 4e
| Question | Answer |
|---|---|
| When studying an industry, key questions an entrepreneur must answer before pursuing the idea of starting a firm are: Is the industry a realistic place for a new venture to enter and _____, _____ | Does the industry contain markets that are ripe for innovation or are underserved, Are there positions in the industry that will avoid some of the negative attributes of the industry as a whole? |
| How a company is situated relative to its competitors is referred to as _____. | Position |
| What is a framework for understanding the structure of an industry? | the five competitive forces model |
| The video industry is becoming less attractive as movie studios perfect the technology enabling consumers to download movies via computer. This is best an example of which industry competitive force? | threat of substitutes |
| What barriers to entry into an industry would be most relevant for a firm considering the airline industry? | capital requirements |
| What's the biggest threat to a new firm's viability when creating a new market? | larger, better-funded firms copying them |
| Which industry type is characterized by a large number of firms of approximately equal size? | fragmented industry |
| What are strategies entrepreneurial firms can employ in declining industries | an early adoption strategy. |
| In assessing competitors it might face in the soft drink (cola) industry, how would an entrepreneur characterize a coffee maker that has added iced coffee drinks to its line-up of hot coffee? | an indirect competitor |
| What phrase best describes the information gathered by a firm to learn about its competitors? | competitive intelligence |
| T/F Most studies have shown that industry-specific factors do NOT contribute to a firm's profitability. | False |
| T/F Economies of scale occur when mass-producing a product results in lower average costs. | True |
| T/F It is conceivable for a start-up venture to create barriers of entry of their own in order to reduce the threat of new entrants. | True |
| T/F In most industries, the major determinant of industry profitability is the level of competition among the firms already in the industry. | True |
| T/F There are several factors that determine the nature and intensity of the rivalry among existing firms in an industry; one of them is supplier concentration. | False |
| T/F An example of backward integration is a supplier deciding to enter a buyer's industry. | False |
| T/F A declining industry is an industry that is experiencing slow or no increase in demand, has mostly repeat versus new customers, and has limited product innovation. | False |
| T/F A doll company that varies its doll's facial features, hair and outfits depending on the culture and characteristics of the children in the countries it markets to, is pursuing a multidomestic strategy | True |
| T/F In entering a global industry, it would make sense for a food company to pursue a global strategy rather than a multidomestic one. | False |
| T/F After a firm has gained an understanding of the industry and the target market in which it plans to compete, the next step is to complete a competitor analysis. | Tue |
| What is Michael Porter's five competitive forces model? | The five competitive forces model, developed by Michael Porter, a Harvard professor, is a framework for understanding the structure of an industry. |
| The framework of the five competitive forces model is comprised of the forces that determine industry profitability. The forces are: | -the threat of substitutes,-the entry of new competitors,-rivalry among existing firms,-the bargaining power of suppliers, -the bargaining power of buyer |
| What is competitive analysis and how do you obtain it? | Competitive analysis is information gathered by a firm to help it understand the strategies and behaviors of its competitors. You obtain it any way you can, as long as it is ethical! |
| Some common ways you obtain it competitive analysis: | -published reports filed with the SEC,-conferences, and trade shows,-the competitor's Web site, -industry publications, and Web sites -the competitor's customers |
| What is a business model? | A firm's plan for how it competes and creates value to sustain itself. |
| What do you call the string of activities that move a product from the raw material stage, through manufacturing and distribution, and ultimately to the end user? | value chain |
| An effective business model address | how a firm competes, how a firm acquires and uses its resources, how a firm interfaces with its customers. |
| What describes why a business exists and what its business model is supposed to accomplish? | the firm's mission statement |
| A cost leadership strategy requires a business model that is focused on | efficiency, cost minimization, volume. |
| _____ is a resource or capability that serves as a firm's competitive advantage over its rivals. | Core competency |
| Which of the following BEST typifies a strategic asset? | the firm's patents and trademarks |
