A board of directors is typically made up of both ________ and ________ directors.

rectly or as a partner, shareholder or officer of an organization that has a relationshipwith the company.The role of professional advisors:-Board of advisors-Lenders and investors-Other professionalsBoard of advisors:-A board of advisors is a panel of experts who are asked by a firm’s managers to providecounsel and advice on an ongoing basis.-Unlike a board of directors, an advisory board possesses no legal responsibility for thefirm and gives nonbinding advice.-An advisory board can be established for general purposes or can be set up to address aspecific issue or need.-Many people are more willing to serve on a company’s board of advisors than its boardof directors because it requires less time and there is no potential legal liability involved.-Like the members of a board of directors, the members of a company’s board of advi-sors provide guidance and lend credibility to the firm.Guidelines to organizing a board of advisors:-Advisors will become disillusioned if they don’t play a meaningful role in the firm’s de-velopment and growth.-A firm should look for board members who are compatible and complement one an-other in terms of experience and expertise.-When inviting people to serve on its board of advisors, a company should carefully spellout to individuals involved the rules in terms of access to confidential information.Lenders and investors:Lenders and investors have a vested interest in the companies they finance, often caus-ing them to become very involved in helping the firms they fund.-Like the other non-employee members of a firms new-venture team, lenders and in-vestors help new firms by providing guidance and lending advice.-In addition, a firm’s lenders and investors assume the natural role of providing financialoversight.Ways lenders and investors add value to an entrepreneurial firm:-Recruit customers-Serve on the board of directors or board of advisors-Help arrange business partnerships-Provide a sense of stability and calm.-Help identify and recruit key management personnel.

According to the Global Entrepreneurship Monitor (GEM) 2010 survey, about ________ of adults in the United States are either starting a business or are running a business that has been in existence for less than 3 1/2 years.

Apple Inc. is a firm that is proactive, innovative and risk-taking. From this description, we can most accurately conclude that Apple has a high level of:

entrepreneurial intensity

Netflix is an established firm that encourages and emphasizes entrepreneurial behavior throughout its various divisions. According to the textbook, Netflix practices:

corporate entrepreneurship

The three primary reasons that people become entrepreneurs and start their own firms are to:

be their own boss, pursue their own ideas, and realize financial rewards

According to the textbook, the number one reason that people become entrepreneurs is to:

According to the textbook, the four characteristics of successful entrepreneurs are:

passion for the business, tenacity despite failure, product/customer focus, and execution intelligence

The number one characteristic shared by successful entrepreneurs is:

According to the textbook, entrepreneurs are:

According to the textbook, there are three types of startup firms:

lifestyle firms, salary-substitute firms, and entrepreneurial firms

Among minorities, ________ -owned firms had the highest growth rate from 1996 to 2010.

________ is the process of creating something new, which is central to the entrepreneurial process.

Which of the following is the correct sequence for the four steps in the entrepreneurial process?

deciding to become an entrepreneur, developing successful business ideas, moving from an idea to an entrepreneurial firm, managing the growing entrepreneurial firm

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

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

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.

The three ways to identify an opportunity include:

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

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

A common way that gaps in the marketplace are recognized is:

when people become frustrated because they can't find a product or service that they need and recognize that other people feel the same way

The ability to notice things without engaging in deliberate search is referred to as:

entrepreneurial alertness

A network entrepreneur is an individual who identifies his or her business idea:

Most of Jacob's ideas come from interacting with coworkers, friends, his spouse, his parents, and other people that share the same beliefs that he does. Jacob is getting most of his ideas through:

________ is the process of generating a novel or useful idea.

________ is (are) used to generate a number of ideas quickly.

According to the textbook, a focus group is a gathering of 5 to 10 people who are selected because:

of their relationship to the issue being discussed

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

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

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:

Which of the following is not one of the four areas of feasibility analysis discussed in the textbook?

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

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

Sam Willis is distributing an instrument, which includes a concept statement with a short survey attached, to try to gauge customer interest in a product he is developing. Sam is distributing a:

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

industry attractiveness and target market attractiveness

Which of the following issues should be considered in industry/target market feasibility analysis?

A ________ market is a place within a larger market segment that represents a narrower group of customers with similar needs.

