Business Development
Midterm Exam
Course Introduction
Business Development explores the strategies, processes, and skills required to create and sustain growth opportunities in organizations. The course covers identifying new markets, building and maintaining strategic partnerships, designing effective sales and marketing initiatives, and leveraging innovation to gain a competitive advantage. Students will learn to analyze industry trends, assess customer needs, and develop actionable business plans that align with organizational goals. Emphasis is placed on negotiation, networking, and effective communication as critical components of the business development role, preparing students to drive business expansion in various sectors.
Recommended Textbook
Entrepreneurship Successfully Launching New Ventures 3rd Edition by Bruce R. Barringer
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15 Chapters
1125 Verified Questions
1125 Flashcards
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Page 2
Chapter 1: Introduction to Entrepreneurship
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Sample Questions
Q1) Which of the following statements regarding business success (or failure) rates is correct?
A) 9 out of 10 businesses fail within the first four years.
B) After four years, 50 percent of new businesses are still open.
C) After four years, 25 percent of new businesses are still open.
D) 2 out of 3 businesses fail within the first four years.
E) After four years, 10 percent of new businesses are still open.
Answer: B
Q2) Katherine Frans just received an inheritance of $50,000 from her grandmother. She has decided to use the money to start a business that she has always been interested in starting. For Katherine, the $50,000 inheritance represents a ________ that prompted her to start a business.
A) lifestyle event
B) threshold event
C) initiative event
D) milestone event
E) triggering event
Answer: E
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Chapter 2: Recognizing Opportunities and Generating Ideas
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Sample Questions
Q1) Frank Patterson started a firm in 2008 that creates and manufactures accessories for Harley-Davidson motorcycles. He started with four accessories, and after several months added three new accessories that have been very successful. The fact that Frank recognized the opportunity for the three new accessories only after he started his firm and become immersed in the motorcycle industry is an example of the ________ at work.
A) opportunity tenet
B) opportunity rule
C) chance rule
D) access principle
E) corridor principle
Answer: E
Q2) Elaboration is the stage of the creative process when the solution to a problem is seen or an idea is born.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Feasibility Analysis
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Sample Questions
Q1) The most important issues to consider in financial feasibility analysis are:
A) resource sufficiency, industry attractiveness, and total start-up cash needed
B) total start-up cash needed, financial performance of similar businesses, and the overall financial attractiveness of the proposed venture
C) target market attractiveness, resource sufficiency, and product/service demand
D) total start-up cash needed, management prowess, and product/service demand
E) concept testing, total start-up cash needed, and financial performance of similar businesses
Answer: B
Q2) The focus in organizational feasibility analysis is on financial resources.
A)True
B)False
Answer: False
Q3) Primary research is research that is collected by the person or persons completing the analysis.
A)True
B)False
Answer: True
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Chapter 4: Writing a Business Plan
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Sample Questions
Q1) What section of the business plan deals with the day-to-day operations of a company?
A) financial plan
B) marketing plan
C) operations plan
D) industry analysis
E) executive summary
Q2) Most business plan writers interpret or make sense of a firm's historical and/or pro form financial statements through:
A) ratio analysis
B) assumptions analysis
C) scenario analysis
D) proportion analysis
E) relative analysis
Q3) Experienced entrepreneurs often refer to business plans as "living, breathing documents." What is meant by this characterization of business plans?
Q4) A business plan can usually be completed in one to three days.
A)True
B)False
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Chapter 5: Industry and Competitor Analysis
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Sample Questions
Q1) If a start-up pioneers an industry or a new concept within an industry, the name recognition the start-up establishes may create a formidable nontraditional barrier to entry referred to as a:
A) unique business model
B) aggressive supremacy
C) competitive superiority
D) first-mover advantage
E) aggressive tactical advantage
Q2) A fragmented industry is one that is characterized by a small number of firms or approximately equal size.
A)True
B)False
Q3) Which of the following is not one of the major sources of barriers to entry?
A) economies of scale
B) cost advantages independent of size
C) buyer group concentration
D) access to distribution channels
E) government and legal barriers
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7
Chapter 6: Developing an Effective Business Model
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Sample Questions
Q1) Historically, it has been difficult for a new venture to use a cost leadership strategy.
A)True
B)False
Q2) A hub and wheel configuration with a local firm at the hub organizing the interdependencies of a complex array of firm is referred to as a:
A) trade association
B) strategic alliance
C) network
D) joint venture
E) consortia
Q3) ________ involves all the activities required to manufacture a product.
A) Resource procurement
B) Administration
C) Operations
D) Outbound logistics
E) Inbound logistics
Q4) Why is it important for a firm to have a well-thought-out business model?
Q5) Describe the two potential fatal flaws of business models.
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Chapter 7: Preparing the Proper Ethical and Legal Foundation
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Sample Questions
Q1) Describe what is meant by a "general partnership" and a "limited partnership."
Describe the major difference between the two.
Q2) Partnerships are organized as either:
A) specific or general partnerships
B) narrow or broad partnerships
C) inward or outward partnerships
D) general or limited partnerships
E) partial or full partnerships
Q3) Its recommended that a startup wait one to three years before hiring an attorney to represent their firm.
A)True
B)False
Q4) A disadvantage of a sole proprietorship is that it is subject to double taxation. A)True
B)False
Q5) What is meant by the term "piercing the corporate veil"? How can the corporate veil be pierced?
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Chapter 8: Assessing a New Venture's Financial Strength and Viability
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Sample Questions
Q1) Profitability is the ability to earn a profit.
