Deck 9: Strategies for Entrepreneurship and Innovation

Question 1

Entrepreneurship involves all but ONE of the following.

A) Competitive stability
B) Opportunity recognition
C) Opportunity creation
D) Assembling resources
E) Managing activities to start-up the firm

Answer 1

Competitive stability

Question 2

A business plan _____.

A) contains the details of how a new venture will be carried out
B) is focused on forward looking income statements
C) is focused on risk analysis
D) is not critical to an entrepreneur
E) should be extensive with a minimum of 50 pages to be useful

Answer 2

contains the details of how a new venture will be carried out

Question 3

The most difficult problem facing a potential entrepreneur is _____.

A) finding the correct partner
B) obtaining startup capital
C) developing market knowledge
D) developing an appropriate market program
E) ensuring accurate delivery of the firm's output

Answer 3

obtaining startup capital

Question 4

Colonel Sanders started KFC with _____.

A) money from a venture capitalist
B) investments from business angels
C) loans from banks
D) corporate partners
E) money from his social security check

Question 5

The annual return expected by a venture capitalist on early stage seed investments is _____.

A) 20%
B) 40%
C) 60%
D) 80%
E) 100%

Question 6

Business angels are _____.

A) individuals who rescue a troubled entrepreneurial firms
B) individuals who volunteer time to help startup entrepreneurs
C) individuals who are lucky enough to establish a business that reaches an IPO
D) high net worth individuals who invest in new startup businesses
E) high net worth individuals who can identify cutting edge trends in business

Question 7

A letter of an intent drafted in an IPO _____.

A) informs the government that the firm intends to pursue an IPO
B) outlines the financial relationship between the company and the underwriter and other conditions of the offering
C) informs shareholders who are not on the board of the firm's intent to pursue an IPO
D) informs key stakeholders of the intent to pursue an IPO
E) informs investment banks of the intent to pursue an IPO so they can bid for the job

Question 8

The most difficult time for an entrepreneurial startup is the _____.

A) early stages
B) middle stages
C) late stages
D) at the IPO
E) after receiving venture capital financing

Question 9

The most difficult problems facing entrepreneurial startups are _____.

A) partnership problems
B) management problems
C) employee training problems
D) timely delivery problems
E) financing and financial management problems

Question 10

The creation of new business ventures within existing corporations is often referred to as _____.

A) restructuring
B) turnaround
C) startup renewal
D) intrapreneurship
E) diversification

Question 11

The company that has employed corporate entrepreneurship to create Post-it Notes, translucent dental braces, and Scotch Tape is _____.

A) 3M
B) Tricon
C) GE
D) Lockheed
E) Scientific Atlanta

Question 12

The goal at 3M is that _____ percent of the sales of each division come from products created within last five years.

A) 5
B) 15
C) 25
D) 35
E) 60

Question 13

Patrick Clark, the entrepreneur who opened an upscale restaurant on the upper east side of New York City failed in his venture because _______.

A) Gourmet magazine gave the restaurant a bad review
B) he was not in tune with what his clientele wanted
C) he did not trim his staff during hard times
D) capital was difficult to secure
E) he did not advertise

Question 14

All but one of the following are advantages of restaurants as an investment target.

A) Industry is fragmented
B) Good growth potential
C) Low risk of obsolescence
D) Potential for mass distribution
E) Venture capitalists like single-unit restaurant ventures

Question 15

The Uniform System of Accounts for the Lodging Industry (USALI) ____.

A) provide unstandardized systems
B) contain fewer operating statements than other accounting systems
C) nurture restaurant owners
D) permit comparison with industry standards
E) result in cash-flow problems for firms seeking venture capital

Question 16

According to examples in the text, theme restaurants like Planet Hollywood _____.

A) are particularly profitable
B) are usually diversified
C) suffer from high wages and stagnant menus
D) follow a low-cost provider strategy
E) experience a pattern of repeat customers

Question 17

Franchising is when _____.

A) two independent companies form a contractual agreement giving one the right to operate a business.
B) a firm operates in many different locations for a specified period of time
C) fees are paid to a lawyer for services that assist in establishing a strong brand name
D) business-format services are not sufficient to maintain profitability of an enterprise
E) risk is too large to merit other ventures like a business-format service

Question 18

Is franchising less risky than going into business on one's own?

A) yes, always
B) yes, if the business is a new and small franchise
C) yes, if the business is established with many units
D) no, it is not less risky under any circumstances
E) franchising is more risky if you engage in multi-unit franchisee ownership

Question 19

What is the most successful commercial sector on the Internet?

A) books
B) music
C) auctions
D) travel
E) clothing

Question 20

Electronic tourism products and services have evolved from simple systems to _____.

A) providing travel information for sightseeing
B) providing destination guides
C) integrated management systems
D) booking engines
E) fragmented systems technology

Question 21

Research at Cornell University on lodging prices has shown _____.

A) heavy discounting works to raise occupancies
B) discounting is advisable
C) discounting contributes to revenue gains
D) price discounting does not boost market share
E) market share raises with price reductions

Question 22

Discuss the sources of capital for entrepreneurs in a startup.

Question 23

Differentiate between the different types of legal forms an entrepreneurial firm can choose identified in Chapter 6 (i.e. partnership, limited partnership, and S corporation).

Question 24

Discuss the rules followed by 3M to encourage creativity.

Question 25

Discuss the factors that discourage innovation.

Question 26

Discuss the evolution of electronic tourism products and services