________ is conducted to determine whether a proposed business has sufficient management expertise, organizational competence, and resources to successfully launch its business.

Organizational feasibility analysis

A(n) ________ is the group of founders, key employees, and advisers that either manage or help manage a new business in its startup years.

________ is a quick financial assessment of the viability of a business idea.

Financial feasibility analysis

According to the textbook, a business plan is best described as a(n):

narrative description of a new business

A business plan is important for two reasons: it forces the founding team to systematically think through every aspect of their new venture and:

it communicates the merits of a new venture to outsiders, such as investors and bankers

Which of the following is one of the "red flags" listed in the textbook that raises questions about one or more aspects of a company's business plan?

defining the market size too broadly

For most business plans ________ pages are sufficient.

There are three types of business plans:

summary business plan, full business plan, operational business plan

Zachery Mays is in the very early stages of putting together a business startup, and is thinking about writing a business plan to request funds to conduct a feasibility analysis and write a more complete business plan. What type of business plan should Zachery write at this point?

A(n) ________, which is typically 25 to 35 pages long, works best for new ventures who are at the point where they need funding or financing.

A(n) ________, which is intended to be a blueprint for a company's operations, is 40-100 pages long and is meant primarily for an internal audience.

operational business plan

A company's mission statement should be placed in the ________ section of its business plan.

The ________ section of a business plan breaks the industry into segments and zeroes in on the specific segment (or target market) to which the firm will try to appeal.

The ________ section of the business plan addresses the basic logic of how profits are earned in the business.

Economics of the Business

the first physical depiction of a new product

What section of the business plan deals with the day-to-day operations of a company?

Jeremy Banks recently started a new firm in the financial services industry. Prior to starting his firm, he spent considerable time doing research on the potential of the industry. The research that Jeremy was doing is called:

A(n) ________ is a group of firms producing a similar product or service, such as soft drinks, electronic games, or computers.

Once a firm decides to enter an industry and chooses a market in which to compete, it must gain an understanding of its competitive environment. This challenge can be undertaken by completing a(n):

Industries that sell products to seniors, such as the eyeglass industry and the hearing aid industry, are benefiting from the aging of the population, which is an important:

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.

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

John Petersen is thinking about starting a firm in the specialty chemical industry. In the industry analysis John has been conducting, one thing he has noticed is that the specialty chemical industry is characterized by the following factors: high supplier concentration, high switching costs for buyers when they switch from one supplier to another, and no attractive substitutes for the products that most of the suppliers provide. These factors concern John because they tell him that the profitability of the specialty chemical industry is suppressed by the:

bargaining power of suppliers

Windspire is starting a firm in the small-scale wind-generated power industry. This industry is still so new that no standard operating procedures have been developed. Small-scale wind-generated power is an example of a(n) ________ industry.

A(n) ________ industry is an industry that is experiencing slow or no increase in demand.

A(n) ________ industry is an industry that is experiencing significant international sales.

According to the textbook, the first step in a competitor analysis is to:

determine who the competition is

According to the textbook, the three different types of competitors a business will face are:

direct, indirect, and future

The information that is gathered by a firm to learn about its competitors is referred to as:

Catherine Smith has just finished writing a business plan for a startup in the medical products industry. She has now reached the point where she needs to develop a plan for how her firm will compete, use its resources, structure its relationships, interface with customers, and create value to sustain itself on the basis of the profits it earns. Jennifer needs to establish her firm's:

The ________ is the string of activities that moves a product from the raw material stage, through manufacturing and distribution, and ultimately to the end user.

According to the textbook, by studying a product's or service's value chain an organization can:

identify ways to create additional value and assess whether it has the means to do so

________ involves a firm's relationship with its suppliers and involves all the activities of receiving, storing, and shipping component parts to the place where they will be added to the final product.

________ involves all the activities required to manufacture a product.

Which of the following is not one of the components of a firm's business model?

A firm's ________ describes why it exists and what its business model is supposed to accomplish.

"Organize all the world's information and make it universally accessible and useful" is Google's:

From a broad perspective, firms choose one of two generic strategies to position themselves in the marketplace. These are:

cost leadership and differentiation

A ________ is a resource or capability that serves as a source of a firm's competitive advantage over its rivals.

