Entrepreneurship - Successfully Launching New Ventures Answer Key Part 2

38) According to the textbook, the Five Forces model can be used in the following two ways: ________. A) first, to help a firm determine whether it should enter an industry in an aggressive or a conservative manner, and second, to help a firm determine whether to compete in international markets in that industry. B) first, to help a firm determine if it should enter a single or multiple niches in an industry, and second, to help a firm determine whether it can be competitive in that industry C) first, to help a firm determine what industry it is best equipped to compete in, and second, to help a firm determine whether to compete in international markets in that industry D) first, to help a firm determine what niche to enter within an industry, and second, to help a firm determine whether it can be competitive in that industry E) first, to help a firm determine whether it should enter a particular industry, and second, to help a firm discern whether it can carve out an attractive position in that industry Answer: E 39) Brain Sentry is starting a firm in the small industry that helps football teams discern whether a player has suffered a concussion. This industry is still so new that no standard operating procedures have been developed. The industry Brain Sentry is entering is an example of a(n) ________ industry. A) mature B) declining C) emerging D) global E) fragmented Answer: C 40) The primary opportunity existing for startups in emerging industries is to ________. A) consolidate the industry and establish industry leadership as a result of doing so B) win customers by placing an emphasis on service and process innovation C) pursue a niche strategy, which focuses on a narrow segment of the industry that might be encouraged to grow through product or process innovation D) capture a first-mover advantage E) pursue a cost reduction strategy, which is accomplished through achieving lower costs than industry incumbents through process innovation Answer: D 41) A(n) ________ industry is one that is characterized by a large number of firms of approximately equal size. A) fragmented B) mature C) declining D) emerging E) global Answer: A 42) The primary opportunity existing for startups in fragmented industries is to ________. A) pursue a niche strategy, which focuses on a narrow segment of the industry that might be encouraged to grow through product or process innovation B) win customers by placing an emphasis on service and process innovation C) capture a first-mover advantage D) pursue a cost reduction strategy, which is accomplished through achieving lower costs than industry incumbents through process innovation E) consolidate the industry and establish industry leadership as a result of doing so Answer: E 43) A(n) ________ industry is an industry that is experiencing slow or no increase in demand. A) declining B) global C) mature D) emerging E) fragmented Answer: C 44) According to the textbook, Justin's in peanut butter, Pure Fix Cycles in bicycles, and Flings Bins in trash bags are examples of entrepreneurial firms who are exploiting opportunities in ________ industries. A) emerging B) fragmented C) declining D) mature E) consolidated Answer: D 45) According to the textbook, Chipotle Mexican Grill in fast-casual restaurants and 1-800GOT_JUNK? in junk removal are examples of entrepreneurial firms who are exploiting opportunities in ________ industries. A) global B) declining C) mature D) emerging E) fragmented Answer: E 46) According to the textbook, Nucor in steel, JetBlue in airlines, and Cirque du Soleil in circuses are examples of entrepreneurial firms who are exploiting opportunities in ________ industries. A) fragmented B) emerging C) declining D) global E) mature Answer: C 47) Opportunities for leadership, niche, harvest and divestment are associated with ________ industries. A) mature B) emerging C) declining D) fragmented E) global Answer: C 48) A(n) ________ industry is an industry that is experiencing significant international sales. A) global B) mature C) fragmented D) declining E) emerging Answer: A 49) The two most common strategies pursued by firms in global industries are the ________ strategy and the ________ strategy. A) inclusive, multidomestic B) multidomestic, global C) multidomestic, worldwide D) inclusive, global E) home, worldwide Answer: B 50) Firms that pursue a(n) ________ strategy compete for market share on a country-by-country basis and vary their product or service offerings to meet the demands of the local market. A) inclusive B) universal C) multidomestic D) contemporary E) worldwide Answer: C 51) Kellen West recently launched a firm in the fruit drink industry, and has already exported his fruit drinks to 11 different countries. One thing that Kellen's firm is doing is that it is varying the tastes of the fruit drinks it sells on a country-by-country basis to meet the demands of the local markets. Kellen's firm is pursuing a ________ strategy. A) global B) home C) universal D) contemporary E) multidomestic Answer: E 52) Katherine Chapman recently launched a firm in the clothing industry, targeting 13-17 year olds. One thing Katherine thinks she has accomplished is producing products that have universal appeal, so she will not vary her approach from country to country. Katherine is pursuing a ________ strategy. A) universal B) multidomestic C) contemporary D) global E) home Answer: D 53) A fragmented industry is a new industry in which standard operating procedures have yet to be developed. Answer: FALSE 54) An emerging industry is one that is characterized by a large number of firms of approximately equal size. Answer: FALSE 55) The primary opportunity available to firms in fragmented industries is consolidation. The most common way to do this is through a geographic roll-up strategy, in which one firm starts acquiring similar firms that are