Accounting
Anthropology
Archaeology
Art History
Banking
Biology & Life Science
Business
Business Communication
Business Development
Business Ethics
Business Law
Chemistry
Communication
Computer Science
Counseling
Criminal Law
Curriculum & Instruction
Design
Earth Science
Economic
Education
Engineering
Finance
History & Theory
Humanities
Human Resource
International Business
Investments & Securities
Journalism
Law
Management
Marketing
Medicine
Medicine & Health Science
Nursing
Philosophy
Physic
Psychology
Real Estate
Science
Social Science
Sociology
Special Education
Speech
Visual Arts
Economic
Q:
Phone Halo, the company profiled in the opening feature for Chapter 14, developed a device that prevents people from losing their mobile phones. Which growth strategy is Phone Halo now pursuing?A) joint venturesB) strategic alliancesC) mergers and acquisitionsD) licensingE) international expansion
Q:
Describe what a joint venture is. Identify the two types of joint ventures.
Q:
Describe what licensing is. What type of intellectual property can be licensed? Identify the two types of licensing pursued by entrepreneurial firms.
Q:
Describe what a product line extension strategy is. What are the advantages of this strategy? Describe a company you are familiar with that utilizes a product line extension growth strategy.
Q:
Describe the internal growth strategy of new product development. Why is it a competitive necessity in some industries that entrepreneurial firms focus on this form of growth?
Q:
Explain the difference between internal and external growth strategies. Provide examples of each.
Q:
A spin-in occurs when a large company divests itself of one of its smaller divisions and the division becomes an independent company.
Q:
In a link joint venture, the position of the parties is not symmetrical, and the objectives of the partners may diverge.
Q:
In a scale joint venture, the partners collaborate at a single point in the value chain to gain economies of scale in production of distribution.
Q:
A strategic alliance is a partnership between two or more firms that is developed to achieve a specific goal and has no joint ownership involved.
Q:
Management complexities is a disadvantage of participating in strategic alliances and joint ventures.
Q:
Technology licensing is the licensing of a recognized trademark or brand that the licensor typically controls through a registered trademark or copyright.
Q:
Licensing is the granting of permission by one company to another company to use a specific form of its intellectual property under clearly defined conditions.
Q:
In regard to acquisitions, many firms have found that the process of assimilating another company into their current operations is not easy and can stretch finances to the brink.
Q:
In an acquisition, the surviving firm is called the acquirer, and the firm that is acquired is called the target.
Q:
An acquisition is the pooling of interests to combine two or more firms into one. A merger is the outright purchase of one firm by another.
Q:
External growth strategies rely on establishing relationships with third parties, such as mergers, acquisitions, strategic alliances, joint ventures, licensing, and franchising.
Q:
The majority of entrepreneurial firms first enter foreign markets via joint ventures.
Q:
Geographic expansion is most common in retail settings.
Q:
Outsourcing is work that is done for a company by people other than the company's full-time employees.
Q:
A market penetration strategy involves actions taken to increase the sales of a product or service through greater marketing efforts or through increased product capacity and efficiency.
Q:
An advantage of internal growth is that it is a rapid form of growth.
Q:
New product development is a low-risk growth strategy.
Q:
New product development involves designing, producing, and selling new products as a means of increasing firm revenues and profitability.
Q:
Internally generated growth is often called organic growth because it does not rely on outside intervention.
Q:
Internal growth strategies involve efforts taken within the firm itself, such as new product development, other product-related strategies, and international expansion.
Q:
The Partnering for Success feature in Chapter 14 is titled "Three Steps to Alliance Success." The three steps to alliance success identified in the feature are:A) drafting a licensing agreement, setting up a governance structure, and making it workB) selecting a partner, cutting the deal, and making it workC) interviewing potential partners, cutting the deal, and supervising the implementation of the agreementD) drafting a licensing agreement, cutting the deal, and setting up a governance structureE) selecting an alliance "manager," setting up a governance structure, and making it work
Q:
In the context of strategic alliances, ________ typically match a company with a distribution system with a company that has a product to sell to increase sales of a product or service.
