BenchPrep, the company profiled in the opening feature for Chapter 2, sells an iPhone app to help students prepare for the GMAT and other exams. The original idea for the company stemmed from the founders' recognition that if people could use their iPhones to study for the GMAT:

they wouldn't have to carry heavy study books around and they could maximize their study time by catching a few minutes of studying between meetings and on similar occasions

A(n) ________ is a favorable set of circumstances that creates a need for a new product, service, or business.

opportunity

According to the textbook, opportunities are:

tough to spot

An opportunity has four essential qualities:

attractive, timely, durable, and anchored in a product, service, or business that creates or adds value for its buyer or end user

Shelly Ford is starting a fashion boutique in an upscale mall near San Antonio. She wants to open her store during the time period in which a business like hers can realistically enter the new market. Shelly is trying to open her business while the ________ is open.

window of opportunity

The term "window of opportunity," as discussed in Chapter 2, is a metaphor that describes the time period in which a firm can:

realistically enter a new market

Which of the following is correct regarding opportunities and ideas?

It's important to discern whether a particular idea meets the criteria for an opportunity.

A(n) ________ is a favorable set of circumstances that creates the need for a new product, service, or business. A(n) ________ is a thought, an impression or a notion.

opportunity, idea

Jessica Smith is thinking about starting a chain of fitness centers for young adults ages 18-30. Which of the following is not an appropriate criteria for Jessica to test her idea against?

Determine whether a fitness center for young adults ages 18-30 meets the threshold of being a good idea.

The three ways to identify an opportunity include:

observing trends, solving a problem, and finding gaps in the marketplace

GasBuddy and GasPriceWatch.com are companies started to help consumers save money on gas. Which environmental trend is most likely to have provided the impetus for the creation of these companies?

economic forces

Economic forces impact the opportunities available to entrepreneurs. Which of the following alternatives reflects a set of economic forces that would be of interest to entrepreneurs?

interest rates, consumer spending patterns, and level of disposable income

What is not an example of a social force?

changes in interest rates

An increased focus on health and wellness has resulted in a number of new business ideas including healthier foods and beverages, yoga instruction and training centers, and nutrition consulting. An increased focus on health and wellness is an important ________ that is creating opportunities in many areas for entrepreneurial firms.

social force

The increasing number of social networks on the Internet is attributed to a jump in the number of people who are wanting to connect with one another online. The increasing number of social networks is an important:

social trend

Hulu.com allows people to watch television shows and movies on the Internet. Hulu.com's business opportunity was made possible by ________ that enhanced the ability of television shows and movies to be uploaded to the Internet and played by anyone with a suitable computer and an Internet connection.

technological advances

According to the textbook, which is the proper sequence of events in developing successful business ideas?

opportunity recognition, feasibility analysis, development of a business plan

 ________ is the process of determining whether a business idea is viable.

Feasibility analysis

Cameron Smith recently surveyed 200 of his classmates to get a sense of the demand for a new software product he is working on. Collecting data via a survey you administer yourself is referred to as:

primary research

Talking to industry experts, obtaining feedback from prospective customers, and administering surveys are examples of:

primary research

Trade journals, industry-related publications, government statistics, and competitors' Web sites are examples of:

secondary research

Jennifer Burroughs is thinking about starting a firm in the upscale women's fashion industry. To get a full appreciation of the competitive nature of the industry, and how she might position her products, Jennifer has spent considerable time looking at industry-related publications, Hoover's Online, and ABI-Inform, which is a database that provides access to articles covering a wide-variety of business and industry related issues. Jennifer is conducting:

secondary research

________ feasibility is an assessment of the overall appeal of the product or service being proposed.

Product/service

Does it make sense? Is it reasonable? Is it something consumers will get excited about? Does it take advantage of an environmental trend, solve a problem, or fill a gap in the marketplace? These are the types of questions asked during the ________ component of a complete feasibility analysis.

product/service feasibility

The two components of product/service feasibility analysis are:

product/service desirability and product/service demand

The two components of product/service feasibility analysis are product/service demand and:

product/service desirability

A(n) ________ involves showing a preliminary description of a product or service idea to prospective customers to gauge customer interest, desirability, and purchase intent.

concept test

Al Jenkins is in the process of developing an exciting new product in the smartphone industry. He'd like to show a preliminary description of the product to industry experts and prospective customers to solicit their feedback. Al should complete and distribute a(n):

concept statement

A ________ survey is an instrument that is used to gauge customer interest in a product or service.

buying intentions

A buying intentions survey is typically administered as part of ________ feasibility analysis.

product/service

A(n) ________ is a group of firms producing a similar product or service. A firm's ________ is the limited portion of the industry that it goes after or to which it wants to appeal.

industry, target market

The two components of industry/target market feasibility analysis are:

industry attractiveness and target market attractiveness

________ feasibility analysis is an assessment of the overall appeal of the industry and market for the product or service being proposed.

