Question 1

An acquisition is the pooling of interests to combine two or more firms into one. A merger is the outright purchase of one firm by another.

Accepted Answer

A) True 
 B)False

Question 2

________ growth strategies rely on establishing relationships with third parties, such as mergers, acquisitions, strategic alliances, joint ventures, licensing, and franchising.

Accepted Answer

A)  Internal 
B)  Domestic 
C)  Outside 
D)  External 
E)  Peripheral 
A)  Internal 
B)  Domestic 
C)  Outside 
D)  External 
E)  Peripheral

Question 3

New product development is a low-risk growth strategy.

Accepted Answer

A) True 
 B)False

Question 4

In regard to acquisitions, many firms have found that the process of assimilating another company into their current operations is relatively easy and is not disruptive to the current operations of their firm.

Accepted Answer

A) True 
 B)False

Question 5

Two years ago, Cameron Jones and Mary Scott each owned a small chain of smoothie restaurants in New York City. Just recently, they decided to pool their interests and combine their individual chains of restaurants into one chain. What Cameron and Mary did with their firms is called a(n) ________.

Accepted Answer

A)  licensing agreement 
B)  strategic alliance 
C)  acquisition 
D)  joint venture 
E)  merger 
A)  licensing agreement 
B)  strategic alliance 
C)  acquisition 
D)  joint venture 
E)  merger

Question 6

In an acquisition, the surviving firm is called the acquirer, and the firm that is acquired is called the target.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following was identified in the textbook as a disadvantage of participating in strategic alliances and joint ventures?

Accepted Answer

A)  Risk and cost sharing 
B)  Economies of scale 
C)  Partial loss of decision autonomy 
D)  Gain access to a foreign market 
E)  Neutralizing or blocking competitors 
A)  Risk and cost sharing 
B)  Economies of scale 
C)  Partial loss of decision autonomy 
D)  Gain access to a foreign market 
E)  Neutralizing or blocking competitors

Question 8

In a scale joint venture, the position of the parties is not symmetrical, and the objectives of the partners may diverge.

Accepted Answer

A) True 
 B)False

Question 9

A market penetration strategy involves actions taken to increase the sales of a product or service through greater marketing efforts or through increased product capacity and efficiency.

Accepted Answer

A) True 
 B)False

Question 10

A ________ is a partnership between two or more firms that is developed to achieve a specific goal and has no joint ownership involved.

Accepted Answer

A)  joint alliance 
B)  joint venture 
C)  licensing agreement 
D)  merger 
E)  strategic alliance 
A)  joint alliance 
B)  joint venture 
C)  licensing agreement 
D)  merger 
E)  strategic alliance

Question 11

The What Went Wrong feature in Chapter 14 focuses on the failure of Crumbs Bake Shop, a specialty-restaurant chain that sold gourmet cupcakes. According to the feature, Crumbs failed due to ________.

Accepted Answer

A)  lack of funding to facilitate expansion, high real estate costs, management turnover, poor operating margins 
B)  no pivot or change in strategy, lack of international expansion, trademark dispute with a competitor, failure to franchise 
C)  increasingly crowded market, consumers started losing interest in cupcakes, high real estate costs, and no pivot or change in strategy 
D)  lack of funding to facilitate expansion, management turnover, increasingly crowded market, and high fixed costs 
E)  high operating costs, trademark dispute with a competitor, consumers started losing interest in cupcakes, and failure to franchise 
A)  lack of funding to facilitate expansion, high real estate costs, management turnover, poor operating margins 
B)  no pivot or change in strategy, lack of international expansion, trademark dispute with a competitor, failure to franchise 
C)  increasingly crowded market, consumers started losing interest in cupcakes, high real estate costs, and no pivot or change in strategy 
D)  lack of funding to facilitate expansion, management turnover, increasingly crowded market, and high fixed costs 
E)  high operating costs, trademark dispute with a competitor, consumers started losing interest in cupcakes, and failure to franchise

Question 12

Describe the internal growth strategy of new product development. Why is it a competitive necessity in some industries that entrepreneurial firms focus on this form of growth?

Accepted Answer

New product development involves the cre

Question 13

Which of the following is a disadvantage of growth by means of external growth strategies?

Accepted Answer

A)  Diversification of business risk 
B)  Economies of scale 
C)  Getting access to proprietary products or services 
D)  Reducing competition 
E)  Loss of organizational flexibility 
A)  Diversification of business risk 
B)  Economies of scale 
C)  Getting access to proprietary products or services 
D)  Reducing competition 
E)  Loss of organizational flexibility

Question 14

Modcloth, Zappos and Sir Kensington's are examples of firms that are growing via ________ growth strategies.

