Chapter 3 Feasibility Analysis
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1. ___ is the process of determining whether a business idea is viable.: Fea-
sibility analysis
2. ___research is research that is collected by the person or persons com-
pleting the analysis. ___research probes data that is already collected.: Pri-
mary , Secondary
3. Cynthia Jones recently surveyed 200 of her classmates to get a sense of
the demand for a new software product she is working on. Collecting data
via a survey you administer yourself is referred to as ___research.: primary
4. Talking to industry experts, obtaining feedback from prospective cus-
tomers, and administering surveys are examples of ___research.: primary
5. Trade journals, industry-related publications, government statistics, and
competitors' Web sites are examples of ___research.: secondary
6. 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 provides access to articles
covering a wide-variety of business and industry related issues. Jennifer is
conducting ___research.: secondary
7. ___ feasibility is an assessment of the overall appeal of the product or
service being proposed.: Product/service
8. The two components of product/service feasibility analysis are prod-
uct/service ___and product/service ___.: desirability, demand
9. 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 ___ feasibility component of a complete feasibility analy-
sis.: product/service
10. A ___ involves showing a preliminary description of a product or service
idea to prospective customers to gauge customer interest, desirability, and
purchase intent.: concept test
11. Tracy Brady is in the process of developing an exciting new product in
the smartphone industry. She'd like to show a preliminary description of
the product to industry experts and prospective customers to solicit their
feedback. Tracy should complete and distribute a ___statement.: concept
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12. ___ is an incorrect approach to administering a concept test.: The best
candidates to distribute a concept statement to are family and friends
13. Three commonly utilized methods for determining product/service de-
mand are: talking face-to-face with potential customers; utilizing online tools,
such as Google AdWords and landing pages; and library, Internet and gumshoe
research.
14. 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 wherev-
er 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.: gumshoe
15. According to the textbook, the only way to know if your product or service
is what people want and need is by: talking to them.
16. An ___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.: industry ,target market
17. The two components of industry/target market feasibility analysis are
industry: attractiveness and target market attractiveness.
18. ___ feasibility analysis is an assessment of the overall appeal of the in-
dustry and market for the product or service being proposed.: Industry/target
market
19. ___feasibility analysis is conducted to determine whether a proposed
business has sufficient management expertise, organizational competence,
and resources to successfully launch its business.: Organizational
20. The two primary issues to consider in organizational feasibility analysis
are: management prowess and resource sufficiency.
21. The two primary issues to consider in organizational feasibility analysis
are management prowess and: resource sufficiency.
22. A ___ team is the group of founders, key employees, and advisers that
either manage or help manage a new business in its startup years.: new
venture
23. According to the textbook, two of the most important factors to consider
regarding "management prowess" are: the passion the sole entrepreneur or
the management team has for the business idea and the extent to which the
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management team or sole entrepreneur understands the markets in which the firm
will participate.
24. The focus in organizational feasibility analysis is on: nonfinancial re-
sources.
25. 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.: 6 to 12
26. ___feasibility analysis is a quick financial assessment of the viability of
a business idea.: Financial
27. The most important issues to consider in financial feasibility analysis
are: total startup cash needed, financial performance of similar businesses, and
the overall financial attractiveness of the proposed venture.
28. The most important issues to consider in financial feasibility analysis
are: financial performance of similar businesses, total cash needed, and
overall: attractiveness of the proposed venture.
29. The First Screen feasibility analysis template is called "First Screen"
because: feasibility analysis is an entrepreneur's initial or first pass at determining
the feasibility of a business idea.
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