Chapter 7: Entrepreneurship

Question 1

franchising

Answer 1

entrepreneurial alliance between two organizations: the franchisor and franchisee.

Question 2

transaction fee model

Answer 2

companies charge a fee for goods and services i.e. Amazon

Question 3

advertising support model

Answer 3

advertisers pay the site operator to gain access to the demographic group that visits the operator’s site

Question 4

intermediary model

Answer 4

bringing buyers and sellers together and charging a commission for each sale, i.e. Ebay

Question 5

affiliate model

Answer 5

sites pay commissions to other sites to drive business to their own sites, i.e. Zazzle

Question 6

subscription model

Answer 6

charge a monthly or annual fee for site visits or access to site content

Question 7

social entrepreneurship

Answer 7

leveraging resources to address social problems.

Question 8

social enterprises

Answer 8

organization that applies business models and leverages resources in ways that address social problems

Question 9

What does it take personally to be an entrepreneur?

Answer 9

commitment and determination, leadership, opportunity obsession, tolerance and risk, ambiguity, and uncertainty, creativity, self-reliance, and ability to adapt, motivation to excel.

Question 10

Innovation and Risk (figure 7.2)

Answer 10

Upper left: high innovation/low risk: ventures of truly novel ideas with little risk.
Upper right: high innovation/high risk: novel product ideas are accompanied by high risk because the financial investments are high and the competition is great.
Lower left: low innovation/high risk: most small businesses

Question 11

business incubators

Answer 11

protected environments for new, small businesses

Question 12

business accelerators

Answer 12

organization that provides support and advice to help young businesses grow

Question 13

IPOs

Answer 13

initial public stock offerings: sale to the public, for the first time, of federally registered and underwritten shares of stock in the company

Question 14

opportunity analysis

Answer 14

includes a description of the good or service, an assessment of the opportunity, an assessment of the entrepreneur, a specification of activities and resources needed to translate your idea into a viable business, and your source(s) of capital

Question 15

business plan

Answer 15

formal planning step that focuses on the entire venture and describes all the elements involved in starting it

Question 16

legitimacy

Answer 16

people’s judgement of a company’s acceptance, appropriateness, and desirability

Question 17

social-capital

Answer 17

being part of a social network and having a good reputation

Question 18

skunkworks

Answer 18

project teams designated to produce a new product

Question 19

bootlegging

Answer 19

refers to informal efforts in which employees work to create new products and processes of their own choosing and initiative

Question 20

entrepreneurial orientation

Answer 20

tendency of an organization to engage in activities designed to identify and capitalize successfully on opportunities to launch new ventures by entering new or established markets with new or existing goods or services.