located in different geographic areas. Answer: TRUE 56) A fragmented industry is an industry that is experiencing slow increases in demand, numerous repeat customers, and limited product innovation. Answer: FALSE 57) Firms that pursue a multidomestic strategy use the same basic approach in all foreign markets. Answer: FALSE 58) What is an emerging industry? What is the primary opportunity available to entrepreneurial firms in emerging industries? Name three examples of firms in emerging industries. Answer: An emerging industry is a new industry in which standard operating procedures have yet to be developed. The firm that pioneers or takes the leadership of an emerging industry often captures a first-mover advantage, which is a sometimes insurmountable advantage gained by the firm initiating the first significant move into a new market. Examples of firms in emerging industries include Apple with its iTunes music store, Brain Sentry in devices that detect concussions, and Buzzy in procedures that help relieve pain when shots are administered. 59) According to the textbook, the first step in a competitor analysis is to ________. A) develop a marketing plan B) develop the strategic plan C) study the strength of the industry D) study the external environment E) determine who the competition is Answer: E 60) According to the textbook, the three different types of competitors a business will face are ________. A) potential, direct, and upcoming B) indirect, fleeting, and future C) serious, cautious, and future D) direct, indirect, and future E) potential, fleeting, and indirect Answer: D 61) In the context of competitor analysis, businesses that offer identical or similar products are referred to as ________ competitors. A) immediate B) direct C) indirect D) straight E) urgent Answer: B 62) Aquafina operates in the bottled water industry. The companies that offer identical or similar products and go after the same customers that Aquafina does are Dasani and Zephyrhills. Dasani and Zephyrhills are Aquafina's ________ competitors. A) direct B) indirect C) future D) impending E) potential Answer: A 63) In the context of competitor analysis, ________ competitors offer close substitutes to the product sold by the firm completing the analysis. A) potential B) direct C) indirect D) impending E) future Answer: C 64) In the beverage industry, soda, fruit juice, and sports drinks are ________ competitors of bottled water. A) occasional B) infrequent C) indirect D) direct E) future Answer: C 65) In the context of competitor analysis, ________ competitors are companies that are not yet direct or indirect competitors but could move into one of these roles at any time. A) stable B) roundabout C) impending D) approximate E) future Answer: E 66) The information that is gathered by a firm to learn about its competitors is referred to as ________. A) a feasibility appraisal B) a workable appraisal C) a practical assessment D) a viable assessment E) competitive intelligence Answer: E 67) The Savvy Entrepreneurial Firm feature in Chapter 5 focuses on three firms that are doing well in crowded industries as ________. A) they have effectively differentiated themselves from their competitors and have captured a first-mover advantage B) they have passionate leaders and run savvy promotional campaigns C) they have captured a first-mover advantage and have unique business models D) they create meaningful value for customers at a fair price and have differentiated themselves from their competitors E) they are low-cost leaders and run savvy promotional campaigns Answer: D 68) Amy has just launched a firm in the sports drink industry. She has decided to complete a grid to see how she stacks up against her competitors. Along the horizontal axis of the grid she lists her firm along with her major competitors. Along the vertical axis of the grid she lists the main competitive factors in her industry. Amy is completing a ________. A) strategic analysis spreadsheet B) tactical analysis framework C) competitive analysis grid D) strategic analysis grid E) behavioral analysis spreadsheet Answer: C 69) The What Went Wrong? feature in Chapter 5 focused on Digg, a Web site that was once one of the hottest sites on the Internet but eventually failed. According to the feature, through a series of missteps Digg ________. A) failed to conduct sufficient competitor analysis B) succumb to the bargaining power of suppliers C) lost its way and its place in its industry D) was unable to erect sufficient barriers to entry E) succumb to the bargaining power of buyers Answer: C 70) The first step in a competitor analysis is to determine who the competition is. Answer: TRUE 71) A firm's future competitors are its most important ones. Answer: FALSE 72) The three types of competitors a business will face are direct competitors, indirect competitors, and future competitors. Answer: TRUE 73) The information that is gathered by a firm to learn about its competitors is referred to as tactical intelligence. Answer: FALSE 74) A competitive analysis grid is a tool for organizing the information a firm collects about its competitors. Answer: TRUE 75) What is competitive intelligence? What are some of the ways that a firm can ethically obtain information about its competitors? Answer: The information that is gathered by a firm to learn about its competitors is referred to as competitive intelligence. There are a number of ways that a firm can ethically obtain information about its competitors. These ways include: attend conferences and trade shows, read industry-related books, magazines, and Web sites, along with general business magazines, talk to potential customers about what motivated them to buy your product as opposed to your competitor, purchase competitors' products to understand their features, benefits, and shortcomings, study competitors' Web sites, and study Web sites that provide information about competitors.