Deck 13: Strategies for Growth and Managing the Implication of Growth

Question 1

If employees are involved in the decision-making process,they are more motivated to implement the decided course of action.

Answer 1

True

Question 2

When a manufacturer buys a chain of retail stores that carry its products,it is an example of backward integration.

Answer 2

False

Question 3

If employees are spread too thin because of growth,the firm will face problems of employee morale and increased employee turn over.

Answer 3

True

Question 4

Forward integration occurs when the firm acquires one of its suppliers.

Question 5

The value-added chain is usually available only to large national firms.

Question 6

Employee turnover for part-time workers is lower than that for full-time workers.

Question 7

Horizontal integration occurs at the same level of the value-added chain but simply involves a different,but complementary,value-added chain.

Question 8

One of the most successful diversification strategies is to diversify into unrelated products or unrelated markets to spread the risk.

Question 9

As a firm grows,higher volume increases production efficiency and increases its bargaining power with suppliers.

Question 10

The source of knowledge about the unmet demand for an energy bar (PowerBar)came from extensive market research of athletes.

Question 11

When a retail tire store buys a tire wholesaler this is an example of horizontal integration.

Question 12

Market development strategies involve selling the firm's existing products to a new group of customers,such as a new geographic market.

Question 13

Product development strategies use customers' experiences to develop new products for existing customers.

Question 14

Most new ventures need a human resource department from the first day of operations.

Question 15

A product development strategy relies on taking market share from competitors.

Question 16

To prevent pressures on the financial resources created by growth,the venture should avoid resource slack.

Question 17

Using a penetration strategy,the entrepreneur attempts to encourage existing customers to buy more of the firm's current products.

Question 18

Many entrepreneurs find that as they grow they need to change their management style.

Question 19

If the existing product is being sold to teenagers in one country and new entry involves selling the existing product to teenagers in a new country then this represents a new product use.

Question 20

Forward integration is taking a step back on the value chain toward the raw materials.

Question 21

One advantage of leasing equipment is that lease payments represent an expense and can be used as a tax deduction.

Question 22

To implement participative management the entrepreneur should have open communication with employees.

Question 23

The entrepreneur is required to withhold federal and state taxes for employees and then deposit payments monthly or quarterly.

Question 24

When compared to the costs of carrying excess inventory,the cost of lost sales is insignificant and should be ignored.

Question 25

The principle of prioritized planning requires the entrepreneur to categorize his or her tasks by their degree of importance and then to allocate time to tasks based on this categorization.

Question 26

A cash sensitivity analysis is used to provide a pessimistic and an optimistic cash estimate.

Question 27

Effective time management can increase an entrepreneur's job satisfaction.

Question 28

Transport mode selection can be important in inventory management.

Question 29

Even when cash flow problems are discovered,the pro forma budgeted amounts should never be changed.

Question 30

Time management is the process of improving an individual's productivity through more efficient use of time.

Question 31

Growing ventures tie up more cash in their inventory than in any other part of the business.

Question 32

The grocery and pharmaceutical industries have developed a computerized system to link chain members together and manage demand,distribution,and marketing.

Question 33

The principle of teamwork states that an entrepreneur spends too much time with employees and should try to become less accessible to them in order to increase their efficiency.

Question 34

The principle of reanalysis requires the entrepreneur to focus on the most important issues,even when under pressure.

Question 35

The principle of reanalysis requires the entrepreneur to categorize his or her tasks by their degree of importance and then to allocate time to tasks based on this categorization.

Question 36

In managing fixed assets the entrepreneur should buy,instead of lease,whenever possible.

Question 37

Developing standardized forms and procedures for recurring events would be an example of the principle of reanalysis.

Question 38

Most entrepreneurs could benefit from implementing time management techniques.

Question 39

Financial reporting to shareholders,bankers,and other investors give the marketing cost for each product and highlight the performance of managers in controlling costs.

Question 40

A recognition of the need to change personal attitudes and habits regarding the allocation of time is known as the principle of desire.

Question 41

___________ refers to a diversification strategy that involves taking a step forward (down)on the value-added chain toward the customers.

A)Backward integration
B)Horizontal integration
C)Forward integration
D)Conglomerate integration

Question 42

The penetration growth strategy:

A)focuses on developing new products for the existing market.
B)relies on taking market share from competitors.
C)expands the firm's product offering with complementary products.
D)aims to take new products into new markets.

Question 43

___________ refers to a diversification strategy that involves taking a step back (up)on the value chain toward the raw materials.

A)Horizontal integration
B)Backward integration
C)Forward integration
D)Conglomerate integration

Question 44

A market development strategy would not involve:

A)selling the existing product in new locations.
B)offering the same product to a different demographic group.
C)using customer experience to develop new uses for the existing product.
D)selling new products to consumer's purchasing the firm's existing products.

Question 45

Entrepreneurs that have a high ability to institute professional management practices but have low growth aspirations have "little potential" for growth.

Question 46

_____ strategies involve selling a new product to a new market.

A)Penetration
B)Market development
C)Product development
D)Diversification

Question 47

The _________ captures the steps it takes to develop raw materials into a product and get it into the hands of customers.

A)value chain
B)inventory
C)electronic data interchange
D)market accounting system

Question 48

Even though some entrepreneurs may way to grow they lack the ability to do so.

Question 49

_______ strategies involve developing and selling new products to people who are already purchasing the firm's existing products.

A)Penetration
B)Product development
C)Market development
D)Diversification

Question 50

The __________ strategy focuses on selling the firm's existing products to new groups of customers.

A)penetration
B)market development
C)product development
D)diversification

Question 51

A firm that manufactures washing machines starts to manufacture detergent illustrates _______ integration.

