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Launching New Ventures, 3/e
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Book Title: Entrepreneurship: Successfully
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Location on Chapter 5 > Chapter Quiz More information about scoring
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Date/Time August 11, 2020 at 6:53 PM
Submitted: (UTC/GMT)

1. When studying an industry, the following are key questions an

entrepreneur must answer before pursuing the idea of starting a firm
EXCEPT:

Does the industry contain markets that are ripe for

Your Answer: innovation or are underserved?
Correct Answer: Is the industry in the maturity stage of the industry
life cycle?

p. 170
 

2. How a company is situated relative to its competitors is referred to as

_____ .

position
Your Answer:

3. Which of the following is a framework for understanding the structure of

an industry?

the consumer product classification matrix

Your Answer:
Correct Answer: the five competitive forces model

  p. 174
4. 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 new entrants

Your Answer:
Correct Answer: threat of substitutes

  p. 175

5. Which of the following barriers to entry into an industry would be most

relevant for a firm considering the airline industry?

access to distribution channels

Your Answer:
Correct Answer: capital requirements

  p. 176

6. What's the biggest threat to a new firm's viability when creating a new
market?

government determination that the firm is a monopoly

Your Answer:
Correct Answer: larger, better-funded firms copying them

  p. 177

7. Which industry type is characterized by a large number of firms of

approximately equal size?

(blank)
Your Answer:

8. The following are strategies entrepreneurial firms can employ in declining

industries EXCEPT:
 a cost reduction strategy.
Your Answer:
Correct Answer: an early adoption strategy.

p. 184
 

9. 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?

a future competitor
Your Answer:
Correct Answer: an indirect competitor

  p. 186

10 What phrase best describes the information gathered by a firm to learn

about its competitors?
.
marketing research
Your Answer:
Correct Answer: competitive intelligence

  p. 187

11 Most studies have shown that industry-specific factors do NOT contribute

to a firm's profitability.
.
False
Your Answer:

12 Economies of scale occur when mass-producing a product results in lower

average costs.
.
True
Your Answer:
13 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.
.
(blank)
Your Answer:

14 In most industries, the major determinant of industry profitability is the

level of competition among the firms already in the industry.
.
False
Your Answer:
Correct Answer: True

p. 177
 

15 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
Your Answer:

16 An example of backward integration is a supplier deciding to enter a

buyer's industry.
.
False
Your Answer:

17 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.

True
Your Answer:
Correct Answer: False
  p. 184

18 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
Your Answer:

19 In entering a global industry, it would make sense for a food company to

pursue a global strategy rather than a multidomestic one.
.
False
Your Answer:

20 Small firms in an industry often find ways to cooperate in an effort to

remain competitive given the presence of larger rivals.
.
True
Your Answer:

21 What is Michael Porter's five competitive forces model?

.
Your Answer:
(blank)

22 What is competitive analysis and how do you obtain it?

.
Your Answer:
(blank)

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for:
"Chapter
Quiz"
 Site Title: Entrepreneurship: Successfully Summary of Results
Launching New Ventures, 3/e
20% Correct of 20 Scored items:
Book Title: Entrepreneurship: Successfully
4 Correct:  20%
Launching New Ventures, 3/e
16 Incorrect:  80%
Book Barringer
Author:
2 questions not scored. 20 scored questions.
Location on Chapter 10 > Chapter Quiz More information about scoring
Site:
Date/Time August 11, 2020 at 6:57 PM
Submitted: (UTC/GMT)

1. Most new ventures need to raise money during their early life for the
following reasons EXCEPT:

cash flow challenges.

Your Answer:
Correct Answer: to pay dividends.

  p. 341

2. _____ is the rate at which a company is spending its capital until it

reaches profitability.

Capitalization rate
Your Answer:
Correct Answer: Burn rate

  p. 341

3. Which of the following is the least likely source of seed money that gets a
new venture started?

personal funds
Your Answer:
Correct Answer: a bank line of credit

  p. 342
4. _____ is a brief, carefully constructed statement that outlines the merits
of a business opportunity.

An executive summary
Your Answer:
Correct Answer: An elevator speech

  p. 346

5. Which of the following is NOT a common source of equity funding?

venture capital
Your Answer:
Correct Answer: banks

  p. 346

6. Entrepreneurs take their firms public for the following reasons EXCEPT:

to raise a firm's public profile.

Your Answer:
Correct Answer: to broaden their ownership interest.

  p. 353

7. Which of the following is NOT a common source of debt financing for a new
venture?

lines of credit
Your Answer:
Correct Answer: corporate bonds

  p. 354

8. The following are reasons that commercial banks have not been viewed as
practical sources of financing for new ventures EXCEPT:
 unlike venture capitalists who look for ventures that will
Your Answer: reliably repay their loans, banks are looking for businesses
that are "home runs".

9. As financing and funding are difficult for new ventures, the following are
creative ways that start-ups can use to obtain financial resources EXCEPT:

strategic partners.
Your Answer:
Correct Answer: an initial public offering.

  p. 358

10 Assume Dell provides some financial support to a small start-up firm that
produces a key component used in their computers. This arrangement
. would best be characterized as:

a merger.
Your Answer:
Correct Answer: a strategic partnership.

  p. 361

11 Typically, the seed money that gets a company off the ground comes from
the founders' own pockets.
.
False
Your Answer:
Correct Answer: True

  p. 342

12 Sweat equity relates to funding a new venture through the acquisition of

gifts, free rent, and grants.
.
False
Your Answer:
13 Equity funding involves repayment.
.
True
Your Answer:
Correct Answer: False

  p.346

14 The primary disadvantage of equity funding is that the firm's owners

relinquish part of their ownership interest and may lose some control.
.
True
Your Answer:

15 In terms of funding new firms, venture capitalists are far more prevalent
than business angels.
.
True
Your Answer:
Correct Answer: False

  p. 352

16 Raising capital by "going public" means to commercialize, or make your

products available to the public, for the first time.
.
True
Your Answer:
Correct Answer: False

  p. 353

17 An alternative to an initial public offering is a private placement, which is

an issue of securities to a large institutional investor.
.
(blank)
Your Answer:
18 Both interest payments to lenders, and dividend payments to
stockholders, are tax deductible.
.
True
Your Answer:
Correct Answer: False

  p. 354

19 One source of financing for new ventures is to borrow money directly from
the Small Business Administration (SBA).
.
False
Your Answer:

20 An alternative to debt or equity financing that enables a company to

acquire the use of equipment is leasing.
.
False
Your Answer:
Correct Answer: True

  p. 358