| What do you call the coordination of the flow of all the information, money, and material that moves through a product's supply chain? | supply chain management |
| Which of the following is NOT a source of risk associated with participating in alliances and partnerships? | cost sharing |
| _____ is the limited group of individuals or businesses that a firm goes after. | Target market |
| T/F It is critical that an entrepreneur follow the standard business model for their industry. | False |
| T/F After development of the business model, the firm needs to conduct its feasibility analysis to ensure that the model is realistic. | False |
| T/F The formation of a new firm can take place to strengthen the value chain for an existing product. | True |
| T/F A complete misread of the customer can render a business model untenable from the beginning. | True |
| T/F A cost leadership strategy requires a business model that is focused on large volume. | True |
| T/F A firm's two most important resources are its core competencies and its strategic assets. | True |
| T/F An example of a clothing firm's customer interface is as follows: 18-22 year olds who are willing to pay full price for trendy merchandise. | False |
| T/F Fulfillment and support describes whether or not a firm provides things like toll-free numbers and Web sites. | False |
| T/F The level of customer support offered like layaway policy, hours of operation, parking-impact a firm's business model. | True |
| T/F An easy way for new ventures to differentiate themselves from competition is via its pricing structure. | False |
| a business model serves as an ongoing extension of a firm's feasibility analysis, and focuses attention on how all the elements of a business fit together. And it also _____ | describes why the network of participants needed to make an idea viable is willing to work together. a company's core logic to employees as well as outside stakeholders. |
| What are the four major components of a business model? | 1. core strategy 2. strategic resources 3. partnership network 4. customer interface |
| What are specific steps an entrepreneurial organization can take to build a strong ethical culture | lead by example, establish a code of conduct. implement an ethics training program. |
| What are ways for entrepreneurs to save on legal fees and to increase the value of their relationship with their attorney | group together legal matters, offer to assist the attorney, invite your attorney to join your advisory board. |
| _____ is a promise made by an employee to not disclose the company's trade secrets. | A nondisclosure agreement |
| What are several steps an entrepreneur can take to avoid legal disputes and complications. | Meet all contractual obligations, Get everything in writing, Set standards that govern employees' behavior. |
| What do you call the process in which an impartial third party helps those involved in a dispute reach an agreement? | Mediation |
| What is an advantage of the sole proprietorship form of organization | Creating one is easy and inexpensive. |
| Which form of business organization can allocate partial ownership interests through the distribution of stock? | Corporation |
| Double taxation means that a corporation is taxed on its net income and | when the same income is distributed to shareholders in the form of dividends, is taxed again on shareholders' personal income tax returns. |
| Which form of organization combines the advantages of a partnership and C corporation; is not subject to double taxation; pays no taxes but rather, passes its income through to the tax returns of its owners; and, has limited liability? | subchapter S corporation |
| What are disadvantages of a limited liability company | setting up and maintaining one is more difficult and expensive, tax accounting can be complicated, regulation and taxation can vary by state |
| T/F Strong ethical cultures emerge naturally for most small businesses | False |
| T/F With the tremendous growth in Web sites that can help entrepreneurs with various legal issues, in most cases it is unnecessary to hire an attorney for a start-up venture. | False |
| T/F With regard to a firm upholding its high ethical standards, it is important to consider the behavior of its potential partners. | True |
| T/F Once a firm chooses a form of organization, it is common to review that to determine whether the current form of business organization continues to be appropriate. | True |
| T/F Most businesses in the United States are sole proprietorships | True |
| T/F Typically, liquidity (ability to quickly convert to cash without loss of value) of an owner's investment in a sole proprietorship is quite high. | False |
| T/F The major difference between a general partner and a limited partner is that general partner is liable for the debts and obligations of the partnership but the limited partners are liable only up to the amount of their investment. | True |
| T/F A corporation generally shields its shareholders from personal liability for the debts and obligations of the corporation. | True |
