Question 1

Market-based modes refers to knowledge on how to do something but is not written down or codified.

Accepted Answer

Market-based modes refer to the mechanisms and strategies for trading, buying, and selling goods or services in a market. Knowledge on how to do something but is not written down or codified is referred to as tacit knowledge.

Question 2

Entrepreneurs have no ways of protecting their idea after the business is open to the public.

Accepted Answer

Entrepreneurs can protect their ideas through various means such as patents, copyrights, trademarks, and trade secrets, even after their business is open to the public.

Question 3

Adverse selection occurs when people take actions that benefit themselves at the expense of others.

Accepted Answer

Adverse selection happens when individuals have access to more information than the others involved in the transaction, resulting in an uneven distribution of benefits and costs. For example, if an individual knows that they have a higher risk of getting into a car accident but doesn't share that information with their insurance provider, they are engaging in adverse selection by getting a lower rate at the expense of the insurance company and other policyholders.

Question 4

A restaurant that grows its own vegetables is vertically integrated.

Accepted Answer

Vertical integration refers to a company controlling different stages of production, from raw materials to final product or service. In this case, the restaurant grows its own vegetables, controlling the supply of raw materials for their dishes, which is an example of vertical integration.

Question 5

Which of the following is most likely a competitive advantage?
A) Using only fresh ingredients on pizzas when competitors use canned ingredients.
B) Having the most popular comedian in town perform at your bar.
C) Staying open later then your competitors.
D) Providing a type of service that your customers like and identify with your business.
E) None of the Above

Accepted Answer

The answer of Which of the following is most likely...

Question 6

A franchised restaurant is an example of a hierarchical mode of business.

Accepted Answer

A franchised restaurant operates under a business model where individual owners (franchisees) operate their locations under the branding and operational guidelines set by the franchisor, which is more characteristic of a network model rather than a purely hierarchical model.

Question 7

Causal ambiguity is defined as a piece of intellectual property that can be patented.

Accepted Answer

Causal ambiguity refers to the difficulty in determining the cause of a particular outcome or phenomenon, and is not something that can be patented as intellectual property.

Question 8

A business that is totally owned by an entrepreneur is known as a hierarchical mode type of business.

Accepted Answer

The answer of A business that is totally owned by...

Question 9

A patent is a type of monopoly.

Accepted Answer

A patent grants the holder exclusive rights to produce and sell an invention or innovation for a certain period of time, creating a temporary monopoly in the market.

Question 10

Self-efficacy refers to ones confidence in his or her own abilities.

Accepted Answer

This is the correct definition of self-efficacy.

Question 11

Which of the following could an entrepreneur use to make it more difficult for some other business to exploit the same opportunity that the entrepreneur has?
A) Use legal means to block imitation.
B) Control resources that are needed to exploit the opportunity.
C) Develop loyal customers.
D) All of the above (a, b, and c) are correct.
E) A and b are correct.

Accepted Answer

Using legal means to block imitation, controlling resources needed to exploit the opportunity, and developing loyal customers are all effective strategies that entrepreneurs can use to make it more difficult for other businesses to exploit the same opportunity. Therefore, option D, "All of the above (a, b, and c) are correct," is the best answer.

Question 12

The authors suggest that a franchisee often has more ambition than a typical general manager of a store.

Accepted Answer

The authors suggest that a franchisee often has more ambition than a typical general manager of a store.

Question 13

One way to deal with uncertainty in starting a new business is to start on a small scale.

Accepted Answer

Starting on a small scale allows for testing of the business idea, gathering feedback from customers, and minimizing financial risk in case the business does not succeed.

Question 14

Franchising,a market-based mode,usually requires less capital than a hierarchical mode business .

Accepted Answer

Franchising typically requires less capital than establishing a hierarchical mode business because franchisees typically invest their own capital in opening and operating the franchise location, rather than the franchisor bearing the majority of the startup costs.

