Question 1

All businesses have the potential to be aggressive growth firms.

Accepted Answer

Not all businesses have the potential to be aggressive growth firms due to factors like market size, industry constraints, and resource limitations.

Question 2

A firm's pace of growth is the rate it is growing ________.

Accepted Answer

The pace of growth reflects how fast the firm is growing on an annual basis.

Question 3

According to the textbook, most entrepreneurial firms ________.

Accepted Answer

According to the textbook, most entrepreneurial firms want to grow.

Question 4

Sustained growth is defined as growth in both revenues and profits over an extended period of time.

Accepted Answer

Sustained growth means an increase in both revenues and profits over a prolonged period, indicating a consistent improvement in the company's performance.

Question 5

According to the textbook, the three important things that a business can do to prepare for growth are ________.

Accepted Answer

The textbook emphasizes that a business can prepare for growth by appreciating the nature of business growth, staying committed to a core strategy, and planning for growth. Option A is close, but misses the emphasis on appreciating the nature of growth. Option C is incorrect as it mentions developing a viral marketing campaign, which is not a foundational step for growth. Option D is incorrect as diversifying beyond the core strategy may lead to loss of focus and decreased effectiveness. Option E is incorrect as hiring consultants is not a foundational step and diversifying beyond the core strategy may lead to loss of focus.

Question 6

Do most firms want to grow or are they reluctant to grow? What are the advantages of growth?

Accepted Answer

The answer of Do most firms want to grow or...

Question 7

According to the textbook, the businesses that have the potential to grow the fastest over a sustained period of time are ones that ________.

Accepted Answer

Businesses that solve significant problems or have a major impact on their customers' productivity or lives have a strong value proposition and can sustain growth over a longer period of time. This is because they are meeting a real need in the market and providing value to their customers. Cost leadership and aggressive promotion may lead to short-term growth, but it is not sustainable in the long run without a strong value proposition. Similarly, environmental trends may be a useful factor to consider, but it is not the sole determinant of sustained growth. Selling high-quality products is also important, but it needs to align with solving a significant problem or having a major impact on customers' lives in order to drive sustained growth.

Question 8

According to Chapter 13, business success doesn't always scale. What is meant by this statement?

Accepted Answer

The answer of According to Chapter 13, business success doesn't...

Question 9

Which of the following options was NOT identified in the textbook as an appropriate reason for growth?

Accepted Answer

The option "Maintain the appearance that the firm is successful" was not identified in the textbook as an appropriate reason for growth. The other options (A, B, C, and D) were discussed in the textbook as valid reasons for growth.

Question 10

Growth in both revenues and profits over a length of time is called ________ growth.

Accepted Answer

Sustained growth refers to a consistent increase in revenues and profits over a period of time. This is often seen as desirable by investors and can lead to a company being considered a strong performer in their industry. Limited growth suggests that a company may have reached a plateau, while abnormal growth may be unsustainable or the result of external factors. Normal or expected growth may not demonstrate significant improvement or potential for future success.

Question 11

A firm's core strategy is largely determined by its core competencies, or what it does particularly well.

Accepted Answer

A firm's core strategy is indeed largely determined by its core competencies, as these competencies give the firm a competitive advantage and influence its ability to succeed in its chosen market.

Question 12

MATI Energy, the company profiled in the opening feature of Chapter 13, sells energy drinks based on guayusa, a Latin American plant. With respect to growth, ________ is the hallmark of MATI.

Accepted Answer

The answer of MATI Energy, the company profiled in the...

Question 13

Jeremy Westbrook owns an organic food company which has increased both its profits and revenues over an extended period of time. Jeremy's firm is experiencing ________ growth.

Accepted Answer

Sustained growth refers to a continuous increase in both profits and revenues over an extended period of time. This fits the scenario described in the question, as Jeremy's organic food company has experienced growth which has been ongoing and continuous. The other answer choices do not accurately describe the type of growth being experienced.

Question 14

According to the textbook, there are three issues about business growth that entrepreneurs should appreciate. These issues are ________.

Accepted Answer

The correct answer highlights the nuanced understanding of business growth: not all businesses are suited for aggressive growth, there can be such a thing as growing too fast, and success doesn't necessarily scale linearly with growth.

Question 15

Business success doesn't always scale.

Accepted Answer

While a business may experience success and growth initially, it is not a guarantee that it will continue to scale as it expands. Factors such as market saturation, competition, and changes in economic conditions can all impact a business's ability to maintain its growth trajectory.

Question 16

Most entrepreneurial firms are reluctant to try to grow.

Accepted Answer

Most entrepreneurial firms strive to grow and expand their business, even if they face obstacles and challenges along the way. Growth is often seen as a sign of success and achievement in the entrepreneurial world.

Question 17

In regard to firm growth, evidence shows that ________.

Accepted Answer

Research has found that relatively few firms are able to achieve sustained growth over a long term. The majority of firms either remain in a steady state or fail.

Question 18

Which of the following is NOT one of the 10 warning signs that a business is growing too fast?

Accepted Answer

The 10 warning signs that a business is growing too fast include borrowing money to pay for routine expenses, customer complaints are up, those working with the business's financial structure are starting to worry, and e-mail and text messages start going unanswered. Comfortable operating margins are not typically a sign of growing too fast, but rather a sign of stability and success.

Question 19

Which of the following statements regarding firm growth is incorrect?

Accepted Answer

Growth in sales revenue alone does not necessarily indicate the potential for long-term success and survival in the market, as factors such as profitability, cash flow, and sustainability also contribute to a firm's growth and success.

Question 20

Which of the following is NOT an appropriate reason for firm growth?

Accepted Answer

Increasing the compensation of top managers is not a valid reason for firm growth as it does not directly contribute to the expansion or success of the business. It may benefit the individuals involved but does not necessarily benefit the firm as a whole. The other options, including attracting talented employees, accommodating key customers, achieving market leadership, and leveraging economies of scale, can all be valid reasons for pursuing growth.

Quiz 13: Preparing for and Evaluating the Challenges of Growth