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Feasibility analysis Choose the one alternative that best completes the statement or answers the question. 1) ________ is conducted to determine whether a proposed business has sufficient management expertise, organizational competence, and resources to successfully launch its business. A) Product/service feasibility analysis B) Financial feasibility analysis C) Organizational feasibility analysis D) Industry/market feasibility analysis E) Institutional feasibility analysis 2) The Partnering for Success feature in Chapter 3 focuses on the task of finding the right business partner. According to the feature, which of the following is an incorrect rule-of-thumb in finding a business partner? A) Pick a partner that is similar rather than different from you in terms of skills, abilities, and functional background. B) Hire a lawyer to negotiate the partnership agreement. C) Know the skills and experiences you need in a partner. D) Make sure you and your partner's work habits are compatible. E) Make sure you and your partner have common goals and aspirations. 3) The focus in organizational feasibility analysis is on: A) Financial resources for manufacturing firms and nonfinancial resources for service firms B) Financial resources C) Nonfinancial resources D) Nonfinancial and financial resources equally E) Financial resources for service firms and nonfinancial resources for manufacturing firms 4) A buying intentions survey is typically administered as part of ________ feasibility analysis. A) Product/service B) Industry/target market C) Legal/regulatory D) Organizational E) Financial 5) Al Jenkins is in the process of developing an exciting new product in the smartphone industry. He'd like to show a preliminary description of the product to industry experts and prospective customers to solicit their feedback. Al should complete and distribute a(n): A) Early adopter statement B) Perception statement C) Adoption risk-reward statement D) Usability statement E) Concept statement 6) Which of the following statements about target markets is incorrect? A) A target market is a place within a larger market segment that represents a narrower group of customers with similar needs. B) The challenge in identifying an attractive target market is to find a market that's large enough for the proposed business but is yet small enough to avoid attracting larger competitors.

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C) it’s generally easier to find good information about a target market than an industry as a whole. D) There is a distinct difference between a firm's industry and its target market. E) By focusing on a target market, a firm can usually avoid head-to -head competition with industry leaders and can focus on serving a specialized market very well. 7) The What Went Wrong features in Chapter 3 is titled "eBay Drop-Off Stores: How Feasible Were They?" What was it about the potential feasibility of eBay Drop-Off stores that worried skeptics from the beginning? A) That consumers were losing interest in eBay and that the stores would not have enough "quality" merchandise to sell on eBay B) That consumers were losing interest in online auctions and that eBay was declining in terms of its popularity C) That the variety of items the stores would be asked to sell would be too broad and that consumers were losing interest in online auctions D) That the stores would not have enough "quality" merchandise to sell on eBay and that the variety of items the stores would be asked to sell would be too broad E) That eBay was attracting too many competitors and that consumers were becoming increasingly Internet savvy, making it easier for them to sell items at online auctions themselves rather than relying on an intermediary like an eBay Drop Off store 8) A ________ survey is an instrument that is used to gauge customer interest in a product or service. A) Purchase intent B) Product demand C) Buying intentions D) Shopper intent E) Consumer interest 9) Which of the following factors is a positive as it pertains to the financial feasibility of a business venture? A) Inconsistent and slow growth in sales during the first five to seven years in a clearly defined market niche B) Reliance on externally generated funds to finance and sustain growth C) Absence of an existing opportunity for investors to convert equity into cash D) High percentage of recurring revenue E) Inability to forecast income and expenses with a reasonable degree of accuracy 10) Talking to industry experts, obtaining feedback from prospective customers, and administering surveys are examples of: A) Derivative research B) Principal research C) Primary research D) Fundamental research E) Secondary research 11) Corry Pierce is investigating the feasibility of a new type of electronic game targeting middle school and high school-age boys. Which of the following is an example of "gumshoe research" that Corry could conduct to get a sense of the likely demand for his game? A) Administer a concept test. B) Administer a buying intentions survey. C) Spend several days in electronic games arcades and stores to observe the types of games that attract the interest of middle school age and high school age boys. D) Download electronic games industry reports from the Internet.

