Chapter 3: Starting a Small Business

Question 1

The identification of potential new products or services that may lead to promising businesses is known as

Answer 1

Opportunity recognition

Question 2

The readiness to act on existing, but unnoticed business opportunities is known as

Answer 2

Entrepreneurial Alertness

Question 3

New business ventures created from scratch are called

Answer 3

Startups

Question 4

Entrepreneurs craving the challenge of succeeding or failing on their own is known as

Answer 4

Startup Fever

Question 5

What are the three basic types of start up ideas?

Answer 5

New Market Ideas
New Technology Ideas
New Benefit Ideas

Question 6

These are centered around providing customers with an existing product or service not available in their market

Answer 6

New Market Ideas

Question 7

These involve new or relatively new technology and are centered around providing customers with a new product

Answer 7

New Technology Ideas

Question 8

Why are new technology ideas considered high risk?

Answer 8

There is not a definite model of success to follow

Question 9

These are based on offering customers benefits from new and improved products or better ways of performing old functions

Answer 9

New Benefit Ideas

Question 10

Fundamentally refocusing the startup as it unfolds or completely recreating it if the initial concept turns out to be seriously flawed is known as a

Answer 10

Pivot

Question 11

What are three possible sources of startup ideas?

Answer 11

Personal Work Experience
Hobbies and Personal Interest
Accidental Discovery

Question 12

A facility for making desirable discoveries by accident is known as

Answer 12

Serendipity

Question 13

Combining two business to create a market opening can do what

Answer 13

Lead to unique products, services, or experiences

Question 14

The broad environment encompassing factors that influence most businesses in a society

Answer 14

The General Environment

Question 15

The general environment studies what important trends

Answer 15

Economic
Sociocultural
Politicolegal
Global
Technological
Demographic

Question 16

The context for factors that directly impact a given firm and all of its competitors

Answer 16

The Industry Environment

Question 17

This focuses on the strength, position, and likely moves and countermoves of competitors in an industry

Answer 17

The Competitive Environment

Question 18

What does evaluating the competitive environment help the entrepreneur to do?

Answer 18

Evaluate the nature and extent of existing competition and to fine-tune future plans

Question 19

Inputs that an entrepreneur can use to start and conduct a business are known as

Answer 19

Resources

Question 20

These resources are visible and easy to measure

Answer 20

Tangible Resources

Question 21

These resources are invisible and difficult to assess

Answer 21

Intangible resources

Question 22

A company’s routines and processes that coordinate the combined use of these productive assets to achieve desired outcomes are called

Answer 22

Capabilities

Question 23

The crucial capabilities that distinguish a company competitively and reflect its general focus and personality is a company’s

Answer 23

Core compentencies

Question 24

This gives a startup or small business the upper hand by allowing it to provide products or services that customer will choose over available opportunities is called a

Answer 24

Competitive Advantage

Question 25

A benefit that exists when a firm has a product or service that is seen by its target market as better than those of competitors

Answer 25

Competitive Advantage

Question 26

This provides a snapshot view of current conditions outside and inside of the company

Answer 26

SWOT Analysis

Question 27

A SWOT analysis shows these

Answer 27

Strengths Weaknesses Opportunities Threats

Question 28

What does a SWOT analysis identify?

Answer 28

Potential business opportunities that match the entrepreneur and his or her planner venture

Question 29

A set of actions that coordinates the resources and commitments of a business to boost its performance

Answer 29

Strategy

Question 30

A plan of action that coordinates the resources and commitment of an organization to achieve superior performance

Answer 30

Strategy

Question 31

The strategy that believes that a firm must hold down it's costs so that it can compete by charging lower prices for its products or services and still make a profit

Answer 31

Cost-Based Strategy

Question 32

What is a possible side effect of the Cost-Based Strategy?

Answer 32

Could spark a price war

Question 33

This strategy emphasizes the uniqueness of a firm's product or service

Answer 33

Differentiation Based Strategy

Question 34

A plan of action that isolates an enterprise from competitors and other market forces by targeting a restricted market segment

Answer 34

Focus Strategies

Question 35

A strategic approach in which entrepreneurs try to shield themselves from market forces by targeting a specific group of customers who have an identifiable but very narrow range of product or service interests

Answer 35

Focus Strategies

Question 36

Focus strategies are also known as

Answer 36

Market Niche

Question 37

A segmented market can erode any of these ways

Answer 37

Focus strategy is limited Target segment becomes structurally unnattractive Target segment loses its uniqueness New firms subsegment the industry

Question 38

What is a common problem with coming up with a business idea

Answer 38

Coming up with too many ideas

Question 39

This should be completed to determine whether the idea you have selected is viable and merits the investment of time and money

Answer 39

An in-depth Feasibility Analysis

Question 40

The quality of the final evaluation will only be as good as

Answer 40

The information used to generate it

Question 41

The merits of an idea are relative to

Answer 41

``` The strength of the business idea Targeted market and customers Industry and competitive advantage Capability of founders Capital requirements and venture performance ```

Question 42

A preliminary assessment of a business idea that gauges whether or not the venture envisioned is likely to succeed

Answer 42

Feasibility analysis

Question 43

A circumstance or development that, in and of itself, could render a new business unsuccessful

Answer 43

Fatal flaw

Question 44

success in entrepreneurship is generally the result of these three elements coming together to launch and maintain success

Answer 44

A market with potential An attractive industry A capable individual or team with the skill and capabilities to pull it all together

Question 45

Two levels of the market

Answer 45

Macromarket | Micromarket

Question 46

This is broad, with a limited attractiveness of the niche if the fundamental features are not promising

Answer 46

Macromarkets

Question 47

This establishes the boundaries for the research you will need to conduct regarding the number of customers targeted and their overall purchasing power

Answer 47

Macromarket analysis

Question 48

Fragments or niches of markets that can be identified within the broader market

Answer 48

Micromarkets

Question 49

Assesses the overall attractiveness of the industry

Answer 49

Macro-level analysis

Question 50

Focused more on the probability of a startup's success in the long run

Answer 50

Micro-level analysis

Question 51

A new business will only be as strong as it's

Answer 51

leader

Question 52

The 3 dimensions of capability

Answer 52

The fit of the venture with its leader's mission, aspirations, and level of comfort with risk involved The leader's grasp of factors that are critical to the success of the enterprise and his/her ability to execute on these The leader's connection to suppliers, customers, investors, and others who will be essential to making the venture work