Question 1

An entrepreneur should have leadership abilities in order to successfully start, operate, and grow his or her e-business.

Accepted Answer

Leadership abilities are crucial for an entrepreneur to effectively guide the team, make strategic decisions, and navigate the challenges of starting, operating, and growing an e-business.

Question 2

A stress management plan is not important to an entrepreneur who is starting his or her own business.

Accepted Answer

A stress management plan is crucial for entrepreneurs starting their own business, as it helps them handle the high levels of stress and pressure that come with entrepreneurship, ensuring better decision-making, health, and overall success.

Question 3

Organizational skills and self-confidence are not important entrepreneurial abilities.

Accepted Answer

Organizational skills and self-confidence are crucial for entrepreneurs as they help in managing tasks efficiently and facing challenges with assurance.

Question 4

Starting your own business is a great way to set your own work schedule which typically includes plenty of time off to enjoy other pursuits.

Accepted Answer

Starting your own business often requires long hours, especially in the early stages, leaving less time for other pursuits until the business is well-established.

Question 5

Before beginning an entrepreneurial adventure, you should carefully review your ongoing financial needs and set aside funds to cover those needs for some time.

Accepted Answer

Starting a business can be financially unpredictable, so having a financial cushion to cover personal expenses during the initial phase is crucial for stability.

Question 6

To begin the entrepreneurial process, you must first decide whether to buy an existing business or start a new one.

Accepted Answer

The entrepreneurial process can begin with identifying an opportunity or idea, which may not necessarily involve deciding between buying an existing business or starting a new one.

Question 7

The time and effort an entrepreneur puts in to starting his or her own business is called sweat equity.

Accepted Answer

Sweat equity refers to the non-monetary investment that entrepreneurs or founders of a company put into their venture, which includes time, effort, and hard work.

Question 8

The entrepreneurial process is a multistep process that begins with determining entrepreneurial abilities and ends with harvesting a business.

Accepted Answer

The entrepreneurial process indeed involves multiple steps starting from identifying entrepreneurial abilities, generating ideas, evaluating opportunities, planning the venture, assembling resources, launching, and finally, managing growth and harvesting the business.

Question 9

An entrepreneur can harvest his or her own business by letting it become a "cash cow," by going public, or by selling the business.

Accepted Answer

An entrepreneur can harvest their business through various exit strategies such as letting it become a "cash cow" (generating steady cash flow with minimal investment), going public through an IPO, or selling the business to another company or individual. These methods allow the entrepreneur to realize the financial value of their investment and efforts.

Question 10

E-business ideas span the spectrum from selling hard-to-find food products directly to consumers, to auctioning excess oil and gas capacity, to offering online mediation services, to providing Web site hosting services, and more.

Accepted Answer

E-business encompasses a wide range of online business activities for products and services, including those mentioned, demonstrating the diverse nature of internet-based commerce.

Question 11

Startup e-businesses based on flawed e-business models or unsound business practices can still expect to be successful in today's exciting global e-business economy.

Accepted Answer

Many startup e-businesses fail because they are based on flawed e-business models or unsound business practices, which cannot sustain long-term success in the competitive and rapidly changing global e-business economy.

Question 12

An important factor in an e-business's ultimate success or failure is how well its original e-business idea adapts to changes in the marketplace.

Accepted Answer

Adaptability to market changes is crucial for an e-business's success because it ensures the business remains relevant, competitive, and able to meet evolving customer needs and preferences.

Question 13

The network effect is the phenomena in which an e-business continues to operate successfully in the face of rapid growth.

Accepted Answer

The network effect refers to the phenomenon where a product or service gains additional value as more people use it, not specifically about an e-business's ability to handle rapid growth.

Question 14

Viral marketing is an innovative marketing idea that exploits the network effect to rapidly spread information about a product or service across a marketplace.

Accepted Answer

Viral marketing leverages social networks and other technologies to produce increases in brand awareness or achieve other marketing objectives (such as product sales) through self-replicating viral processes, similar to the spread of viruses or computer viruses.

Question 15

Scalability refers to the growing value of e-business to the economy as more and more consumers and businesses conduct business transactions online.

Accepted Answer

Scalability refers to the ability of a system, network, or process to handle a growing amount of work, or its potential to be enlarged to accommodate that growth. It does not specifically refer to the growing value of e-business to the economy.

Question 16

Low-cost Internet technologies have made it more difficult for many new e-businesses to enter an online marketplace.

Accepted Answer

Low-cost Internet technologies have lowered the barriers to entry, making it easier for many new e-businesses to enter an online marketplace.

Question 17

The growth in the number of C2C auction sites, such as eBay, provides a good example of the ease with which new e-businesses can enter a virtual marketplace.

Accepted Answer

C2C (Consumer-to-Consumer) auction sites like eBay exemplify how the digital environment lowers barriers to entry, allowing new e-businesses to establish themselves with relative ease compared to traditional physical marketplaces.

Question 18

An e-business's ability to secure first-mover advantage and name identification guarantees its success over its competitors.

Accepted Answer

Securing a first-mover advantage and name recognition can provide initial benefits, but it does not guarantee long-term success over competitors. Success depends on various factors including innovation, customer service, adaptability, and the ability to continuously meet market demands.

Question 19

The e-business marketspace is characterized by rapid knowledge transfer and the need for entrepreneurs to be able to make decisions quickly.

Accepted Answer

The e-business marketspace is indeed characterized by rapid knowledge transfer, necessitating that entrepreneurs make quick, informed decisions to stay competitive and adapt to market changes.

Question 20

The success of Amazon.com is partly based on the company's adaptability to changes in the marketplace.

Accepted Answer

Amazon.com has consistently demonstrated adaptability to changes in the marketplace, including expanding from an online bookstore to a comprehensive e-commerce platform, adopting new technologies, and entering various sectors like cloud computing and streaming services.

Quiz 2: Defining Your E-Business Idea