Accepted Answer

A)  in-house 
B)  external 
C)  internal 
D)  central 
E)  derivative 
A)  in-house 
B)  external 
C)  internal 
D)  central 
E)  derivative

Question 15

Describe what a joint venture is. Identify the two types of joint ventures.

Accepted Answer

A joint venture is an entity created whe

An acquisition is the pooling of interests to combine two or more firms into one. A merger is the outright purchase of one firm by another.

________ growth strategies rely on establishing relationships with third parties, such as mergers, acquisitions, strategic alliances, joint ventures, licensing, and franchising.

New product development is a low-risk growth strategy.

In regard to acquisitions, many firms have found that the process of assimilating another company into their current operations is relatively easy and is not disruptive to the current operations of their firm.

Two years ago, Cameron Jones and Mary Scott each owned a small chain of smoothie restaurants in New York City. Just recently, they decided to pool their interests and combine their individual chains of restaurants into one chain. What Cameron and Mary did with their firms is called a(n) ________.

In an acquisition, the surviving firm is called the acquirer, and the firm that is acquired is called the target.

Which of the following was identified in the textbook as a disadvantage of participating in strategic alliances and joint ventures?

In a scale joint venture, the position of the parties is not symmetrical, and the objectives of the partners may diverge.

A market penetration strategy involves actions taken to increase the sales of a product or service through greater marketing efforts or through increased product capacity and efficiency.

A ________ is a partnership between two or more firms that is developed to achieve a specific goal and has no joint ownership involved.

The What Went Wrong feature in Chapter 14 focuses on the failure of Crumbs Bake Shop, a specialty-restaurant chain that sold gourmet cupcakes. According to the feature, Crumbs failed due to ________.

Describe the internal growth strategy of new product development. Why is it a competitive necessity in some industries that entrepreneurial firms focus on this form of growth?

Which of the following is a disadvantage of growth by means of external growth strategies?

Modcloth, Zappos and Sir Kensington's are examples of firms that are growing via ________ growth strategies.

Describe what a joint venture is. Identify the two types of joint ventures.

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Developing an Effective Business Model

Industry and Competitor Analysis

Writing a Business Plan

Preparing the Proper Ethical and Legal Foundation

Assessing a New Venture's Financial Strength and Viability

Building a New-Venture Team

Getting Financing or Funding

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Franchising

Filters

Exam 14: Strategies for Firm Growth

An acquisition is the pooling of interests to combine two or more firms into one. A merger is the outright purchase of one firm by another.

________ growth strategies rely on establishing relationships with third parties, such as mergers, acquisitions, strategic alliances, joint ventures, licensing, and franchising.

New product development is a low-risk growth strategy.

In regard to acquisitions, many firms have found that the process of assimilating another company into their current operations is relatively easy and is not disruptive to the current operations of their firm.

Two years ago, Cameron Jones and Mary Scott each owned a small chain of smoothie restaurants in New York City. Just recently, they decided to pool their interests and combine their individual chains of restaurants into one chain. What Cameron and Mary did with their firms is called a(n) ________.

In an acquisition, the surviving firm is called the acquirer, and the firm that is acquired is called the target.

Which of the following was identified in the textbook as a disadvantage of participating in strategic alliances and joint ventures?

In a scale joint venture, the position of the parties is not symmetrical, and the objectives of the partners may diverge.

A market penetration strategy involves actions taken to increase the sales of a product or service through greater marketing efforts or through increased product capacity and efficiency.

A ________ is a partnership between two or more firms that is developed to achieve a specific goal and has no joint ownership involved.

The What Went Wrong feature in Chapter 14 focuses on the failure of Crumbs Bake Shop, a specialty-restaurant chain that sold gourmet cupcakes. According to the feature, Crumbs failed due to ________.

Describe the internal growth strategy of new product development. Why is it a competitive necessity in some industries that entrepreneurial firms focus on this form of growth?

Which of the following is a disadvantage of growth by means of external growth strategies?

Modcloth, Zappos and Sir Kensington's are examples of firms that are growing via ________ growth strategies.

Describe what a joint venture is. Identify the two types of joint ventures.

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Developing an Effective Business Model

Industry and Competitor Analysis

Writing a Business Plan

Preparing the Proper Ethical and Legal Foundation

Assessing a New Venture's Financial Strength and Viability

Building a New-Venture Team

Getting Financing or Funding

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Franchising

Filters