Deck 3: Generating and Exploiting New Entries

Question 1

The longer the entrepreneur takes to research a new entry,the less accurate customer demand estimates are. 

Answer 1

False

Question 2

Experience is idiosyncratic-unique to the life of the individual. 

Answer 2

True

Question 3

The purpose of a franchise is to protect the owner of a unique technology from people imitating that technology. 

Answer 3

False

Question 4

A highly skilled workforce represents an important resource,but the impact of this resource on performance is reduced when it is combined with an organizational culture that enhances communication,teamwork,and innovativeness. 

Question 5

The knowledge needed to generate innovation cannot be easily learned from a textbook. 

Question 6

The long-run performance of a firm is dependent upon the ability to generate and exploit numerous new entries. 

Question 7

An entrepreneurial strategy is the set of decisions,actions,and reactions that protect the firm from new entrants. 

Question 8

The assessment of a new entry attractiveness is less about whether this opportunity "really" exists or not and more about whether the entrepreneur believes he or she can make it work. 

Question 9

In order to be the basis for a firm's superior performance,a bundle of resources must be valuable,rare,and imitable. 

Question 10

The period of time when the environment is favorable for entrepreneurs to exploit a particular new entry is called the window of opportunity. 

Question 11

An error of omission occurs from the decision not to act of a new entry opportunity when in hindsight they should have. 

Question 12

When the window of opportunity is open,the environment is unfavorable for entrepreneurs to exploit a new product or enter a new market with an existing product. 

Question 13

An error of commission occurs from the decision not to act on a new entry opportunity. 

Question 14

Knowledge is the basis of the entrepreneurial resource. 

Question 15

Technological knowledge refers to the entrepreneur's possession of information,technology,know-how,and skills that provide insight into a market and its customers. 

Question 16

Newness of a new entry is always an advantage. 

Question 17

Market research,such as surveys,has limited effectiveness because it is often difficult for customers to articulate the underlying problems they have with a product or service. 

Question 18

An entrepreneurial strategy has three key stages-the generation of a new entry opportunity,the exploitation of a new entry opportunity,and a feedback loop back to the first stage. 

Question 19

The entrepreneur's market knowledge is deeper than the knowledge that could be gained through market research. 

Question 20

A new entry can be either offering a new product to a new market or creating a new organization. 

Question 21

Building customers' switching costs decreases barriers to entry for other firms. 

Question 22

A narrow scope strategy reduces the risks associated with competition. 

Question 23

Adaptations necessary to meet changes in market demand are difficult because an organization resists change. 

Question 24

Key success factors are the requirements that any firm must meet to successfully compete in a particular industry. 

Question 25

Technological uncertainty is eliminated by a superior technology. 

Question 26

To overcome customer uncertainty,the venture should educate customer through demonstration and documentation on how to use the product. 

Question 27

The late mover is able to operate in the industry for a grace period under conditions of limited competition. 

Question 28

By overestimating demand,the entrepreneur will suffer the costs of undercapacity. 

Question 29

A narrow scope strategy offers a small product range to a small number of customer groups. 

Question 30

The decision to exploit or not to exploit a new entry opportunity depends on whether the entrepreneur has sufficient information,and on whether the window of opportunity is still open.

Question 31

A narrow scope strategy is better than a broad scope strategy in an environment high in uncertainty. 

Question 32

Emerging industries are industries that have been around for years but are just starting to experience explosive growth. 

Question 33

Entrepreneurs that delay entry have the advantage of more information about market demand. 

Question 34

If a company has a superior product,customers will always be willing to pay a higher price for higher value. 

Question 35

Environmental changes are highly unlikely in emerging industries. 

Question 36

If there is a poor fit between its resources and the external environment,then the firm will not enjoy superior performance. 

Question 37

Using a broad scope strategy helps to reduce the risk of market uncertainty. 

Question 38

Competition within an industry always has a negative effect on industry growth. 

Question 39

Customers always embrace change in products and services. 