A) promotion alliances
B) marketing alliances
C) organizational alliances
D) directional alliances
E) technological alliances
Q:
In the context of strategic alliances, ________ feature cooperation in research and development, engineering, and manufacturing.
A) administrative alliances
B) directorial alliances
C) marketing alliances
D) organizational alliances
E) technological alliances
Q:
Which of the following was identified in the textbook as a disadvantage of participating in strategic alliances and joint ventures?
A) risk and cost sharing
B) economies of scale
C) partners' cultures may clash
D) gain access to a foreign market
E) learning
Q:
Which of the following was identified in the textbook as an advantage of participating in strategic alliances and joint ventures?
A) risk and cost sharing
B) loss of organizational flexibility
C) partners' cultures may clash
D) risk becoming dependent on a partner
E) loss of proprietary information
Q:
A ________ is a partnership between two or more firms that is developed to achieve a specific goal, and has no joint ownership involved.
A) joint alliances
B) joint venture
C) licensing agreement
D) merger
E) strategic alliance
Q:
According to the textbook, the key to effective merchandise and character licensing is:
A) get licensing income monthly rather than yearly
B) resist the temptation to license a trademark too widely
C) licensing a trademark very widely
D) restrict licensing agreements to one year
E) restrict licensing to product categories that have no relevance and appeal to a firm's core customers
Q:
Paul Kite owns a chain of ice cream stores in New England. To draw attention to his stores, he adopted a very colorful and distinctive logo several years ago, which depicts a funny-looking cow churning ice cream. Recently, a dairy company asked Paul if it could use a characterization of his funny-looking cow on a line of yogurt it is coming out with, and offered to pay Paul's company 3 cents for every carton of yogurt it sells that has the cow's image on the carton. If Paul accepts this proposal, he will need to enter into a(n) ________ agreement with the dairy.
A) licensing
B) joint venture
C) strategic alliance
D) new product development
E) exporting
Q:
Merchandise and character licensing is the licensing of a recognized trademark or brand that the licensor typically controls through a registered:A) trade secret or copyrightB) patent or copyrightC) trademark or patentD) patent or trade secretE) trademark or copyright
Q:
________ is the licensing of a recognized trademark or brand that the licensor typically controls through a registered trademark or copyright.A) Goods and character licensingB) Products and trademark licensingC) Products and brand licensingD) Merchandise and character licensingE) Products and services licensing
Q:
Qualcomm, a high-tech company headquartered in San Diego, owns the rights to several of the key components that permit cell phones to work. Instead of selling cell phones itself, Qualcomm grants permission to many companies, such as Samsung and LG, to use specific forms of its intellectual property in exchange for monetary compensation. Qualcomm in engaging in an external growth strategy referred to as:
A) licensing
B) strategic alliances
C) acquisitions
D) new product development
E) joint ventures
Q:
________ licensing is the licensing of proprietary technology that the licensor typically controls by virtue of a utility patent.
A) Skill
B) Intellectual property
C) Utility
D) Technology
E) Expertise
Q:
The ________ is the company that owns the intellectual property. The ________ is the company purchasing the right to use it.
A) endorsee, endorser
B) licensor, licensee
C) licensor, endorsee
D) endorser, endorsee
E) licensee, licensor
Q:
The granting of permission by one company to another company to use a specific form of its intellectual property under clearly defined conditions is referred to as:
A) verifying
B) confirming
C) endorsing
D) licensing
E) certifying
Q:
The What Went Wrong? feature in Chapter 15 focuses on StumbleUpon, an Internet startup which sold itself to eBay for $75 million. Surprisingly, just two years after eBay bought StumbleUpon:A) it licensed the technology underlying StumbleUpon's unique method of finding Web sites to YahooB) it changed StumbleUpon's name to "eBay Surprise"C) it sold it to Google for $95 millionD) it closed StumbleUpon and retired its nameE) its founder and a group of investors bought it back
Q:
In an acquisition, the surviving firm is called the ________, and the firm that is acquired is called the ________.
