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The first part of an external analysis is to _________.
determine in which industry the new business will compete
An _________ is defined as those companies within a specified geographic radius that will be in direct competition for the same customers and sales as that of the new business.
Gerald is planning on setting up a burger joint in his hometown. He finds out the NAICS (North American Industry Classification System) code for his business. From this information, he is able to understand that his immediate area contains virtually no competitors and has the potential to do very well. In the context of the critical steps involved in conducting an external analysis, Gerald is __________.
defining the industry in which he is competing
Once a business is broadly defined, the next step is to __________.
define a narrow group of customers
When defining potential customers, an owner must _________.
define a specified radius around the business
According to the book, a clear understanding of the business's customers is important because it ________ and ________.
helps in focusing on the core customers, aids in keeping a strategic distance between itself and its competitors; provides a way to control expenses
Mary has established a reasonable geographic radius for her flower shop. As a result, she should be able to __________.
examine potential customers
Fragmented markets have _________.
no clear dominant competitors
A tool to better understand competitors and their capabilities is a ___________.
Which of the following is likely to occur if entrepreneurs fail to define a radius from which they believe their business will draw a majority of its customers?
It will distort the entrepreneur's advertising efforts.
Larry has set up a new burger joint in his hometown. He has obtained information about who will most likely be customers at his joint. Because his joint is located near a college, he knows that a majority of his customers are going to be students. In the context of the critical steps involved in conducting an external analysis, which of the following should be Larry's next step?
Larry should conduct research to know his exact competitors.
When completing a conceptual map, an entrepreneur needs to visit _______ of the potential competitors.
What are the reasons for recommending that the entrepreneur should personally develop the competitive map:
-Develops insights into positioning, pricing, and facility layout.
-Knowledge of what is right and wrong with competitors helps with positioning.
-It is less expensive.
In developing a competitive map, an owner should review ________, ________, and ________.
the average number of customers per hour, population of the area, and household income
Which of the following is an example of the list of items that an entrepreneur should include while visiting and making comparisons to his/her potential competitors?
-Size of the facility
-Access from road
-Nearby attraction for customers
According to the book, which of the following is an example of an economic issue that a new business should consider?
-Case of entry/exit
-Elasticity of demand
A substitute can assist in forming a _________ on the price that can be charged for product or service.
An entrepreneur cannot leave his or her business because of the amount of money that was invested. This is called an ________.
Competitors will often ________ their knowledge if your business is not a potential direct competitor.
Which of the following products is likely to have an elastic demand?
Keith has set up a new burger joint in his locality. He is planning on introducing craft beers and milkshakes to the existing menu. Thus, the customers who visit his joint will have a range of options to choose from. This scenario exemplifies _________.
Harold is the owner of a beer cafe in his locality. His beer cafe is not the only one in the area. In order to improve business, Harold decides to make a few changes to his cafe. He installs a state-of-the-art music system, a karaoke machine, and a snooker table in his cafe. Customers flock to his cafe every evening because it is the only cafe in the locality with these facilities. Which of the critical steps involved in conducting an external analysis has helped Harold improve his business?
Developing an understanding of the competitive advantage
___________ is the edge a business has over competing businesses.
A competitive advantage in a business could be _______, ________, and ________.
location, product selection, and activity of the firm
Which of the following provides the new business with the opportunity to make more money than the competition?
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