Question 40

First movers can monitor changes in the market that might be difficult or impossible to detect for those firms not participating in the market. 

Question 41

Which is the best way to gain knowledge about a potential new entry  

A) Marketing research
B) Internet research
C) Entrepreneur's market experience and knowledge
D) Surveys

Question 42

Franchising is an example of a new entry strategy that increases the risk of downside loss for the franchisees. 

Question 43

A new entry includes all of the following except: 

A) offering a new product to a new market
B) offering an established product to an new market
C) creating a new brand name for your company
D) creating a new organization

Question 44

Lack of informal communication systems is one of the assets of newness. 

Question 45

The window of opportunity is part of: 

A) assessing the attractiveness of a new entry opportunity.
B) creating a resource bundle.
C) choosing an entry strategy.
D) choosing a risk reduction strategy.

Question 46

The period of time when the environment is favorable for entrepreneurs to exploit a particular new entry is the: 

A) market research phase.
B) window of opportunity.
C) technology window.
D) narrow-scope strategy.

Question 47

Which of the following statements is true  

A) Knowledge is a valuable entrepreneurial resource that is gained through formal education.
B) Knowledge is easily communicated and common.
C) Knowledge based on experience is unlikely to be learned in a classroom.
D) Research, more than knowledge, leads to the generation of new entries in markets and technologies.

Question 48

________ are used to protect the owner of the technology from people imitating the technology. 

A) Franchises
B) Switching costs
C) Patents
D) Distributors

Question 49

Imitation of other products increases the risk of downside loss associated with new entry. 

Question 50

An error of omission occurs when an entrepreneur: 

A) enters a market but overestimates the customer demand.
B) develops a product for a market that is too narrow.
C) decides not to enter a market that is, in fact, desirable.
D) fails to understand the limitations of a market.

Question 51

________ knowledge refers to the entrepreneur's possession of information,technology,know-how,and skills that provide insight into the industry and customers. 

A) Technological
B) Resource
C) Opportunity
D) Market

Question 52

Which of the following is not one of the three key stages of an entrepreneurial strategy  

A) The generation of a new entry opportunity
B) Risk reduction strategies
C) A feedback loop
D) The exploitation of a new entry opportunity

Question 53

A "me-too" strategy consists of copying products that already exist and attempting to build an advantage through minor variations. 

Question 54

The basic building blocks to a firm,or the inputs into the production process,are: 

A) competition.
B) strategy.
C) liabilities.
D) resources.

Question 55

Technological knowledge: 

A) is gained through market research.
B) can lead to a new product that is the basis for a new entry.
C) does not help unless the market applicability is obvious.
D) does not help if the market is limited.

Question 56

The ________ is less about whether an opportunity really exists and more about whether the entrepreneur believes they can make it work.

A) error of commission
B) window of opportunity
C) error of omission
D) assessment of a new entry's attractiveness

Question 57

The three major risk reduction strategies discussed in the text are narrow scope,broad scope and imitation. 

Question 58

To be the basis of a firm's superior performance over competitors for an extended period of time,valuable and rare resources need to be: 

A) inimitable.
B) fully utilized.
C) patented.
D) shared.

Question 59

The set of decisions,actions,and reactions that first generate,and then exploit over time,a new entry is: 

A) entrepreneurial financing.
B) entrepreneurial strategy.
C) bootstrapping.
D) informal organization.

Question 60

When conducting research on a new entry: 

A) the more information the entrepreneur has, the more difficult it is to focus on the consumer.
B) the entrepreneur must rely upon surveys more that market knowledge.
C) extensive research is expensive in terms of time and money.
D) lesser prior knowledge is advantageous since it minimizes the risk of entrepreneurial bias.

Question 61

If there is a good fit between the venture's bundle of resources and the external environment: 

A) the firm will be rewarded with superior performance.
B) the entrepreneur will be unable to compete in the market segment.
C) environmental variables will be irrelevant.
D) demand uncertainty will be irrelevant.