A) target, acquirer
B) goal, objective
C) objective, aggressor
D) acquirer, target
E) aggressor, objective
Q:
What are the primary day-to-day challenges involved with growing a firm? Briefly describe each challenge.
Q:
What is the organizational life cycle and why is it important?
Q:
Define the term "market leadership." Why do firms work hard to obtain market leadership?
Q:
According to Chapter 13, business success doesn't always scale. What is meant by this statement?
Q:
Do most firms want to grow or are they reluctant to grow? What are the advantages of growth?
Q:
Most businesses need capital from time to time to invest in growth-enabling projects.
Q:
One of the most difficult challenges that businesses encounter as they grow is maintaining high levels of quality and customer service.
Q:
Growth usually decreases rather than increases the challenges involved with cash flow management.
Q:
Moral hazard means that as a firm grows and adds personnel, the new hires typically do not have the same ownership incentives as the original founders, so the new hires may not be as motivated as the founders to put in long hours or may even try to avoid hard work.
Q:
Adverse selection means that as the number of employees a firm needs increases, it becomes increasingly difficult for it to find the right employees, place them in appropriate positions, and provide adequate supervision.
Q:
According to Penrose, entrepreneurial services generate new market, product, and service ideas.
Q:
According to Penrose, managerial services generate new market, product, and service ideas, while entrepreneurial services administer the routine functions of the firm and facilitate the proper execution of new opportunities.
Q:
As a business moves beyond its early growth stage and its pace of growth accelerates, the need for structure and formalization decreases.
Q:
A business's early growth stage is generally characterized by increasing sales and heightened complexity.
Q:
The main challenges for a business in the early growth stage are to make sure the initial product or service is right and to start laying the groundwork for building a larger organization.
Q:
The majority of businesses go through a discernable set of stages referred to as the organizational life cycle.
Q:
Sometimes firms are compelled to grow to accommodate the growth of a key customer.
Q:
Market leadership occurs when a firm is one of the top ten firms in an industry or niche market in terms of sales volume.
Q:
Variable costs are the costs a company incurs as it generates sales.
Q:
Economies of scope are generated when increasing production lowers the average cost of each unit produced.
Q:
The process of writing a business plan greatly assists in developing growth-related plans.
Q:
Business success doesn't always scale.
Q:
All businesses have the potential to be aggressive growth firms.
Q:
Most entrepreneurial firms try to grow and see it as an important part of their ability to remain successful.
Q:
Sustained growth is defined as growth in both revenues and employees over an extended period of time.
Q:
Kelly Andrews owns a company that makes office furniture. Recently, a favorable article was written about Kelly's company in a business magazine, and as a result, Kelly has seen a spike in his orders. Although Kelly is grateful for the additional orders, he is worried about one thing. An increase in activity means that his firm must handle more service requests and paperwork and contend with more customers, stakeholders, and vendors. Kelly knows that if he doesn't handle this increased activity properly, the workmanship of his products could decline. The day-to-day challenge of firm growth that this example illustrates is:
A) quality control
B) price stability
C) capital constraints
D) benchmarking
E) cash flow management
Q:
Betty Harrington owns a floor covering firm. Her market research is telling her that she is taking business away from the large home improvement stores in her trade area. One thing that Betty is worried about is that the large stores might fight back by lowering their prices, which hurts everyone except the consumer. The day-to-day challenge of firm growth that this example is referring to is:
A) quality control
B) price stability
C) capital constraints
D) cash flow management
E) benchmarking
Q:
The What Went Wrong feature in Chapter 13 focuses on Wesabe, a Web-based company that was launched in 2006 to help people manage their personal finances. According to Marc Hedlund, one of Wesabe's cofounders, the company failed for two primary reasons. First, it misunderstood its users. Second:A) it didn't allow a partner to provide it with an essential service that it decided to build on its ownB) it didn't achieve a large enough critical mass of usersC) it didn't implement a revenue model fast enoughD) it didn't utilize both internal and external growth strategiesE) it didn't hire an experienced CEO
Q:
Terry Wells owns a growing company that makes innovative kitchen appliances. One thing that Terry has to continually work at is to keep enough cash on hand to make sure she has sufficient liquidity to meet her payroll and cover her other short-term obligations. The day-to-day challenge of firm growth this example is referring to is:
A) quality control
B) capital constraints
C) price stability
D) cash flow management
E) personnel issues
Q:
Which of the following statements is not true regarding the day-to-day challenges of growing a firm?
