Exam 3: Starting a Small Business

Fads can lead to serious, though sometimes short-lived, money-making opportunities, but trends provide a much stronger foundation for businesses because they are connected to a larger change in society.

Using a cost-based strategy, a company would take steps to increase efficiency and hold down costs.

The business idea screening process takes which of the following merits of an idea into account?

When Sally realized her vintage clothing pieces were being bought by the local college students and not just their parents, she started adding more vintage pieces to her inventory. Sally is

Because many commuters grab a cup of coffee and drink it during their ride to work, someone invented specially shaped cups that don't tip and lids with sip openings that close and don't spill. Which of the following innovative ways of thinking best fits this situation?

Economist Israel Kirzner proposed that entrepreneurs have a unique capability, which he called _____, to recognize existing opportunities for businesses.

Jesse would like to start a landscaping company that concentrates on using native plants. The feasibility analysis showed a need for $100,000 to start the company (she has $10,000), competition of three other companies (one concentrated on using native plants), and buyers who were predominantly 60 years or older (who loved yard work). Which of the following statements is true?

Match the term with its definition. -The environment that focuses on the strength, position, and likely moves and countermoves of competitors in an industry

Mike and Jane opened a franchise sporting goods store. Neither was athletic; neither had ever managed a retail store; and the business failed within one year. Which of the following statements best explains these results?

As the success of the athletic teams at O-MY-U skyrocketed, so did attendance at the games. Out-of-town visitors found all the hotels fully booked. In response, Bob and Shirley opened their home to guests on weekends, operating as a bed and breakfast. Soon many of their neighbors did the same, and Bob and Shirley found they could no longer fill all their rooms every game weekend. How would Michael Porter explain this?

The best business ideas will meet a definite market need and have no fatal flaws.

Peggy would like to open a dog grooming business in her home. Which of the following, if true, would indicate this is a good idea?

Match the term with its definition. -The environment that includes factors that directly impact a given firm and all of its competitors

Match the term with its definition. -Startup ideas involving new or relatively new technology, centered around providing customers with a new product or service

Farmers who wish to sell grain cannot negotiate a price; they either accept the price offered or decline to sell their crop. This is an example of

Match the term with its definition. -A plan of action that coordinates the resources and commitments of an organization to achieve superior performance

Intellectual property rights are an example of a(n)