Industry/target market

According to the textbook, the five competitive forces included in the five-forces model determine:

the average rate of return for the firms in an industry

According to the textbook, how do well-managed firms respond to the five-forces that determine industry profitability?

They try to position their firms in a way that avoids or diminishes the forces.

In general, industries are more attractive when:

the threat of each of the five forces is low

The price of prescription medicine is high, partly because when someone is sick there is no real alternative to buying medicine if they want to get better. Which of Porter's five forces explains how this aspect of the prescription medicine industry helps keep profitability high?

threat of substitutes

Which of Porter's five forces is most closely associated with the concept "barrier to entry"?

threat of new entrants

Shelly Brunner owns a sports themed restaurant which is located in an upscale business district in Chicago. One advantage that Shelly has is that she bought the lot she built her restaurant on 25 years ago when lots in the area were selling for $50,000. Shelly knows that several potential competitors have looked at bare lots near his business but haven't been willing to pay the asking prices, which are as high as $500,000. Which of the six major sources of barriers to entry is causing a disincentive for new firms to enter Shelly's industry?

cost advantage independent of size

Some industries, like the athletic shoe industry, are dominated by a small number of firms with strong brands. These industries are difficult to break into without spending heavily on advertising. The barrier to entry that the firms in these types of industries have erected is referred to as:

product differentiation

Which of Porter's five forces is most directly influenced by the following factors: number and balance of competitors, degree of difference between products, growth rate of an industry, and level of fixed costs?

rivalry among existing firms

If a startup pioneers an industry or a new concept within an industry, the name recognition the startup establishes may create a formidable nontraditional barrier to entry referred to as a(n):

first-mover advantage

According to the example provided in Chapter 5, www.1800contacts.com possesses a nontraditional barrier to entry referred to as:

Internet domain name

Which of the following was not identified in the textbook as a nontraditional barrier to entry?

capital requirements

Supplier concentration, switching costs, attractiveness of substitutes, and threat of forward integration are factors that have a direct impact on:

bargaining power of suppliers

The five industry types discussed in the book include:

emerging, fragmented, mature, declining, and global

The primary opportunity existing for startups in emerging industries is to:

capture a first-mover advantage

Phone Halo, the company profiled in the opening feature for Chapter 14, developed a device 0that prevents people from losing their mobile phones. Which growth strategy is Phone Halo now pursuing?

Licensing

Abby Covin owns a firm that manufacturers and sells high-end furniture and home accessories. She is currently trying to grow her firm by developing new products. Abby is pursuing a(n) ________ growth strategy.

internal

New product development, other product-related strategies, and international expansion are examples of:

internal growth strategies

Internally generated growth is often called ________ growth because it does not rely on outside intervention.

organic

What is an example of an external growth strategy?

Which of the following is an advantage of internal growth strategies?

encourages internal entrepreneurship

A(n) ________ seeks to increase the sales of a product or service through greater marketing efforts or through increased production capacity and efficiency.

market penetration strategy

________ is work that is done for a company by people other than the company's full-time employees.

Outsourcing

A(n) ________ strategy involves making additional versions of a product so that it will appeal to different clientele.

product line extension

According to the textbook, international new ventures are:

businesses that, from inception, seek to derive significant competitive advantage by using their resources to sell products or services in multiple countries

________ growth strategies rely on establishing relationships with third parties, such as mergers, acquisitions, strategic alliances, joint ventures, licensing, and franchising.

External

A(n) ________ is the pooling of interests to combine two or more firms into one. A(n) ________ is the outright purchase of one firm by another.

merger, acquisition

________ is the licensing of a recognized trademark or brand that the licensor typically controls through a registered trademark or copyright.

Merchandise and character licensing