An arrangement between two or more firms that establishes an exchange relationship but has no joint ownership involved is called a:

Organizations (typically nonprofit) that are formed by firms in the same industry to collect and disseminate trade information, offer legal and technical advice, furnish industry-related training, and provide a platform for collective lobbying are called:

A firm's ________ is the limited group of individuals or businesses that it goes after or tries to appeal to.

According to the textbook, the single most important thing the founders of an entrepreneurial venture can do is:

establish a strong ethical culture for their firms

Which of the following is the most important thing that an entrepreneur, or team of entrepreneurs, can do to build a strong ethical culture in their organization?

A ________ is a formal statement of an organization's values on certain ethical and social issues.

Trevor Parsons just took a job with Twitter. As part of his employment contract, Trevor signed an agreement that states that he will not disclose any of Twitter's trade secrets. The agreement that Trevor signed is called a(n):

A situation that involves doing something that is beneficial to oneself or the organization, but may be unethical, is called a(n):

________ is the process in which an impartial third party helps those involved in a dispute reach an agreement.

Rachael James just took a job with IKEA. As part of her employment agreement, IKEA required Rachael to sign an agreement, which states that if she leaves IKEA, she will not work for a firm that competes against IKEA for at least two years. The agreement that Rachael signed is called a

Which of the following is not one of the four factors identified in the textbook as critical in selecting a form of business ownership?

accounting considerations

All of the following are advantages of a sole proprietorship except:

A(n) ________ details the responsibilities and the ownership shares of the partners involved with an organization.

A separate legal entity organized under the authority of a state is referred to as a:

Large firms like 3M, Google, Oracle, and Microsoft, that trade on organized stock exchanges, are:

Which of the following is an advantage of a C Corporation?

Stock is liquid if traded on a major stock exchange.

Financial management deals with two things—managing a company's finances and:

Which of the following was not identified as one of the four main financial objectives of a firm?

________ is a company's ability to meet its short-term financial obligations.

A company's ability to productively utilize its assets relative to its revenue and its profits is referred to as:

Southwest Airlines uses its assets very productively. Its turnaround time, or the time that its airplanes sit on the ground while they are being loaded and unloaded, is the lowest in the airline industry. In terms of the primary financial objectives of a firm, this attribute is a measure of Southwest's:

________ are an estimate of a firm's future income and expenses, based on its past performance, its current circumstances, and its future plans.

________ depict relationships between items on a firm's financial statements.

A firm's ________ reflects the results of its operations over a specified period and shows whether it is making a profit or is experiencing a loss.

A(n) ________ is a snapshot of a company's assets, liabilities, and owners' equity at a specific point in time.

A firm's ________ is its current assets divided by its current debt.

According to the textbook, the most practical way to interpret or make sense of a firm's historical financial statements is through:

Savanna Combs opened a clothing boutique two years ago. Unfortunately, the boutique failed after 18 months. Savanna attributes the failure of her boutique to the facts that her employees couldn't adjust quickly enough to their new roles and that her boutique lacked a "track record" with outside buyers and sellers, which made it difficult to form partnerships and make sales. Savanna suffered from what research calls the:

The members of heterogeneous teams are:

diverse in terms of their abilities and experiences

According to the textbook, prior entrepreneurial experiences:

is one of the most consistent predictors of future entrepreneurial performance

The process of building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to the firm is called:

Ned Kite is a four time business owner. One thing that has served Ned well throughout his entrepreneurial career is his ability to build and maintain relationships with people whose interests are similar or whose relationships could bring advantages to his new ventures. According to the textbook, Ned is a good:

A(n) ________ is a chart that depicts the most important skills that are needed in a new venture and where skills gaps exist.

A board of directors is typically made up of both:

inside and outside directors

The panel of individuals who are elected by a corporation's shareholders to oversee the management of the firm is called the:

In the context of boards of directors, a(n) ________ is someone who is not employed by the firm.

James Williams is the Chief Operating Officer of a startup in the health food industry. He is also a member of his firm's board of directors. In board of directors terminology, James is a(n):

A board of directors has three formal responsibilities: appoint the officers of the firm, declare dividends, and:

oversee the affairs of the corporation

According to the textbook, although a board of directors has formal governance responsibilities, its most useful role is to:

provide guidance and support to the firm's managers

A(n) ________ is a panel of experts who are asked by a firm's managers to provide counsel and advice on an ongoing basis.

