| 
40. | 
According
  to the text, for an entrepreneurial start-up to be successful, three
  ingredients are critical. What are they?  
 
 
 
 
Beyond merely identifying a
  venture concept, the opportunity recognition process also involves organizing
  the key people and resources that are needed to go forward. The three factors
  that are needed, therefore, to successfully proceed are opportunity,
  resources, and entrepreneur(s). | 
| 
AACSB:
  Analytic Blooms: Understand Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 2 Medium Topic: Recognizing Entrepreneurial Opportunities | 
| 
41. | 
Which
  of the following is not a common source of new business opportunities?  
 
 
 
 
For new business start-ups,
  opportunities come from many sources including current or past work
  experiences, hobbies that grow into businesses or lead to inventions,
  suggestions by friends or family, or a chance event that makes an
  entrepreneur aware of an unmet need. | 
| 
AACSB:
  Analytic Blooms: Understand Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 2 Medium Topic: Recognizing Entrepreneurial Opportunities | 
| 
42. | 
The
  process of identifying, selecting, and developing new venture opportunities
  is known as _____________.  
 
 
 
 
To determine which ideas are
  strong enough to become new ventures, entrepreneurs must go through a process
  of identifying, selecting, and developing potential opportunities. This is
  the process of opportunity recognition. | 
| 
AACSB: Analytic Blooms: Understand Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 2 Medium Topic: Recognizing Entrepreneurial Opportunities | 
| 
43. | 
Generally
  speaking, the opportunity recognition process consists of two phases of
  activity. They are ______________ and _____________.  
 
 
 
 
Opportunity recognition
  refers to more than just the Eureka feeling that people sometimes experience
  at the moment they identify a new idea. Although such insights are often very
  important, the opportunity recognition process involves two phases of
  activity (discovery and evaluation), which lead to viable new venture
  opportunities. | 
| 
AACSB:
  Analytic Blooms: Understand Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 2 Medium Topic: Recognizing Entrepreneurial Opportunities | 
| 
44. | 
Which
  of the following is NOT one of the characteristics of an entrepreneurial
  opportunity?  
 
 
 
 
For an opportunity to be
  viable, it needs to have four qualities: attractive, achievable, durable, and
  value creating. | 
| 
AACSB:
  Analytic Blooms: Understand Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 2 Medium Topic: Recognizing Entrepreneurial Opportunities | 
| 
45. | 
When
  an opportunity is attractive long enough for it to be successfully developed
  and deployed, it is said to be _____________.  
 
 
 
 
For an opportunity to be
  viable, it needs to have four qualities, one of which is durable. This means
  the opportunity must be attractive long enough for the development and
  deployment to be successful; that is, the window of opportunity must be open
  long enough for it to be worthwhile. | 
| 
AACSB:
  Analytic Blooms: Understand Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 2 Medium Topic: Recognizing Entrepreneurial Opportunities | 
| 
46. | 
Which
  of the following terms is used to refer to opportunities that are practical
  and physically possible?  
 
 
 
 
For an opportunity to be
  viable, it needs to have four qualities, one of which is achievable. This
  means the opportunity must be practical and physically possible. | 
| 
AACSB:
  Analytic Blooms: Understand Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 2 Medium Topic: Recognizing Entrepreneurial Opportunities | 
| 
47. | 
Which
  of the following is not a primary source of financing for entrepreneurial
  start-ups?  
 
 
 
 
The majority of new firms are
  low-budget start-ups launched with personal savings and the contributions of
  family and friends. Angel investors, private individuals who provide equity
  investments for seed capital during the early stages of a new venture, favor
  companies that already have a winning business model and dominance in a
  market niche. | 
| 
AACSB: Analytic Blooms: Understand Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 2 Medium Topic: Recognizing Entrepreneurial Opportunities | 
| 
48. | 
According
  to a study by the Kaufmann Foundation, which of the following is the largest
  source of funding for businesses that have been operating at least five
  years?  
 
 
 
 
According to the Kauffman
  Foundation study, after five years of operation, the largest source of
  funding is from loans taken out by the business. | 
| 
AACSB:
  Analytic Blooms: Understand Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 2 Medium Topic: Recognizing Entrepreneurial Opportunities | 
| 
49. | 
The
  majority of entrepreneurial start-ups are financed through monies from _____________.  
 
 
 
 
The majority of new firms are
  low-budget start-ups launched with personal savings and the contributions of
  family and friends. | 
| 
AACSB:
  Analytic Blooms: Understand Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 2 Medium Topic: Recognizing Entrepreneurial Opportunities | 
| 
50. | 
Private
  individuals who provide seed capital to young ventures are known as
  _____________.  
 
 
 
 
Angel investors, private
  individuals who provide equity investments for seed capital during the early
  stages of a new venture, favor companies that already have a winning business
  model and dominance in a market niche. | 
| 
AACSB:
  Analytic Blooms: Remember Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 1 Easy Topic: Recognizing Entrepreneurial Opportunities | 
| 
51. | 
Which
  of the following statements about venture capital is not true?  
 
