Question 1

Explain technical uncertainty.

Accepted Answer

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Question 2

Why do people tend to have such a hard time accepting an entrepreneur's business idea as legitimate? What should entrepreneurs do to convince people of their idea?

Accepted Answer

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Question 3

Assume that an entrepreneur obtained a patent and produced a product based on it. Another entrepreneur purchased the product,studied it,and designed a new product that was even better than the one patented by the first entrepreneur. What the second entrepreneur did is known as
A) inventing around.
B) illegal.
C) first mover strategy.
D) arrow's paradox.
E) efficacy.

Accepted Answer

The second entrepreneur invented around the first entrepreneur's patent by designing a new product that improved upon the patented product without infringing on the patent itself. This is a legal strategy to avoid patent infringement and create something unique.

Question 4

In order to protect information about trade secrets,an entrepreneur required all of the employees of the business to sign a contract that said they would not discuss these secrets with anyone outside of the business,and this requirement would continue for a certain period after they left the business. This type of contract is known as a
A) patent.
B) non-disclosure agreement.
C) first mover advantage.
D) tacit knowledge.
E) None of the above.

Accepted Answer

The contract described is a non-disclosure agreement, which is a common tool used to protect trade secrets and confidential information. Patents, first mover advantage, and tacit knowledge are all related to intellectual property and competitive strategies, but do not specifically address the issue of confidentiality and non-disclosure.

Question 5

List,describe,and provide an example of the two most common market-based modes of opportunity exploitation.

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Question 6

What are three reasons that lead entrepreneurs to start a small-scaled company and expand only if the business idea proves to be successful?

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Question 7

An entrepreneur obtained money from investors in order to start a business. One of the early things that the entrepreneur did was to buy a new sports car,something she always wanted. This action represents
A) first mover advantage.
B) moral hazard.
C) self-efficacy.
D) franchising.
E) nondisclosure agreement.

Accepted Answer

This action represents moral hazard because the entrepreneur is using the investors' money for personal enjoyment rather than investing it in the business. This behavior creates the risk that the entrepreneur may not take the necessary steps to ensure the success of the business, as she is not personally liable for the full amount invested.

Question 8

What is a competitive advantage and why does an entrepreneur need it?

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Question 9

Which of the following would allow an entrepreneur to establish a legal monopoly?
A) Obtain a patent.
B) Become vertically integrated.
C) Get a government permit.
D) Choices a and c are correct.
E) Choices a and b are correct.

Accepted Answer

Obtaining a patent grants an entrepreneur exclusive rights to an invention, creating a legal monopoly. Similarly, acquiring a government permit can grant exclusive rights to operate in certain industries or areas, also establishing a legal monopoly. Vertical integration, while it can lead to market dominance, does not inherently create a legal monopoly.

Question 10

An entrepreneur bought a franchise to operate a restaurant. The agreement says that the entrepreneur must pay the franchisor 5% of total sales per month. Now,the franchisor insists on selling another franchise in the same market area unless the entrepreneur increases the monthly payment to 7%. This is an example of
A) free riding.
B) technical uncertainty.
C) gaining legitimacy.
D) hold-up.
E) patent.

Accepted Answer

This situation is an example of hold-up, where one party (the franchisor) uses their bargaining power to demand more from the other party (the entrepreneur) after the initial agreement has been made. The threat of selling another franchise in the same market area puts pressure on the entrepreneur to agree to the higher monthly payment.

Question 11

Assume that you have developed several electronic spreadsheets that would help small business managers to keep track of information about purchases that their customers made. Your spreadsheets would help track who bought what,when,in combination with what other products,etc. The knowledge gained from this data would help the small business do a better job of overall marketing. Now you need to raise money to start your business to develop and sell your electronic spreadsheets. However,you are concerned that since you must explain your spreadsheets in order to get someone to invest in your business,others will now know how your products works and might develop their own rather than invest in your business. Your concern represents
A) causal ambiguity.
B) monopoly.
C) Arrow's Paradox.
D) a patent.
E) networks.

Accepted Answer

Arrow's Paradox describes a situation where, for an innovation to be sold or funded, it must be revealed to some extent. This revelation risks the innovation being copied or stolen, which is the concern described in the scenario.

Question 12

Which of the following have been shown to be related to an entrepreneur's business being more successful?
A) Self-efficacy.
B) Goal setting.
C) A government permit.
D) Choices a and b are correct.
E) All are correct (a, b, and c).

Accepted Answer

Self-efficacy and goal setting have been consistently linked to entrepreneurial success, while a government permit may be a necessary legal requirement but is not directly related to success. Therefore, choice D is the best answer.

Question 13

A chemist developed a way to mix three chemicals together in such a way that they result in a very strong,yet flexible glue. Only the chemist knows how to do this. It is known as a/an
A) arrow's paradox.
B) trade secret.
C) government permit.
D) franchise effect.
E) self-efficacy.

Accepted Answer

A trade secret is confidential and valuable information (such as a formula or technique) that is only known by its owner or a select few. In this case, the chemist has developed a way to mix chemicals to create a strong and flexible glue, which is likely a valuable trade secret.

Quiz 10: Strategy: Planning For Competitive Advantage

Explain technical uncertainty.

Why do people tend to have such a hard time accepting an entrepreneur's business idea as legitimate? What should entrepreneurs do to convince people of their idea?

Assume that an entrepreneur obtained a patent and produced a product based on it. Another entrepreneur purchased the product,studied it,and designed a new product that was even better than the one patented by the first entrepreneur. What the second entrepreneur did is known as

List,describe,and provide an example of the two most common market-based modes of opportunity exploitation.

What are three reasons that lead entrepreneurs to start a small-scaled company and expand only if the business idea proves to be successful?

An entrepreneur obtained money from investors in order to start a business. One of the early things that the entrepreneur did was to buy a new sports car,something she always wanted. This action represents

What is a competitive advantage and why does an entrepreneur need it?

Which of the following would allow an entrepreneur to establish a legal monopoly?

Which of the following have been shown to be related to an entrepreneur's business being more successful?

A chemist developed a way to mix three chemicals together in such a way that they result in a very strong,yet flexible glue. Only the chemist knows how to do this. It is known as a/an