| T/F Corporations must be listed on either the New York Stock Exchange or the NASDAQ. | False |
| T/F Subchapter S corporations are limited to 100 shareholders who must be U.S. citizens | True |
| The major difference between general partnership and a limited includes are two classes of owners: | general partners and limited partners. |
| The general partners in a partnership are liable for | the debts and obligation of the partnership, |
| The limited partners in a partnership are liable for | only up to the amount of their investment, may not exercise any significant control over the organization. |
| What standards must a firm meet to qualify as a subchapter S corporation? – cannot be a subsidiary of another corporation, no more than 100 shareholders and ____ | shareholders must be U.S. citizens, partnerships and C corporations may not own shares, can only have one class of stock outstanding, all shareholders must agree to have the corporation formed as a subchapter S corporation |
| Which of the following financial objectives best relates to a firm's ability to meet its short-term financial obligations? | Liquidity |
| Which of the following financial objectives best relates to how productively a firm uses its assets relative to its revenues and its profits? | Efficiency |
| _____ is a written report that quantitatively describes a firm's financial health. | A financial statement |
| Which of the following best characterizes pro forma financial statements? | projections of future periods based on forecasts |
| Which balance sheet category would a firm's delivery trucks fit into? | fixed assets |
| The statement of cash flows shows the activities from which a firm obtains and uses cash and includes the | operating activities, investing activities, financing activities. |
| _____ is used to find relationships between variables for the purpose of predicting future values. | Regression analysis |
| In compiling its forecast of costs of sales and the other items on its income statement, for which of the following items would a percent-of-sales method NOT be appropriate? | depreciation expense |
| Which of the following best relates to the break-even analysis calculated by an entrepreneur starting a new venture or producing a new product? | The point where total revenue received equals total costs associated with the output of the new venture or product. |
| Which of the following has as its most important function, the projection of whether the firm will have sufficient cash to meet its needs? | pro forma statement of cash flows |
| T/F A company's accounts payable is money owed to it by its customers. | False |
| T/F Working Capital is defined as its current assets minus current liabilities. | True |
| T/F Publicly traded firms are required by the Internal Revenue Service to prepare financial statements and make them available to the public. | False |
| T/F The income statement reflects a firm's results over a period of time. . | False |
| T/F Owners' equity reflects the equity invested in the business by its owners plus the accumulated earning retained by the business BEFORE any payment of dividends. | False |
| T/F The statement of cash flows summarizes the changes in a firm's cash position for a specified period of time and details why the change occurred. . | True |
| T/F When using the percent-of-sales method to forecast its costs of sales and other items on the income statement, a firm must ensure that it applies the chosen percentage consistently to each income statement item. | False |
| T/F The balance sheet is a snapshot of assets, liabilities, and owners' equity at a point in time . | True |
| T/F The pro forma balance sheet provides a firm a sense of how its activities will affect its ability to meet its short-term liabilities and how its finances will evolve over time. . | True |
| T/F The pro forma income statement shows the projected flow of cash into and out of the company during a specified period | False |
| What are the steps of the process of financial management? | Step 1: Preparation of historic financial statements Step 2: Preparation of forecasts Step 3: Preparation of pro forma financial statements Step 4: Ongoing analysis of financial results |
| the three major activities summarized in a statement of cash flows: | OPERATING ACTIVITIES,: INVESTING ACTIVITIES, FINANCING ACTIVITIES |
| on a statement of cash flow what is Associated with OPERATING ACTIVITIES | net income or loss, depreciation, changes in current assets and liabilities (other than cash and short-term debt) |
| on a statement of cash flow what is Associated with INVESTING ACTIVITIES: | purchase and/or sale of fixed assets |
| on a statement of cash flow what is Associated with FINANCING ACTIVITIES: | cash raised during the period by borrowing, cash raised during the period by selling stock, cash used during the period by paying dividends, or by buying back outstanding stocks and/or bonds |
Created by:
romoore245
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