 
 
 
Start-ups that involve large
  capital investments or extensive development costs may seek venture capital,
  a form of private equity financing through which entrepreneurs raise money by
  selling shares in the new venture. Venture capitalists nearly always have
  high performance expectations from the companies they invest in, but they
  also provide important managerial advice and links to key contacts in an
  industry. | 
| 
AACSB:
  Analytic Blooms: Understand Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 2 Medium Topic: Recognizing Entrepreneurial Opportunities | 
| 
52. | 
Based
  on statistics reported in the text, which of the following statements is not
  true?  
 
 
 
 
Among firms included in the Entrepreneur
  Magazine list of the 100 fastest-growing new businesses in a recent year, 61
  percent reported that their start-up funds came from personal savings. When
  firms receive venture-capital investments, they receive a substantial level
  of investment, over $1 million on average in the Kaufmann Foundation survey. | 
| 
AACSB:
  Analytic Blooms: Understand Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 2 Medium Topic: Recognizing Entrepreneurial Opportunities | 
| 
53. | 
According
  to the text, new ventures launched by entrepreneurial teams are more likely
  to be successful than ventures launched by _____________.  
 
 
 
 
Managers need to have a
  strong base of experience, extensive domain knowledge, and an ability to make
  rapid decisions and change direction as needed. In the case of start-ups,
  more is better. New ventures that are started by teams of three, four, or
  five entrepreneurs are more likely to succeed in the long run than are
  ventures launched by lone wolf entrepreneurs. | 
| 
AACSB:
  Analytic Blooms: Understand Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 2 Medium Topic: Recognizing Entrepreneurial Opportunities | 
| 
54. | 
Which
  of the following is the most important resource for a start-up
  activity?  
 
 
 
 
Resources are an essential
  component of a successful entrepreneurial launch. For start-ups, the most
  important resource is usually money because a new firm typically has to
  expend substantial sums just to start the business. However, financial
  resources are not the only kind of resource a new venture needs. Human
  capital and social capital are also important. | 
| 
AACSB:
  Analytic Blooms: Understand Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 2 Medium Topic: Recognizing Entrepreneurial Opportunities | 
| 
55. | 
______________
  provide(s) a key avenue for growth for many young and small firms through
  partnering to obtain resources and/or expand into new markets.  
 
 
 
 
Strategic alliances provide a
  key avenue for growth by entrepreneurial firms. By partnering with other
  companies, young or small firms can expand or give the appearance of entering
  numerous markets and/or handling a range of operations. | 
| 
AACSB:
  Analytic Blooms: Understand Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 2 Medium Topic: Recognizing Entrepreneurial Opportunities | 
| 
56. | 
The
  U.S. Small Business Administration supports small business through all of the
  following EXCEPT  
 
 
 
 
In the U.S., the federal
  government provides support for entrepreneurial firms in two key arenas,
  financing and government contracting. The Small Business Administration (SBA)
  has several loan guarantee programs designed to support the growth and
  development of entrepreneurial firms. The government itself does not
  typically lend money but underwrites loans made by banks to small businesses.
  The SBA also offers training, counseling, and support services through its
  local offices and Small Business Development Centers. | 
| 
AACSB:
  Analytic Blooms: Understand Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 2 Medium Topic: Recognizing Entrepreneurial Opportunities | 
| 
57. | 
Which
  of the following is NOT one of the three characteristics of entrepreneurial
  leadership mentioned by the text?  
 
 
 
 
Entrepreneurs put themselves
  to the test and get their satisfaction from acting independently, overcoming
  obstacles, and thriving financially. To do so, they must embody three characteristics
  of leadership: vision, dedication and drive, and commitment to excellence. | 
| 
AACSB:
  Analytic Blooms: Understand Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 2 Medium Topic: Recognizing Entrepreneurial Opportunities | 
| 
58. | 
Vision
  is an important element of entrepreneurial leadership because
  _____________.  
 
 
 
 
Vision may be the most
  important asset of an entrepreneur. Entrepreneurs envision realities that do
  not yet exist. Without a vision, most entrepreneurs would never even get
  their venture off the ground. | 
| 
AACSB:
  Analytic Blooms: Understand Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures. Level of Difficulty: 2 Medium Topic: Recognizing Entrepreneurial Opportunities | 
| 
59. | 
Which
  of the following is NOT a common new entry strategy according to the
  text?  
 
 
 
 
For a new venture, the entry
  strategy will vary depending on how risky and innovative the new business
  concept is. New entry strategies typically fall into one of three categories:
  pioneering new entry, imitative new entry, or adaptive new entry. | 
| 
AACSB:
  Analytic Blooms: Understand Learning Objective: 08-02 Three types of entry strategies-pioneering; imitative; and adaptive-commonly used to launch a new venture. Level of Difficulty: 2 Medium Topic: Entrepreneurial Strategy | 
| 
60. | 
Seeking
  products or services that have been successful in one market and introducing
  the same basic product or service in another segment of the market is
  referred to as _____________.  
 
 
 
 
Imitators look for
  opportunities to capitalize on proven market successes. An imitative new
  entry strategy is used by entrepreneurs who see products or business concepts
  that have been successful in one market niche or physical locale and
  introduce the same basic product or service in another segment of the market. | 
| 
AACSB:
  Analytic Blooms: Understand Learning Objective: 08-02 Three types of entry strategies-pioneering; imitative; and adaptive-commonly used to launch a new venture. Level of Difficulty: 2 Medium Topic: Entrepreneurial Strategy | 
 
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