Shelby Collins owns a firm that designs and sells women’s clothing. She is currently trying to grow her firm by developing new product lines. Shelby is pursuing a(n) ________ growth strategy.

Question options:

  

   

a) 

in-house

 
   

b) 

domestic

 
   

c) 

internal

 
   

d) 

external

 

Question 2

5 / 5 points

       

________ licensing is the licensing of proprietary technology that the licensor typically controls by virtue of a utility patent.

Question options:
  
   
a) 

Skill

 
   
b) 

Intellectual property

 
   
c) 

Utility

 
   
d) 

Technology

 

Question 3

5 / 5 points
       

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

Question options:
  
   
a) 

New product development

 
   
b) 

Mergers and acquisitions

 
   
c) 

Market penetration

 
   
d) 

Product line extension

 

Question 4

5 / 5 points
       

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.

Question options:
  
   
a) 

introduction

 
   
b) 

launch

 
   
c) 

ramp-up

 
   
d) 

early growth

 

Question 5

5 / 5 points
       

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

Question options:
  
   
a) 

Need to develop new resources

 
   
b) 

Get quality and pricing right

 
   
c) 

Investment in a failed internal     effort can be difficult to recoup

 
   
d) 

Provides maximum control

 

Question 6

5 / 5 points
       

________ 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.

Question options:
  
   
a) 

Difficult hazard

 
   
b) 

Adverse hazard

 
   
c) 

Adverse selection

 
   
d) 

Moral selection

 

Question 7

5 / 5 points
       

If a business enhances the quality of a product, makes it more convenient to use, improves its durability, or makes it more up-to-date, any one of those initiatives fall under the category of:

Question options:
  
   
a) 

increasing the market     penetration of an existing product or service.

 
   
b) 

extending product lines.

 
   
c) 

geographic expansion.

 
   
d) 

improving an existing product or     service.

 

Question 8

5 / 5 points
       

________ costs are the costs a company incurs as it makes sales.

Question options:
  
   
a) 

Static

 
   
b) 

Irregular

 
   
c) 

Balanced

 
   
d) 

Variable

 

Question 9

5 / 5 points
       

Which of the following is a disadvantage of growth by means of external growth strategies?

Question options:
  
   
a) 

Diversification of business risk

 
   
b) 

Economies of scale

 
   
c) 

Getting access to proprietary     products or services

 
   
d) 

Loss of organizational     flexibility

 

Question 10

5 / 5 points
       

Internally generated growth is often called organic growth because it does not rely on:

Question options:
  
   
a) 

outside intervention.

 
   
b) 

its own skills and capabilities.

 
   
c) 

external funding.

 
   
d) 

internal leadership.

 

Question 11

5 / 5 points
       

Jack Wills owns a commercial nursery. Jack has more business than he wants, in fact, he is presently turning away exciting new business opportunities because it is expensive to hire new employees, and he knows that if he did hire new employees it would take time for the new employees to be trained and to be socialized into the culture of his firm. Jack’s inability to take advantage of the new business opportunities that are coming his way is due largely to the ________ problem.

Question options:
  
   
a) 

business aptitude

 
   
b) 

entrepreneurial aptitude

 
   
c) 

commercial opportunity

 
   
d) 

managerial capacity

 

Question 12

5 / 5 points
       

Qualcomm, a high-tech company headquartered in San Diego, owns the rights to several of the key components that permit cell phones to work. Instead of selling cell phones itself, Qualcomm grants permission to many companies to use specific forms of its intellectual property in exchange for monetary compensation. Qualcomm is engaging in an external growth strategy referred to as:

Question options:
  
   
a) 

licensing.

 
   
b) 

strategic alliances.

 
   
c) 

acquisitions.

 
   
d) 

new product development.

 

Question 13

5 / 5 points
       
Which of the following is an example of an external growth strategy?
Question options:
  
   
a) 

Geographic expansion

 
   
b) 

Improving an existing product or     service

 
   
c) 

Increasing the market     penetration of an existing product or service

 
   
d) 

Strategic alliances

 

Question 14

5 / 5 points
       

________ means that as a firm grows and adds personnel, the new hires typically do not have the same ownership incentives as the original founders, so the new hires may not be as motivated as the founders to put in long hours or may even try to avoid hard work.

Question options:
  
   
a) 

Difficult selection

 
   
b) 
Adverse hazard
 
   
c) 

Ethical selection

 
   
d) 

Moral hazard

 

Question 15

5 / 5 points
       

Trevor Kimble owns a firm that sells products to the publishing industry. Trevor is currently evaluating a set of opportunities that he feels his firm is capable of pursuing. According to the text, Trevor is evaluating his firm’s:

Question options:
  
   
a) 

prolific potential.

 
   
b) 

dynamic opportunity options.

 
   
c) 

productive opportunity set.

 
   
d) 

passionate opportunity set.

 

Question 16

5 / 5 points
       

__________ occurs when a firm holds the number one or the number two position in an industry or niche market in terms of sales volume.

Question options:
  
   
a) 

Business scalability

 
   
b) 
Economies of scale
 
   
c) 

Reaching for scale

 
   
d) 

Market leadership

 

Question 17

5 / 5 points
       

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 ________ problem.

Question options:
  
   
a) 

commercial capacity

 
   
b) 
entrepreneurial aptitude
 
   
c) 
managerial capacity
 
   
d) 

business capacity

 

Question 18

5 / 5 points
       

New product development, other product-related strategies, and international expansion are examples of ________ growth strategies.

Question options:
  
   
a) 
external
 
   
b) 
domestic
 
   
c) 

primary

 
   
d) 
internal
 

Question 19

5 / 5 points
       

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

Question options:
  
   
a) 

Fixed

 
   
b) 

Consistent

 
   
c) 

Steady

 
   
d) 
Variable
 

Question 20

5 / 5 points
       

Which mechanism for firm growth involves the creation and sale of new products or services?

Question options:
  
   
a) 
Strategic alliances
 
   
b) 
New product development
 
   
c) 

Licensing

 
   
d) 

Franchising