A) As a firm grows, it requires a decreasing amount of cash to service its customers.
B) If firm growth comes at the expense of a competitor's market share, price competition can set in.
C) Most businesses, regardless of their industry, need capital from time to time to invest in growth-enabling projects.
D) Although most businesses are started fairly inexpensively, the need for capital is typically the most prevalent in the early growth and continuous stages of the organizational life cycle.
E) One of the most difficult challenges that businesses encounter as they grow is maintaining high levels of quality and customer service.
Q:
Which of the following was not identified in the textbook as one of the day-to-day challenges involved with growing a firm?
A) cash flow management
B) channel conflict
C) capital constraints
D) quality control
E) price stability
Q:
According to the basic model of firm growth articulated in Chapter 13, the ability to increase managerial services to facilitate growth is not friction free but is constrained and limited. Which of the following selections is not one of the factors that constrains or limits a firm's ability to increase its managerial services?A) the time required to socialize new managersB) how motivated entrepreneurs and/or managers are to grow the firmC) adverse selectionD) moral hazardE) benchmarking
Q:
________ means that as a firm grows and adds personnel, the new hires typically do not have the same ownership incentives as the original founders, so the new hires may not be as motivated as the founders to put in long hours or may even try to avoid hard work.
A) Difficult selection
B) Adverse hazard
C) Ethical selection
D) Productivity hazard
E) Moral hazard
Q:
________ means that as the number of employees a firm needs increases, it becomes increasingly difficult for it to find the right employees, place them in appropriate positions, and provide adequate supervision.
A) Moral hazard
B) Adverse selection
C) Adverse hazard
D) Complex hazard
E) Complex selection
Q:
Kendell Adams owns a software development company. When he first launched his firm, he was careful to hire employees who had the experience he was looking for, were good matches for the positions he had available, and could be properly supervised. As Kendell's firm has grown, and his need for employees has increased, he is finding that it is increasingly difficult to find employees who have the qualifications he is looking for, are good matches for the positions he has available, and fit within the supervisory framework he has developed. Kendell is dealing with an issue referred to as:
A) adverse hazard
B) adverse selection
C) complicated hazard
D) ethical hazard
E) moral selection
Q:
________ means that as the number of employees a firm needs increases, it becomes increasingly difficult for it to find the right employees, place them in appropriate positions, and provide adequate supervision.
A) Difficult hazard
B) Adverse hazard
C) Adverse selection
D) Moral selection
E) Moral hazard
Q:
Emily Wills owns a commercial printing company. Emily has more business than she wants, in fact, she is presently turning away exciting new business opportunities because it is expensive to hire new employees, and she knows that if she did hire new employees it would take time for the new employees to be trained and to be socialized into the culture of her firm. Emily's inability to take advantage of the new business opportunities that are coming her way is due largely to the:
A) business aptitude problem
B) entrepreneurial aptitude problem
C) commercial opportunity problem
D) business capacity problem
E) managerial capacity problem
Q:
When a firm's managerial resources are insufficient to take advantage of its new product and service opportunities, the subsequent bottleneck is referred to as the:
A) commercial capacity problem
B) entrepreneurial aptitude problem
C) managerial capacity problem
D) business capacity problem
E) business aptitude problem