William Woods recently launched a printing company. One thing William is thinking about creating is a panel of experts who can provide him ongoing direction and advice regarding the future of his business. William is thinking about creating a(n):

According to the textbook, most boards of advisers have between:

Which of the following is incorrect regarding the typical role of consultants in business startups?

help manage the day-to-day activities of the firm

Kimberly Jones is the founder of a company in the medical equipment industry. Kimberly's firm is still in the feasibility analysis stage and doesn't have a product that is ready to sell. The company is spending about $25,000 per month and expects to maintain that level of spending until it reaches profitability. The $25,000 a month is Kimberly's:

The three reasons startups need funding are:

cash flow challenges, capital investments, and lengthy product development cycles

For startup firms, the cost of buying real estate, building facilities, and purchasing equipment often exceeds the firm's ability to provide funds for those needs on its own. Which of the following reasons that motivate firms to seek funding or financing is illustrated in this example?

Peter Simmons owns an electronic games company. Although Peter's game designers and programmers are very good, it takes 2-3 years to develop a good electronic game. This example illustrates the need for funding or financing referred to as:

lengthy product development cycles

According to the textbook, beyond their own funds, the second source of funds for many new ventures is:

Amy Clark just opened a soup and salad restaurant near Golden Gate Park in San Francisco. Rather than borrow money or raise funds from investors, Amy used her creativity and ingenuity and figured out how to get her business up and running without the need for external funding. Amy is utilizing a technique referred to as:

Equity financing (or funding) means:

exchanging partial ownership in a firm, usually in the form of stock, for funding

Equity investors typically have a ________ investment horizon.

A brief carefully constructed statement that outlines the merits of a business opportunity is called a(n):

According to the textbook, the unique value provided by business angels is:

they are willing to make relatively small investments

An important part of obtaining venture capital funding is going through ________, which refers to the process of investigating the merits of a potential venture and verifying the key claims made by the business plan.

The first sale of stock by a firm to the public is referred to as a(n):

getting a loan or selling corporate bonds

Historically, commercial banks:

have not been a good source of funds for startup firms

________ is a financial transaction whereby a business sells its accounts receivable to a third party at a discount in exchange for cash.

A(n) ________ is a written agreement in which the owner of a piece of property allows an individual or business to use the property for a specified period of time in exchange for payments.

The major advantage of leasing is that:

it enables a company to acquire the use of assets with little or no down payment

Andy Sanders owns a sporting goods store that appeals to hunters and fishermen. The market that Andy is trying to appeal to is called his:

The first step in selecting a target market is to study the industry in which the firm intends to compete and determine the different potential target markets in that industry. This process is called:

A ________ is a place within a market segment that represents a narrower group of customers with similar interests.

A(n) ________ is the set of attributes—positive or negative—that people associate with a company.

According to the textbook, a brand is all of the following except:

________ is a term that denotes the set of assets and liabilities that are linked to a brand and enable it to raise a firm's valuation.

A firm's ________ is the set of controllable, tactical marketing tools that it uses to produce the response it wants in the target market.

A firm's marketing mix consists of the following four elements:

product, price, promotion, and place

A firm's ________, in the context of its marketing mix, is the good or service it offers to its target market.

A ________ is something that takes on a physical form, such as an MP3 player or a laptop computer. A ________ is an activity or benefit that is intangible, such as an airplane trip or advice from an attorney.

Which element of the marketing mix is the only one that produces revenue?

According to the textbook, most experts recommend ________ pricing because it hinges on the perceived value of a product or service.

________ refers to the activities the firm takes to communicate the merits of its product to its target market.

Efforts to establish and maintain a company's image with the public are referred to as:

Every year thousands of electronic products manufacturers gather in Las Vegas to display their products and to see what their competitors are up to. This type of event is called a:

Twitter, Facebook and company blogs are examples of:

A(n) ________ is a route a product takes from the place it is made to the customer who is the end user.

Can a board of directors lend legitimacy to a new venture?

Is a panel of experts who are asked by a firms managers to provide counsel and advice on an ongoing basis?

Is a chart that depicts the most important skills that are needed and where skills gaps exist?

What is liability of newness quizlet?