Question 62

Customer uncertainty can take all of the following forms except: 

A) not understanding how to use the product
B) not knowing whether the product will perform as expected
C) not knowing where to buy the product
D) being uncertainty adverse in general and resistant to change

Question 63

The entrepreneurial attributes of persistence and determination,which are so beneficial when the new venture is on the "right course," 

A) can make the entrepreneur more suitable to work in volatile markets.
B) can hasten the process of adapting to sudden changes.
C) can aid the entrepreneur in recognizing, and implementing changes.
D) can inhibit the ability of the entrepreneur to detect, and implement, change.

Question 64

In emerging industries: 

A) environmental factors do not affect customer demand.
B) entrepreneurs confront demand certainty.
C) environmental changes are highly likely.
D) it is easier to respond effectively to sudden changes.

Question 65

First movers face: 

A) market rigidities.
B) high entry barriers.
C) cost disadvantages.
D) demand uncertainty.

Question 66

Changes needed to adapt to environmental changes: 

A) are easier in established organizations because of inertia.
B) can be avoided by late entry.
C) are more difficult because of the tendency to escalate commitment.
D) don't affect smaller organizations.

Question 67

Lead time is: 

A) the time from production to market delivery
B) the time in which the first mover operates in the market under conditions of limited competition
C) the time it takes for an entrepreneur to go from the concept stage to the delivery stage
D) the time between product introduction and customer acceptance

Question 68

By being first to market a product,the venture: 

A) tends to lose customer loyalties to late entrants.
B) loses out to switching costs.
C) secures access to important sources of supply.
D) can sell its products and services at a higher price.

Question 69

Regarding entry into a new market,which of the following is true  

A) First movers gain expertise through participation.
B) First movers are not able to detect changes in the market.
C) First movers suffer a cost disadvantage.
D) First movers face more competitive rivalry.

Question 70

The costs that must be borne by customers if they are to stop purchasing from the current supplier and begin purchasing from another is: 

A) customer switching costs.
B) lead time.
C) resource costs.
D) resource bundle errors.

Question 71

Later movers do not face: 

A) entrenched competitors.
B) high growth markets.
C) lower market uncertainty.
D) reduced uncertainty over technologies.

Question 72

Barriers to entry include all of the following except: 

A) patents
B) switching costs
C) environmental instability
D) building customer loyalties

Question 73

First movers: 

A) are not able to gain from moving down the experience curve.
B) are better positioned to satisfy customers.
C) face more competition than late movers.
D) fail to secure important channels.

Question 74

By delaying entry,late movers: 

A) can learn from the actions of first movers without incurring the same costs.
B) have less information about market demand.
C) secure the window of opportunity.
D) can avoid high entry barriers.

Question 75

A disadvantage of being a first mover is: 

A) environmental instability.
B) cost disadvantages.
C) long lead time to gain knowledge.
D) a limited market.

Question 76

________ refers to the probability,and magnitude,of downside loss. 

A) Reward
B) Risk
C) Liability of newness
D) Technology error

Question 77

Technological uncertainty: 

A) is a result of uncertainty about customer demand.
B) occurs because an alternative technology could be introduced by competitors.
C) only occurs in emerging markets.
D) can be avoided by early entrants with superior technology.

Question 78

Which of the following is not a reason that first movers are better positioned to satisfy their customers  

A) They have a chance to select and secure the most attractive segments of the market
B) They have the chance to position themselves at the center of the market
C) They have less uncertainty over the nature of the market
D) They have a chance to establish their product as the industry standard

Question 79

By entering a market later, 

A) customer uncertainties have already been substantially reduced.
B) the venture can build a reputation as a "founder."
C) the company can erect barriers to entry and imitation.
D) the player gets to operate only for a grace period.

Question 80

Frequent flier miles would be an example of which barrier to entry  

A) Building customer loyalties
B) Securing access to supply of key resources
C) Creating product uniqueness
D) Building in switching costs