Mgmt 3850 Chapter 4 Conducting A Feasibility Analysis And Crafting A Winning Business Plan

MGMT 3850 CHAPTER 4 CONDUCTING A FEASIBILITY ANALYSIS AND CRAFTING A WINNING BUSINESS PLAN Essentials of Entrepreneurship & Small Business Mgmt., 7e (Scarborough) Chapter 4 Conducting a Feasibility Analysis and Crafting a Winning Business Plan 1) The process of determining whether an entrepreneur's idea is a viable foundation for creating a successful business is known as a: A) business plan. B) strategic analysis. C) industry analysis. D) feasibility analysis. 2) Porter's five forces model assesses industry attractiveness by surveying these five factors: A) potential entrants, suppliers, buyers, substitutes, and rivalry among existing firms. B) potential entrants, suppliers, buyers, similar products, and rivalry among existing firms. C) potential entrants, suppliers, raw materials, substitutes, and rivalry among existing firms. D) potential entrants, competitors, buyers, substitutes, and rivalry among existing firms. 3) The strongest of the five forces in most industries is: A) rivalry among companies competing in the industry. B) bargaining power of buyers. C) threat of new entrants to the industry. D) threat of substitute products or services. 4) Switching costs, the number of buyers, and if the items represent a relatively small portion of the cost of finished products are key considerations regarding the: A) threat of new entrants to the industry. B) rivalry among companies competing in the industry. C) bargaining power of suppliers. D) bargaining power of buyers. 5) Low capital requirements, cost advantages that are not related to company size, and the lack of brand loyalty are considerations regarding the: A) threat of new entrants to the industry. B) threat of substitute products. C) bargaining power of buyers. D) rivalry among companies competing in the industry. 6) Products or services that may be sought as alternative solutions-such as purchasing tax planning software rather than paying a CPA to assist with preparing your taxes-are referred to as: A) buyers products. B) rivalry products. C) substitute products. D) competitive alternatives. 7) The force from the five forces model that considers economies of scale, initial capital requirements, cost advantages relevant to company size, and lack of brand loyalty is the: A) bargaining power of suppliers. B) threat of new entrants. C) threat of substitute products or services. D) rivalry among companies competing. 8) The primary purpose of the five forces matrix is to: A) assign values to each of the five elements. B) provide a graphic. C) list the five forces in rank order. D) assess the five forces as compared to a standard value. 9) The process in which entrepreneurs test their business models on a small scale before committing serious resources to launch a business that might not work is known as: A) business modeling. B) business prototyping. C) business planning. D) product or service feasibility analysis. 10) An analysis that determines the degree to which a product or service idea appeals to potential customers and identifies the resources necessary to produce the product or provide the service is referred to as: A) product or service feasibility analysis. B) business prototyping. C) business plan analysis. D) financial feasibility analysis. 11) Conducting ________ research involves collecting data firsthand and analyzing it while ________ research involves gathering data that has already been complied and is available. A) primary; secondary B) secondary; primary C) primary; industry D) product; secondary 12) One form of primary research is: A) to review published articles. B) Internet research. C) library research. D) a focus group. 13) The financial feasibility analysis takes these aspects into consideration: A) capital requirements, human resources, and return on investment. B) capital requirements, estimated earnings, and return on investment. C) capital requirements, estimated earnings, and return on sales. D) capital requirements, estimated earnings, and return on owner's equity. 14) The final aspect of the financial feasibility analysis combines the estimated earnings and the capital requirements to determine the: A) estimated earnings. B) total capital requirements. C) net profit. D) rate of return on the capital invested. 15) The primary purpose of a business plan is to: A) attract lenders and investors. B) enable an entrepreneur to take her company public. C) guide a company by charting its future course and devising a strategy for success. D) meet SEC and other legal requirements designed to protect lenders and investors. 16) A business plan is a written summary of: A) an entrepreneur's proposed business venture. B) a business venture's operational, financial, and marketing details. C) the skills and abilities of a business venture's managers. D) All of the above