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E) Look at the Web sites of a number of companies that sell electronic games. 12) Which of the following is an incorrect approach to administering a concept test? A) After the concept statement is developed, it should be shown to at least 10 people. B) A short survey should be attached to the concept statement to solicit feedback. C) The concept statement shouldn't exceed one page. D) The best candidates to distribute a concept statement to are family and friends. E) If time permits, a concept statement should be used in an iterative manner and distributed to several groups of people. 13) A(n) ________ is a group of firms producing a similar product or service, such as electronic games, smartphones, or computers. A) Business group B) Trade group C) Conglomerate D) Industry E) Commerce group 14) The most important issues to consider in financial feasibility analysis are: financial performance of similar businesses, total cash needed, and: A) Overall attractiveness of the proposed venture B) Management prowess C) The projected borrowing power of the proposed business D) The projected years to an IPO or an acquisition for the proposed venture E) The projected internal rate of return of the proposed venture 15) The two components of product/service feasibility analysis are product/service demand and: A) Target market attractiveness B) Product/service desirability C) Financial performance of similar businesses D) Resource sufficiency E) Management prowess 16) Which of the following is not an attribute of an attractive industry? A) Is young rather than old B) Is fragmented rather than concentrated C) Is not crowded D) Is important to the customer E) Is late rather than early in its life cycle 17) Which of the following is not a part of assessing the product/service feasibility of a business idea? A) Gumshoe research B) Buying intentions survey C) Analyzing industry attractiveness D) Library research E) Concept test

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18) ________ feasibility analysis is an assessment of the overall appeal of the industry and market for the product or service being proposed. A) Financial B) Product/service C) Institutional D) Organizational E) Industry/target market 19) Which of the following is incorrect regarding the "total startup cash needed" component of financial feasibility analysis? A) An explanation of where the startup funds will come from should be included. B) If the money will come from friends and family or is raised through other means, a reasonable plan should be stipulated to repay the money. C) There are worksheets posted online that help entrepreneurs determine the startup costs to launch their venture. D) When explaining where the startup funds will come from, avoid cursory explanations such as "I plan to bring investors on board" or "I'll borrow the money." E) it’s not necessary to complete an actual budget of startup expenses. 20) The most important issues to consider in financial feasibility analysis are: A) Resource sufficiency, industry attractiveness, and total startup cash needed B) Total startup cash needed, financial performance of similar businesses, and the overall financial attractiveness of the proposed venture C) Concept testing, total startup cash needed, and financial performance of similar businesses D) Target market attractiveness, resource sufficiency, and product/service demand E) Total startup cash needed, management prowess, and product/service demand 21) Cameron Smith recently surveyed 200 of his classmates to get a sense of the demand for a new software product he is working on. Collecting data via a survey you administer yourself is referred to as: A) Derivative research B) Initial research C) Direct research D) Secondary research E) Primary research 22) A(n) ________ is a group of firms producing a similar product or service. A firm's ________ is the limited portion of the industry that it goes after or to which it wants to appeal. A) Trade group, industry B) Industry, trade group C) Competitive group, target market D) Target market, industry E) Industry, target market 23) A(n) ________ is the group of founders, key employees, and advisers that either manage or help manage a new business in its startup years. A) Opening team B) New venture team C) Scout team D) Launch team