Question 15

Suppose you wanted to open up a pizza place in Chestnut,AZ. This is a small town with no existing restaurants. You,as the entrepreneur,would be considered which of the following business structures?
A) Monopoly.
B) Joint Venture.
C) Sole proprietorship.
D) Trade Secret.
E) Alliance.

Accepted Answer

Since there are no existing restaurants in Chestnut, AZ, opening a pizza place would make you a monopoly in the restaurant market of that town.

Question 16

Tacit knowledge is the hardest information for competition to obtain.

Accepted Answer

Tacit knowledge refers to knowledge that is difficult to transfer or explain, as it is based on personal experience, intuition, or expertise. It is often acquired through hands-on practice or interaction with others, and it may be difficult to articulate or document. For this reason, it is more difficult for competitors to obtain and replicate, making it a valuable and potentially sustainable competitive advantage.

Question 17

A potential disadvantage of establishing alliances with an established firm as part of an entrepreneurial strategy is that the alliance partner might use its size and power to control the business relationship.

Accepted Answer

When a smaller entrepreneurial firm establishes an alliance with an established firm, the bigger partner might use its size and power to dominate the partnership. This can lead to the smaller firm's loss of control over the business relationship, which can be a disadvantage.

Question 18

By developing a competitive advantage,the entrepreneur makes it tougher for others to imitate the business idea perfectly and allows the entrepreneur to the capture the profits.

Accepted Answer

Developing a competitive advantage makes it tougher for others to imitate the business idea perfectly, and this allows entrepreneurs to capture profits.

Question 19

No strategies are powerful enough to manage the technical,market,and competitive uncertainty and information asymmetry that new ventures face.

Accepted Answer

While no strategies can completely eliminate uncertainty and information asymmetry, there are several strategies that have been shown to reduce the impact of these challenges and increase the likelihood of success for new ventures. These strategies include conducting thorough market research, building strong networks and partnerships, diversifying revenue streams, and maintaining a flexible approach to business decisions.

Question 20

Writing goals as part of a comprehensive business plan can help an entrepreneur to be more successful.

Accepted Answer

Writing goals as part of a comprehensive business plan can help an entrepreneur to have a clear vision of what they want to achieve and a roadmap to follow to achieve it. This can lead to better decision-making, improved focus, and the ability to measure progress towards achieving the desired outcomes, ultimately increasing the chances of success.

Quiz 10: Strategy: Planning For Competitive Advantage

Market-based modes refers to knowledge on how to do something but is not written down or codified.

Entrepreneurs have no ways of protecting their idea after the business is open to the public.

Adverse selection occurs when people take actions that benefit themselves at the expense of others.

A restaurant that grows its own vegetables is vertically integrated.

Which of the following is most likely a competitive advantage?

A franchised restaurant is an example of a hierarchical mode of business.

Causal ambiguity is defined as a piece of intellectual property that can be patented.

A business that is totally owned by an entrepreneur is known as a hierarchical mode type of business.

A patent is a type of monopoly.

Self-efficacy refers to ones confidence in his or her own abilities.

Which of the following could an entrepreneur use to make it more difficult for some other business to exploit the same opportunity that the entrepreneur has?

The authors suggest that a franchisee often has more ambition than a typical general manager of a store.

One way to deal with uncertainty in starting a new business is to start on a small scale.

Franchising,a market-based mode,usually requires less capital than a hierarchical mode business .

Suppose you wanted to open up a pizza place in Chestnut,AZ. This is a small town with no existing restaurants. You,as the entrepreneur,would be considered which of the following business structures?

Tacit knowledge is the hardest information for competition to obtain.

A potential disadvantage of establishing alliances with an established firm as part of an entrepreneurial strategy is that the alliance partner might use its size and power to control the business relationship.

By developing a competitive advantage,the entrepreneur makes it tougher for others to imitate the business idea perfectly and allows the entrepreneur to the capture the profits.

No strategies are powerful enough to manage the technical,market,and competitive uncertainty and information asymmetry that new ventures face.

Writing goals as part of a comprehensive business plan can help an entrepreneur to be more successful.