Question 1

Industry analysis refers to searching out,and understanding,information about whether,and how,a new firm might fit into an existing industry.

Accepted Answer

Industry analysis is the process of gathering and analyzing information about the structure, dynamics, and characteristics of an industry to understand its current trends, challenges, opportunities, and potential for growth. This information helps new firms to identify their target market, assess competition, and formulate effective business strategies.

Question 2

Many aspects of an industry determine how much success a new venture will have. Which of the following traits would make an industry unattractive for an entrepreneur to enter?

Accepted Answer

An industry that is advertising intensive may require significant investment in marketing and advertising which can be costly for a new venture. Therefore, it may not be an attractive industry for an entrepreneur to enter.

Question 3

A repertory grid can be used to help understand how members of a focus group perceive and evaluate a product.

Accepted Answer

A repertory grid is a method used in qualitative research that aims to identify the different ways in which individuals perceive a particular product or concept. It involves collecting data through semi-structured interviews and using a grid format to map out the factors that influence a person's perceptions and evaluation of the product. The grid helps to identify patterns and themes within the data, and can be used to inform product development and marketing strategies. Therefore, it can be used to understand how members of a focus group perceive and evaluate a product.

Question 4

In gathering information about a certain market,an entrepreneur gets data from the last census in the United States. This type of data is called primary data.

Accepted Answer

The last census in the United States is a government-collected data and therefore, is an example of secondary data. Primary data is data collected directly by the entrepreneur through surveys, interviews or experiments.

Question 5

Many new ventures chose to make their company a Subchapter S corporation,but then,if they grow and prosper,switch to regular status.

Accepted Answer

It is common for small businesses to initially choose Subchapter S corporation status for tax benefits, but as they grow and meet certain criteria, they may choose to switch to a regular, or C corporation status. This allows them to access more funding opportunities and potentially lower their tax burden in certain circumstances.

Question 6

To eligible for the HubSone program,a small business must be located in a historically underutilized business zone,be wholly owned and controlled by U.S.citizens,and draw at least 85 percent of its employees from a HubZone.

Accepted Answer

The HUBZone program requires that a small business must be located in a Historically Underutilized Business Zone, be at least 51% owned and controlled by U.S. citizens, and at least 35% of its employees must reside in a HUBZone.

Question 7

Secondary data is also known as indirect data.

Accepted Answer

Secondary data is data that has been previously collected by someone else, and is not collected directly by the researcher. It is also known as indirect data.

Question 8

In market research,a perceptual map refers to a way to identify the important things in a product that customers perceive and evaluate.

Accepted Answer

A perceptual map is indeed a market research tool used to identify the important attributes or qualities of a product or brand that customers perceive and evaluate. It helps in understanding the perceptions and preferences of customers and how they view different options in the market. This information can then be used to make better decisions regarding product design, marketing, and positioning.

Question 9

Feasibility analysis helps to answer the question,"Is this idea really viable?"

Accepted Answer

Feasibility analysis is conducted to determine whether an idea or project is realistic, practical, and achievable. It considers factors such as technical feasibility, economic viability, legal requirements, and market demand to determine whether an idea is worth pursuing. Therefore, it helps to answer the question of whether the idea is really viable.

Question 10

The best way to gather information about whether or not potential customers will buy a new product is to ask them.

Accepted Answer

While asking potential customers can provide insights, it's not always reliable because people's stated intentions often differ from their actual purchasing behavior. Observational studies, market tests, and analyzing purchasing patterns of similar products can provide more accurate predictions.

Question 11

The first-mover advantage always results in financial success for the business that achieves it.

Accepted Answer

The first-mover advantage does not always result in financial success. While being the first in the market can provide advantages such as brand recognition and customer loyalty, it also comes with risks such as high initial costs and the possibility of competitors quickly entering and improving upon the original product or service. Success ultimately depends on a variety of factors including market conditions, business strategy, and execution.

Question 12

People in a group are making a decision as a group. The members do not want to bring up information that they think is critical of the decision being discussed. This is known as groupthink.

Accepted Answer

Groupthink occurs when members of a group prioritize maintaining consensus and conformity over considering alternative viewpoints and critical information that may lead to a better decision. As a result, members may not bring up information that challenges the group's perspective, leading to flawed decision-making.

Question 13

Market research frequently can give an entrepreneur very precise information about customers and what they want.

Accepted Answer

The answer of Market research frequently can give an entrepreneur...

Question 14

Smart entrepreneurs will always be able to anticipate which new products or services will be adopted by customers.

Accepted Answer

While smart entrepreneurs may be able to make educated guesses about what customers may want, it is impossible to accurately anticipate which new products or services will be adopted by customers with 100% certainty. Consumer preferences can be unpredictable and influenced by various factors, including social and cultural trends, technological advancements, and economic conditions. Even large companies with significant resources and market research sometimes fail to gain traction with new products.

Question 15

Focus groups are made up of at least 50 people who are similar to potential customers and who meet for one to two hours to describe their perceptions of and reactions to relevant products.

Accepted Answer

A focus group typically consists of 6-10 individuals who are similar to the target audience and meet for 1-2 hours to discuss their perceptions and opinions about a product.

Question 16

Before launching a new company,entrepreneurs need to gather basic information that will let them know

Accepted Answer

Before launching a new company, entrepreneurs need to gather information to assess the feasibility of their venture, determine the specific form their products and services should take, and understand how to market these effectively. This comprehensive approach helps in making informed decisions and strategizing for success.

Question 17

Entrepreneurs have had a growing voice in shaping government policy mainly because their contribution to the strength of the economy has been increasingly recognized.

Accepted Answer

Entrepreneurs have been acknowledged as important drivers of economic growth and job creation, and as a result, policymakers have begun to seek their input and consult them in crafting policies that support entrepreneurship and small business development.

Question 18

Entrepreneurs may seek ways of reducing tax rates by converting capital gains into profits.

Accepted Answer

Entrepreneurs typically seek ways to reduce tax rates by converting ordinary income into capital gains, not the other way around, because capital gains are often taxed at a lower rate than ordinary income.

Question 19

Research findings show that decisions made by groups are safer and more accurate than decisions made by individuals.

Accepted Answer

Research indicates that while group decisions can benefit from diverse perspectives and reduced biases, they are not inherently safer or more accurate than individual decisions. Factors such as groupthink, pressure to conform, and diffusion of responsibility can sometimes lead to poorer outcomes in group decision-making processes.

Question 20

The higher the marginal tax rate in the United States,the lower the rate of self-employment.

Accepted Answer

This is because higher marginal tax rates reduce the take-home pay for self-employed individuals, making it less attractive for them to start or continue their own businesses. Lower tax rates provide greater incentives for individuals to work for themselves.

Quiz 4: What Entrepreneurs Need to Know Before They Start: Acquiring and Interpreting Information About Markets Competitors and Government