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E) Entrepreneurial team 24) A ________ market is a place within a larger market segment that represents a narrower group of customers with similar needs. A) Primary B) Secondary C) Target D) Minor E) Parallel 25) ________ feasibility is an assessment of the overall appeal of the product or service being proposed. A) Industry/market B) Consumer C) Industry/market segment D) Purchaser/end-user E) Product/service 26) Which of the following is not one of the four areas of feasibility analysis discussed in the textbook? A) Societal feasibility B) industry/market feasibility C) product/service feasibility D) Organizational feasibility E) Financial feasibility 27) ________ is the process of determining whether a business idea is viable. A) Scenario analysis B) Viability analysis C) Achievability analysis D) Feasibility analysis E) Opportunity recognition 28) Trade journals, industry-related publications, government statistics, and competitors' Web sites are examples of: A) Secondary research B) Vertical research C) Principal research D) Legacy research E) Action research 29) A(n) ________ involves showing a preliminary description of a product or service idea to prospective customers to gauge customer interest, desirability, and purchase intent. A) Concept test B) Idea test C) Idea prospectus D) product/service statement E) Impression test 30) The Savvy Entrepreneurial Firm feature in Chapter 3 focuses on Bill Gross, and how a company he was leading, Knowledge Adventure, made a 180-degree turn on the positioning of a product. According to the feature, Gross and his team made the change as a result of: A) Hiring consultants to provide them advice B) Conducting Internet research C) Studying industry trends D) Administering a concept test and a buying intention's survey

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E) Observing how customers acted when buying their product 31) Morphology, the company profiled in the opening feature for Chapter 3, was started to produce a board game. The feature describes how Morphology sought to validate its business idea. According to the feature: A) Morphology did an exemplary job validating its business idea, and its board game is now being sold in more than 40 stores across the United States, with some distribution in Canada B) Morphology was unable to validate its business idea and the idea was dropped C) Morphology's feasibility analysis was incomplete, and the company has struggled ever since it was launched D) Morphology's feasibility analysis was well done, and the company was acquired by Mattel before it could launch its board game as an independent company E) Morphology's feasibility analysis was flawed, and the company failed 32) To test resource sufficiency, a firm should list the ________ most critical non-financial resources that it will need to move its business idea forward and determine if those resources are available. A) 6 to 12

B) 10 to 16

C) 15 to 25

D) 1 to 2

E) 3 to 5

33) The two components of product/service feasibility analysis are: A) Product/service timeliness and product/service value B) Product/service demand and product/service timeliness C) Product/service durability and product/service value D) Product/service value and product/service affordability E) product/service desirability and product/service demand 34) The two primary issues to consider in organizational feasibility analysis are: A) Capital requirements and industry attractiveness B) Concept testing and financial rate of return C) Industry attractiveness and overall attractiveness of the investment D) Management prowess and resource sufficiency E) Target market attractiveness and financial rate of return 35) Mintel, IBISWorld, and BizMiner are databases most likely to be used during the ________ feasibility stage of the feasibility analysis process. A) product/service B) political/legal C) Organizational D) Economic E) Industry/target market 36) Does it make sense? Is it reasonable? Is it something consumers will get excited about? Does it take advantage of an environmental trend, solve a problem, or fill a gap in the marketplace? These are the types of questions asked during the ________ component of a complete feasibility analysis. A) Concept feasibility B) Financial feasibility C) Organizational feasibility D) Industry/target market feasibility E) Product/service feasibility

