Managing For Growth Test Bank Docx Chapter 7

CHAPTER 7: MANAGING FOR GROWTH

TEST BANK

A) MULTIPLE CHOICE

Select the "most correct" option:

1. Which of the following is not a stage in the business life cycle:

a. introduction.

b. growth.

c. maturity.

d. decline.

2. The growth stage of the business cycle is characterized by:

a. increasing revenue.

b. increasing profits.

c. declining risk of failure.

d. all of the above.

3. Which of the following is not an indicator of the need for renewal:

a. declining sales and profits.

b. declining market share.

c. declining employee turnover.

d. none of the above.

4. When a business is operating at a small percentage of its capacity, the strategy

should be to:

a. increase capacity.

b. increase sales.

c. reduce promotion.

d. all of the above.

5. SWOT analysis examines:

a. the situation, the work, the organization, the tactics.

b. internal and external advantages and disadvantages of a business.

c. the predictions of the Conference Board of Canada.

d. the ethical issues of conducting business.

6. An increase in market share is usually related to changes in:

1. distribution strategy.

2. the decor and design of the business.

3. a re-design of the product.

4. price and promotion strategies.

7. Compared to building your own chain of company-owned stores, selling

franchises is:

a. faster.

b. more expensive.

c. legally simpler.

d. all of the above.

8. Multinational corporations tend to:

a. come in large and small sizes.

b. have supply sources in a single country.

c. conduct marketing on an international basis.

d. all of the above.

9. EDC stands for:

a. External Distribution Control.

b. Economic Development Corporation.

c. Export Development Canada.

d. Environmental Disaster Control.

10. The amount of time it takes to recoup the amount of an investment is called the:

a. project R.O.I.

b. future value.

c. payback period.

d. return interval.

11. Should you consider exporting product, all of the following are considered sources for help
except:

a. Canadian Commercial Corporation (CCC)

b. Business Development Bank (BDC)

c. International Trade Canada (ITC)

d. Department of Foreign Affairs and \international Trade (DFAIT)

12. All of the following are early warning signs of decline for a small business except:

a. Decreasing Sales and profits

b. Increasing employee turnover

c. Decreasing available capacity

d. Decreasing market share and market potential

B) TRUE OR FALSE

1. T F It is possible to have increasing sales while the market potential is shrinking.

2. T F Predatory pricing is an aggressive, but perfectly legal activity.

3. T F The concept of "100 % Capacity" can be applied to most businesses.

4. T F Mexico is a partner in NAFTA.

5. T F Market potential is made up of your market share plus the market share

of all your competitors.

6. T F "Going public" is the most common way for a small business to acquire growth capital.

7. T F Features of both debt and equity financing are found in "subordinate financing".

8. T F As a business grows, there tends to be a shift from equity capital to debt capital.

9. T F The biggest trading partner (volume of trade) of Canada is the U.S.

10. T F The biggest trading partner of the U.S. (volume of trade) is Japan.

C) FILL IN THE BLANKS

1. The renewal stage of the Business Life Cycle is followed by .

2. Meeting with a departing employee is referred to as an

.

3. The "T" in SWOT analysis refers to .

4. " expansion" means selling more of what you're

already selling to the customer groups you're already selling to.

5. " expansion" means selling what you're

already selling to new groups of customers.

6. A large company that typically has supply sources or facilities in several countries and markets its products internationally is called a _______________________.

7. _______________________________are methods and systems for organizing and sharing product-related information that can affect the length of time a product can be viable.

8. _______________________the length of time it takes to recoup the amount of a particular investment.

9. The purpose of the ___________________________is to set safety standards for

manufactured products at international levels or better and to test and certify products for meeting these standards.

D) SHORT ANSWER

1. Identify the stages of the business cycle and list one or two characteristics of each

stage.

2. Outline the Product Life Cycle and explain how it can be extended. Use examples.

3. Outline and discuss the three basic strategies for increasing sales.

4. Identify and describe three aspects of a company’s finances that concern lenders or investors.

E) ESSAY

1. Identify and explain the major indicators that a business is in decline and ready for

renewal. (1 page max).

2. Discuss the dangers of entering into Export Markets for small Canadian firms.

3. Explain the four factors involved in SWOT analysis. For each factor, provide a hypothesis test for each.