A)True
B)False
Q2) Describe the purpose of the income statement, the balance sheet, and the statement of cash flows.
Q3) Budgets are itemized forecasts of a company's income, expenses, and capital needs and are also an important tool for financial planning and control.
A)True
B)False
Q4) If a firm's debt-to-equity ratio gets to low, it may have trouble meeting its obligations and securing the level of financing needed to fuel its growth.
A)True
B)False
Q5) Financial management deals with two things: raising money and managing a company's finances in a way that achieves the highest rate of return.
A)True
B)False
Q6) Describe the difference between historical and pro form financial statements.
Page 10
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Chapter 9: Building a New Venture Team
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Sample Questions
Q1) The fact that a corporation has a board of directors precludes it from having a board of advisors.
A)True
B)False
Q2) Which of the following was not identified in the textbook as an attribute of an effective board member?
A) strong personal and professional networks
B) unknown in their field
C) investment and/or operating experience
D) ability and willingness to mentor the CEO and the top managers of the firm
E) pattern recognition skills
Q3) A new venture team is the group of founders, key employees, and advisers that move a new venture from an idea to a fully functioning firm.
A)True
B)False
Q4) A skills profile is a chart that depicts the most important skills that are needed and where skills gaps exist.
A)True
B)False
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Chapter 10: Getting Financing or Funding
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Sample Questions
Q1) Bootstrapping is the use of creativity, ingenuity, and any means possible to obtain resources other than borrowing money or raising capital from traditional sources.
A)True
B)False
Q2) A ________ 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.
A) assurance
B) loan
C) guarantee
D) warranty
E) lease
Q3) Individual must typically pledge all of their personal assets to secure an SBA guaranteed loan.
A)True
B)False
Q4) Historically, the vast majority of SBIR Phase 1 proposals are approved.
A)True
B)False
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Chapter 11: Unique Marketing Issues
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Sample Questions
Q1) It is more effective to sell:
A) features rather than benefits
B) features and benefits are equal in their importance
C) features are more important for service firms and benefits are more important for manufacturing firms
D) benefits rather than features
E) features are more important for manufacturing firms and benefits are more important for service firms
Q2) Karen Simon recently purchased a digital camera. She considered three cameras, a Kodak that was priced at $139.00, a Panasonic priced at $189.00, and a Nikon priced at $229.00. Karen couldn't tell much difference between the cameras, so he bought the Nikon, figuring that because it was the most expensive of the three, it must be the best. According to the textbook, Karen was making a:
A) price-quality attribution
B) price-merit attribution
C) cost-value acknowledgement
D) cost-worth attribution
E) price-worth acknowledgement
Q3) What is a brand? How does a new firm develop a brand?
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Page 13
Chapter 12: The Importance of Intellectual Property
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Sample Questions
Q1) A trademark is renewable:
A) every 10 years, as long as the mark remains in use
B) indefinitely, regardless of whether the mark remains in use
C) every 20 years from the date of application for the trademark
D) every 3 years
E) every 33 years
Q2) Which of the following items would typically be protected by a form of intellectual property protection other than trade secret statutes?
A) financial forecast
B) product formula
C) a company's tagline
D) logs of sales calls
E) employee roster
Q3) Intellectual property is any product of human intellect that is intangible but has value in the marketplace.
A)True
B)False
Q4) What is a copyright? What is protected by a copyright?
Q5) What is a trademark? Why are trademarks important?
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Chapter 13: Preparing for and Evaluating the Challenges of Growth
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Sample Questions
Q1) ________ 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
Q2) Andy Dungy owns a company that makes iPod and iPhone accessories. He is trying to increase his sales, primarily because he knows that increasing production lowers the average cost of each unit produced. The reason for growth illustrated in this example is: A) economies of scope
B) market leadership
C) influence, power, and survivability
D) need to accommodate the growth of key customers
E) economies of scale
Q3) Do most firms want to grow or are they reluctant to grow? What are the advantages of growth?
Q4) What is the organizational life cycle and why is it important?
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Chapter 14: Strategies for Firm Growth
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Q1) In an acquisition, the surviving firm is called the acquirer, and the firm that is acquired is called the target.
A)True
B)False
Q2) Internally generated growth is often called ________ growth because it does not rely on outside intervention.
A) natural
B) whole
C) expected
D) organic
E) ordinary
Q3) Which of the following is an advantage of internal growth strategies?
A) provides maximum control
B) adds to industry capacity
C) need to develop new resources
D) investment in a failed internal effort can be difficult to recoup
E) slow form of growth
Q4) The majority of entrepreneurial firms first enter foreign markets as exporters.
A)True
B)False
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Chapter 15: Franchising
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Sample Questions
Q1) One of the most important questions a prospective franchisor should consider is whether the fees and royalties charged by a franchisor are consistent with the franchise's value or worth.
A)True
B)False
Q2) Which of the following statements is incorrect regarding the future of franchising?
A) Franchise organizations represent a large and growing segment of the retail and service sectors of U.S. businesses.
B) The future of franchising appears to be dim.
C) More and more college graduates are choosing careers in industries that are heavily dominated by franchising.
D) According to the International Franchise Association, franchising represents about $880 billion in annual retail sales in the United States.
E) The International Franchise Association estimates that franchise organizations provide jobs for more than 11 million Americans.
Q3) List and explain three of the common misconceptions about franchising.
Q4) How can a person tell if franchising is right for them?
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