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37) Which of the following items is typically not included in a concept statement? A) A description of how much money the new venture needs B) A description of how the product or service will be sold and distributed C) The benefits of the product or service D) A brief description of the company's management team E) The intended target market 38) According to the textbook, which is the proper sequence of events in developing successful business ideas? A) Development of a business plan, opportunity recognition, feasibility analysis B) Feasibility analysis, development of a business plan, opportunity recognition C) Opportunity recognition, feasibility analysis, development of a business plan D) Development of a business plan, feasibility analysis, opportunity recognition E) Feasibility analysis, opportunity recognition, development of a business plan 39) The two primary issues to consider in organizational feasibility analysis are management prowess and: A) Target market attractiveness B) Total startup cash needed C) Concept testing D) Market timeliness E) Resource sufficiency 40) The First Screen feasibility analysis template included in Chapter 3 is called "First Screen" because: A) Feasibility analysis is an entrepreneur's initial or first pass at determining the feasibility of a business idea B) It is the first step in a sequence of several steps that must be completed before a business idea is deemed to be feasible C) It is the first feasibility analysis template created D) It is the first and most important step in the opportunity recognition process E) It is the first of several "screens" that a business idea must pass through before it is considered to be feasible 41) The two components of industry/target market feasibility analysis are: A) Industry attractiveness and product/service demand B) Industry status and target market status C) Industry attractiveness and target market attractiveness D) Industry evolution and target market attractiveness E) Industry sufficiency and target market demand 42) Katlin Smith is investigating the feasibility of developing an iPhone app to help high school students with math. To get a good handle on the potential demand for her service, Katlin is scrounging around for information wherever she can find it. She even spent two weeks volunteering as a math tutor at a local high school to see how students responded to her methods. Katlin is conducting ________ research. A) Gumshoe B) Derivative C) On-the-ground D) Parallel E) Secondary 43) Sam Willis is distributing an instrument, which includes a concept statement with a short survey attached, to try to gauge customer interest in a product he is developing. Sam is distributing a: A) Product demand survey

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B) Consumer interest survey C) Purchase intent survey D) Buying intentions survey E) Shopper intent survey 44) Which of the following factors is a negative as it pertains to the financial feasibility of a business venture? A) Internally generated funds to finance and sustain growth B) High percentage of recurring revenue—meaning that once a firm wins a client, the client will provide recurring sources of revenue C) Inability to forecast income and expenses with a reasonable degree of accuracy D) Availability of an exit opportunity for investors to convert equity into cash E) Steady and rapid growth in sales during the first five to seven years in a clearly defined market niche 45) Which of the following issues should be considered in industry/target market feasibility analysis? A) Industry attractiveness B) Resource sufficiency C) Management prowess D) Gaps in the marketplace E) Financial performance of similar businesses 46) According to the textbook, two of the most important factors to consider regarding "management prowess" are: A) Whether the members of the management team are good "networkers" and the passion the sole entrepreneur or the management team has for the business idea B) Whether the members of the management team have worked successfully together before and the passion the sole entrepreneur or the management team has for the business idea C) Whether the members of the management team are good "networkers" and the extent to which the management team or sole entrepreneur understands the markets in which the firm will participate D) The passion the sole entrepreneur or the management team has for the business idea and the extent to which the management team or sole entrepreneur understands the markets in which the firm will participate E) The educational and functional backgrounds of the management team or sole entrepreneur 47) Which of the following is an example of a resource that normally would not be evaluated as part of the "resource sufficiency" stage of organizational feasibility analysis? A) Ability to form favorable business partnerships B) Key support personnel C) Affordable office space D) Key equipment needed to operate the business E) Financial resources 48) The template for completing a feasibility analysis included in Appendix 3.1 of the book is called the ________ analysis. A) Initial Screen B) Flash Screen C) First Evaluation D) First Screen E) First Pass 49) Jennifer Burroughs is thinking about starting a firm in the upscale women's fashion industry. To get a full appreciation of the competitive nature of the industry, and how she might position her products, Jennifer has spent considerable time looking at industry-related publications, Hoover's Online, and ABI-Inform, which is a database that

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provides access to articles covering a wide-variety of business and industry related issues. Jennifer is conducting: A) Purposeful research B) Action research C) Temporary research D) Primary research E) Secondary research 50) ________ is a quick financial assessment of the viability of a business idea. A) Organizational feasibility analysis B) Financial feasibility analysis C) Institutional feasibility analysis D) Industry/market feasibility analysis E) Product/service feasibility analysis

ESSAY. Write your answer in the space provided or on a separate sheet of paper. 51) What is gumshoe research and why is it important? 52) Describe the purpose of industry/target market feasibility analysis, and identify the two primary issues that should be considered. What is the difference between a firm's in...