A+ Answers

Question 1 

__________ is (are) generated when increasing production lowers the average cost of each unit produced.

A. Business scalability

B. Economies of scale

C. Market leadership

D. Economies of scope

Question 2 

__________ costs are costs that a company incurs whether it sells something or not.

A. Fixed

B. Consistent

C. Variable

D. Static

Question 3 

The __________ stage of the organizational life cycle is the startup phase, where a business determines what its core strengths and capabilities are and starts selling its initial product or service.

A. introduction

B. launch

C. early growth

D. initiating

Question 4 

__________ 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. Limited selection

B. Adverse selection

C. Complex selection

D. Internal conflict

Question 5 

Betty Harrington owns a floor covering firm. Her market research is telling her that she is taking business away from the large home improvement stores in her trade area. One thing that Betty is worried about is that the large stores might fight back by lowering their prices, which hurts everyone except the consumer. The day-to-day challenge of firm growth that this example is referring to is:

A. quality control.

B. price stability.

C. capital constraints.

D. benchmarking.

Question 6 

When a firm’s managerial resources are insufficient to take advantage of its new product and service opportunities, the subsequent bottleneck is referred to as the:

A. commercial capacity problem.

B. business capacity problem.

C. managerial capacity problem.

D. business aptitude problem.

Question 7 

According to Penrose, the set of opportunities a firm feels it is capable of pursuing is referred to as the:

A. creative field of potential.

B. productive opportunity set.

C. prolific potential.

D. dynamic opportunity options.

Question 8 

__________ are similar to economies of scale, except the advantage comes through the scope (or range) of a firm’s operations rather than from its scale of production.

A. Economies of reach

B. Economies of span

C. Economies of capacity

D. Economies of scope

Question 9 

According to the textbook, there are three important things that a business can do to prepare for growth: growth. growth-oriented business model. nature of business growth.

A. plan for growth, adopt a growth-oriented business model, and stay committed to a core strategy.

B. appreciate the nature of business growth, stay committed to a core strategy, and plan for

C. develop a viral marketing campaign, stay committed to a core strategy, and adopt a

D. develop business partnerships, diversify beyond the company’s core strategy, and appreciate the

Question 10 

Barb Campbell owns an entertainment company which has increased both its profits and revenues over an extended period of time. Barb’s firm is experiencing:

A. resolute growth.

B. unrelenting growth.

C. sustained growth.

D. moderate growth.

Question 11 

Internally generated growth is often called __________ growth because it does not rely on outside intervention.

A. natural

B. ordinary

C. expected

D. organic

Question 12 

Which of the following is an advantage of internal growth strategies?

A. encourages internal entrepreneurship

B. adds to industry capacity

C. investment in a failed internal effort can be difficult to recoup

D. slow form of growth

Question 13 

Two years ago, Jason Jennings and Mary Scott each owned a small chain of bagel restaurants in Orange County, California. Just recently, they decided to pool their interests and combine their individual chains of restaurants into one chain. What Jason and Mary did with their firms is called a(n):

A. licensing agreement.

B. strategic alliance.

C. joint venture.

D. merger.

Question 14 

In the context of strategic alliances, __________ typically match a company with a distribution system with a company that has a product to sell to increase sales of a product or service.

A. promotion alliances

B. marketing alliances

C. organizational alliances

D. directional alliances

Question 15 

In the context of strategic alliances, __________ feature cooperation in research and development, engineering, and manufacturing.

A. administrative alliances

B. directorial alliances

C. organizational alliances

D. technological alliances

Question 16 

Which of the following was identified in the textbook as a disadvantage of participating in strategic alliances and joint ventures?

A. risk and cost sharing

B. economies of scale

C. partners’ cultures may clash

D. gain access to a foreign market

Question 17 

Which of the following is an example of an external growth strategy?

A. licensing

B. increasing the market penetration of an existing product or service

C. extending product lines

D. geographic expansion

Question 18 

The Savvy Entrepreneurial Firm feature in Chapter 14 focuses on SwitchFlops, a company that produces sandals with interchangeable straps. The primary takeaway from the feature is that savvy growth-minded startups:

A. utilize both internal and external growth strategies.

B. emphasize international growth strategies from their inception.

C. compete on the basis of quality rather than price.

D. configure their products and services in ways that have built-in growth potential.

Question 19 

A(n) __________ seeks to increase the sales of a product or service through greater marketing efforts or through increased production capacity and efficiency.

A. strategic alliance strategy

B. geographic expansion strategy

C. market penetration strategy

D. product line extension strategy

Question 20 

__________ is work that is done for a company by people other than the company’s full-time employees.

A. Outsourcing

B. Insourcing

C. Productivity subcontracting

D. Capacity enhancement