CHAPTER 5

Question 1

Offering a new product to an established or new market.

Answer 1

new entry

Question 2

Offering an established product to a new market.

Answer 2

new entry

Question 3

Creating a new organization.

Answer 3

new entry

Question 4

The set of decisions, actions, and reactions that first
generate, and then exploit over time, a new entry.

Answer 4

entrepreneurial strategy

Question 5

basic building blocks to a firm’s functioning and
performance; the inputs into the production process.

Answer 5

resources

Question 6

TRUE OR FALSE
Resources can be combined in different ways.

Answer 6

TRUE

Question 7

true or false
A bundle of resources provides a firm its capacity to achieve superior
performance.

Answer 7

true

Question 8

resources must be (3)

Answer 8

valuable, rare, inimitable

Question 9

Information, technology, know-how, and skills that
provide insight into a market and its customers.

Answer 9

market knowledge

Question 10

Information, technology, know-how, and
skills that provide insight into ways to create new knowledge.

Answer 10

technological knowledge

Question 11

Search costs include

Answer 11

time and money

Question 12

The viability of a new entry can be described in terms of

Answer 12

a window of
opportunity

Question 13

Negative outcome from acting on the
perceived opportunity.

Answer 13

error of commission

Question 14

Negative outcome from not acting on the new entry opportunity

Answer 14

error of omission

Question 15

first mover advantages that can enhance performance

Answer 15

cost advantage, less competitive rivalry, opportunity to secure important supplier and distributor channels, a better position to satisfy customers, the opportunity to gain expertise through participation

Question 16

Difficulty in estimating the potential size of the market, how fast it will grow, and the key dimensions along which it will grow.

Answer 16

demand uncertainty

Question 17

Difficulty in assessing whether the technology will perform and whether alternate technologies will emerge and leapfrog over current technologies.

Answer 17

technological uncertainty

Question 18

Difficulty in adapting to new environmental conditions.

Answer 18

adaptation

Question 19

Entrepreneurial attributes of persistence and determination can inhibit the ability of the entrepreneur to (3)

Answer 19

detect, and implement, change.

Question 20

Difficulty in accurately assessing whether the new product or service provides value for them.

Answer 20

uncertainty for customers

Question 20

are highly likely in emerging industries.

Answer 20

environmental changes

Question 21

ways to overcome customer uncertainty

Answer 21

Informational advertising
highlighting product benefits over substitutions
Creating a frame of reference for potential customer.
Educating customers through demonstration and
documentation.

Question 22

The grace period in which the first mover operates in the industry under conditions of limited competition.

Answer 22

leading time

Question 23

Lead time can be extended if the first mover can erect barriers to entry by:

Answer 23

building customer loyalties
building switching costs
protecting product uniqueness
securing access to important sources of supply and distribution

Question 24

derived from uncertainties over market demand, technological development, and actions of competitors.

Answer 24

risk

Question 25

two strategies that can be used to reduce these uncertainties

Answer 25

market scope strategies & imitation strategies

Question 26

Focus on which customer groups to serve
and how to serve them.

Answer 26

market scope strategies

Question 27

involves offering a small product range
to a small number of customer groups to satisfy a particular need.

Answer 27

narrow-scope strategy

Question 28

Focuses on producing customized products, localized business operations, and high levels of craftsmanship.

Answer 28

narrow-scope strategy

Question 29

leads to specialized expertise and knowledge

Answer 29

narrow-scope strategy

Question 30

high-end of the market represents a highly profitable niche

Answer 30

narrow-scope strategy

Question 31

reduces some competition-related risks but increases the risk associated with market uncertainties

Answer 31

narrow-scope strategy

Question 32

involves copying the practices of others

Answer 32

imitation strategies

Question 33

why imitation strategies are done

Answer 33

it is easier to imitate the practices of a successful firm.
it can help develop skills necessary to be successful in the industry.
it provides organizational legitimacy

Question 34

types of limitation strategies

Answer 34

franchising, me-too strategy

Question 35

a franchisee acquires the use of a PROVEN FORMULA for new entry from a franchisor

Answer 35

franchising

Question 36

copying products that already exist and attempting to build an advantage through minor variations

Answer 36

“me-too” strategy

Question 37

reduce the entrepreneur’s costs associated with R&D

Answer 37

imitation strategy

Question 38

reduce customer uncertainty over the firm

Answer 38

imitation strategy

Question 39

make the new entry look legitimate from day one

Answer 39

imitation strategy

Question 40

source of competitive advantage

Answer 40

resources

Question 41

The viability of a new entry can be described in terms of a

Answer 41

window of opportunity