Question 1

Business incubators aid in the development of start-ups.

Accepted Answer

Business incubators provide resources, mentorship, and networking opportunities to help start-ups grow and succeed.

Question 2

Small businesses have a high success rate.

Accepted Answer

The statement is false. Small businesses actually have a high failure rate, with around 20% failing within their first year and around 50% failing within their first five years.

Question 3

In the birth stage of the life cycle of entrepreneurial firms, the entrepreneur struggles to get the new venture established and to survive long enough to test the viability of the underlying business model in the marketplace.

Accepted Answer

In the birth stage, the primary focus is on establishing the new venture and surviving long enough to test the viability of the business model in the marketplace.

Question 4

Activities that focus on refining the strategy, continuing growth, and managing for success occur in the growth stage of the life cycle of entrepreneurial firms.

Accepted Answer

The answer of Activities that focus on refining the strategy,...

Question 5

Activities that focus on working on finances, becoming profitable and growing occur in the birth stage of the life cycle of entrepreneurial firms.

Accepted Answer

Activities that focus on working on finances, becoming profitable and growing occur in the growth stage of the life cycle of entrepreneurial firms. In the birth stage, the focus is on developing the business idea, testing it in the market, and securing initial funding.

Question 6

At the breakthrough stage of the life cycle of entrepreneurial firms, the management challenge is one of investing wisely and staying flexible.

Accepted Answer

The answer of At the breakthrough stage of the life...

Question 7

A succession plan describes the direction for a new business and the financing needed to operate it.

Accepted Answer

A succession plan outlines the future leadership and ownership of a business, including how it will be handed over to the next generation or new owners. It may include financial considerations, but its primary focus is on management and ownership transfer.

Question 8

In the maturity stage of the life cycle of entrepreneurial firms, the entrepreneur experiences the advantages of market success and financial stability, while also facing continuing challenges of meeting the needs for professional management skills.

Accepted Answer

In the maturity stage, the entrepreneurial firm experiences benefits such as market success and financial stability, but also faces challenges in terms of professional management skills.

Question 9

At the breakthrough stage of the life cycle of entrepreneurial firms, the business model begins to work well, growth is experienced, and the complexity of managing the business operation expands significantly.

Accepted Answer

The breakthrough stage is characterized by successful business model implementation, growth, and increased complexity in managing operations.

Question 10

The life cycle of entrepreneurial firms poses different management challenges at each stage and requires different management competencies at each stage.

Accepted Answer

This statement is true. The different stages of the entrepreneurial firm life cycle include the idea generation stage, start-up stage, growth stage, maturity stage, and exit stage. Each stage poses unique challenges and requires different management skills and competencies to navigate successfully.

Question 11

The life cycle of an entrepreneurial firm begins with the breakthrough stage.

Accepted Answer

The life cycle of an entrepreneurial firm begins with the seed stage, followed by the startup stage, growth stage, maturity stage, and declining stage. The breakthrough stage may occur during the growth stage.

Question 12

A first-mover advantage comes from being first within the industry to outsource non-core business activities or to embrace social responsibility.

Accepted Answer

First-mover advantage refers to the benefits a company gains by being the first to enter a new market or develop a new product or service, not specifically from outsourcing or embracing social responsibility.

Question 13

Activities that focus on establishing the business, getting customers, and finding financing occur in the breakthrough stage of the life cycle of entrepreneurial firms.

Accepted Answer

These activities typically occur in the startup stage of the life cycle of entrepreneurial firms, where the focus is on launching the business, attracting customers, and securing initial financing. The breakthrough stage usually involves growth and expansion after the initial establishment.

Question 14

The breakthrough stage involves establishing the firm and fighting for its existence.

Accepted Answer

The breakthrough stage involves rapid growth and expansion, not the initial establishment and survival of the firm. This stage comes after the firm has already been established and has survived the early challenges.

Question 15

At the maturity stage of the life cycle of entrepreneurial firms, the management challenge is one of coping with growth and takeoff.

Accepted Answer

At the maturity stage, the challenge is maintaining and managing growth, not coping with growth and takeoff, which are challenges faced during the growth stage.

Question 16

At the birth stage of the life cycle of entrepreneurial firms, the management challenge is one of fighting for existence and survival.

Accepted Answer

At the birth stage, entrepreneurial firms face a high risk of failure and must work to establish themselves and gain a foothold in the market. Management must focus on survival and overcoming obstacles in order to progress to the next stages of growth.

Question 17

A first-mover advantage occurs by exploiting a niche or entering a market before competitors.

Accepted Answer

The answer of A first-mover advantage occurs by exploiting a...

Question 18

Self-management is an ability to use objective understanding of personal strengths and weaknesses to keep growing-individually and career-wise.

Accepted Answer

Self-management involves recognizing one's strengths and weaknesses and using that understanding to continue personal and career growth.

Question 19

The entrepreneur's ability to identify a market niche that is being missed by other established firms or to identify a new market that has not yet been discovered by existing firms are important avenues of new venture creation.

Accepted Answer

Identifying a market niche or a new market is a common strategy for entrepreneurs to create new ventures that can succeed in an untapped or underserved market. This can be a key source of competitive advantage for new businesses that are able to meet the unique needs of a specific customer base.

Question 20

To stay customer focused, a new venture should effectively address questions such as: Who is your customer? How will you price your product or service for the customer? How much does it cost to attract a customer? How much does it cost to support and retain a customer?

Accepted Answer

These are all important questions that a new venture should answer in order to prioritize and cater to the needs and wants of their target customers. Pricing, customer acquisition cost, and customer retention cost are key factors in achieving sustainable profitability and growth.

Quiz 6: Entrepreneurship and New Ventures