A)Backward
B)Forward
C)Horizontal
D)Side

Question 52

Even if there is a belief that the pursuit of growth will improve firm performance and enhance personal wealth,some entrepreneurs will still avoid growing their business.

Question 53

______ are used to characterize potential customers based upon their income,education,age,sex,and so forth.

A)Demographics
B)Development strategies
C)Democracies
D)Diversifications

Question 54

Most life-style entrepreneurs eagerly pursue firm growth.

Question 55

The Maxwell's company,PowerBar,was purchased by what company?

A)Proctor and Gamble
B)Nestle
C)Heinz
D)Pilsbury

Question 56

A computer company buys a hard-drive manufacturer.This is an example of:

A)Backward integration
B)Horizontal integration
C)Forward integration
D)Conglomerate integration

Question 57

In a horizontal diversification strategy,growth:

A)involves taking a step back (up)the value-added chain.
B)occurs at the same level of the value-added chain.
C)involves taking a step forward (down)the value added chain.
D)involves opportunities unrelated to the existing value-added chain.

Question 58

In order to better serve customers,all customer information should be stored in the memory of individual salespeople.

Question 59

Entrepreneurs who possess both the necessary abilities to make the transition to a more professional management approach and the aspiration to grow their businesses are the most likely to achieve firm growth.

Question 60

The strategy for growth in which the entrepreneur encourages existing customers to buy more of the firm's current product is a:

A)penetration strategy.
B)product development strategy.
C)market development strategy.
D)diversification strategy.

Question 61

The entrepreneur has which of the following responsibilities regarding taxes?

A)Withhold federal and state taxes for employees.
B)Pay state and federal unemployment taxes.
C)File end-of-year tax returns.
D)All of these.

Question 62

Reviewing meetings to make sure they are being run effectively illustrates which of the following principles?

A)Principle of desire
B)Principle of reanalysis
C)Principle of effectiveness
D)Principle of prioritized planning

Question 63

Conducting a(n)____ on cash flow involves assigning a + or - probability to the estimated value.

A)break even analysis
B)audit
C)distribution analysis
D)sensitivity analysis

Question 64

Entrepreneurs who have the necessary abilities for the transition to more professional management practices and the aspiration to grow their business:

A)have little potential for firm growth.
B)will achieve growth only if the entrepreneur replaces himself or herself with a professional manager.
C)are the most likely to achieve growth.
D)usually form life-style firms.

Question 65

The most often used method of transporting goods is:

A)air transport.
B)truck and rail transport.
C)barge transport.
D)tanker transport.

Question 66

Using a large proportion of part-time workers:

A)provides the firm with flexibility.
B)makes building organizational culture easier.
C)improves worker commitment to the organization.
D)increases the overall productivity of the organization.

Question 67

The _______ requires that the entrepreneur recognize that he or she is a time waster,that time is an important resource,and that there is a need to change personal attitudes and habits regarding the allocation of time.

A)principle of desire
B)principle of effectiveness
C)principle of analysis
D)principle of prioritized planning

Question 68

Which principle requires the entrepreneur to focus on the most important issues,even when under pressure?

A)Principle of desire
B)Principle of reanalysis
C)Principle of effectiveness
D)Principle of prioritized planning

Question 69

An increase in supplier prices may require:

A)raising the price of products/services.
B)purchase of lesser inventory.
C)an increase in the purchasing budget.
D)reviewing all other expenses and perhaps institute tighter controls.

Question 70

The computerized system developed by the grocery and pharmaceutical industry to link chain members is:

A)Efficient Computer Response (ECR)
B)Efficient Computer Distribution (ECD)
C)Electronic Demand Distribution (EDD)
D)Computerized Check Out Systems (CCOS)

Question 71

________ is the process of improving an individual's productivity through more efficient use of time.

A)Time management
B)Delegation
C)The principle of effectiveness
D)The principle of prioritized planning

Question 72

Which of the following would NOT be a recommended diversification strategy?

A)Backward integration.
B)Horizontal integration.
C)Forward integration.
D)Integration into markets unrelated to existing products.

Question 73

Acknowledgment that only a small amount of time is actually under one's control and that most of one's time is taken up by others is known as the:

A)principle of desire.
B)principle of teamwork.
C)principle of analysis.
D)principle of prioritized planning.

Question 74

Which of the following is not a benefit of time management?

A)Improvement of esprit de corps.
B)Decreased job satisfaction.
C)Increased productivity.
D)Less anxiety and tension.

Question 75

Creating a positive organization culture involves:

A)not communicating all matters to key employees.
B)being more involved in every aspect of the task,and avoiding delegation.
C)establishing a "we" spirit,not a "me" spirit in meetings and memorandum.
D)being conservative in the training process.

Question 76

Inventory control:

A)is not necessary for small firms.
B)eliminates the need to carry inventory.
C)balances the cost of carrying inventory with the cost of lost sales.
D)requires a computerized inventory system.

Question 77

Using a time sheet to record usage of time is part of the principle of:

A)desire.
B)effectiveness.
C)prioritized planning.
D)analysis.

Question 78

Involving employees in the decision-making process is:

A)a passive management style.
B)a participative management style.
C)an autocratic management style.
D)impossible for small businesses.

Question 79

Which principle states that the most important issues should be attended to during the time of day that an entrepreneur is most efficient?

A)Principle of desire
B)Principle of reanalysis
C)Principle of effectiveness
D)Principle of prioritized planning

Question 80

Growth of the venture:

A)lessens pressures on existing financial resources.
B)causes pressures on human resources.
C)lessens legitimacy of the firm.
D)lessens time spent on management decision making.