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Entrepreneurship : successfully launching new ventures

Bruce R. Barringer; R. Duane Ireland

Chapter 14

Strategies for Firm Growth - all with Video Answers

Educators

Chapter Questions

00:43

Problem 1

What is the difference between an internal and an external growth strategy?

Vipender Yadav
Vipender Yadav
Numerade Educator

Problem 2

What are the keys to a firm's effort to achieve success through new product and service development?

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00:21

Problem 3

What are some of the common reasons new products fail?

Amrita Bhasin
Amrita Bhasin
Numerade Educator

Problem 4

What is a market penetration strategy? Provide an example of a market penetration strategy and describe how using it effectively might increase a firm's sales.

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Problem 5

What is a product line extension strategy? Provide an example of a product line extension strategy and describe how its effective use might increase a firm's sales.

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Problem 6

What is an international expansion strategy? What are the keys to implementing this strategy successfully in an entrepreneurial firm?

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Problem 7

What is an international new venture? Why might it be to the benefit of an entrepreneurial start-up to position itself as an international new venture from the outset?

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03:01

Problem 8

What are the six foreign-market entry strategies and what are the key characteristics of each one?

Kaylee Mcclellan
Kaylee Mcclellan
Numerade Educator

Problem 9

What rules of thumb should an entrepreneurial venture follow to successfully sell its products overseas?

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Problem 10

What is the difference between a merger and an acquisition? How can acquisitions help firms fill their needs?

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01:45

Problem 11

What characteristics are associated with a promising acquisition candidate?

Emily Himsel
Emily Himsel
Numerade Educator

Problem 12

What is the difference between a licensor and a licensee?

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02:17

Problem 13

What is the meaning of the term licensing? How can licensing be used to increase a firm's revenues?

Daniel Cisneros
Daniel Cisneros
Numerade Educator
02:17

Problem 14

What is the purpose of a licensing agreement? In a licensing agreement, which party is the licensor, and which is the licensee?

Daniel Cisneros
Daniel Cisneros
Numerade Educator

Problem 15

What is the difference between technology licensing and merchandise and character licensing? Provide examples of both types of licensing and how they can increase a firm's sales.

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01:38

Problem 16

Over the past several years, why have strategic alliances and joint ventures become increasingly prevalent growth strategies for entrepreneurial firms?

Daniel Cisneros
Daniel Cisneros
Numerade Educator

Problem 17

What is the difference between technological alliances and marketing alliances? Provide examples of both types of alliances and how they can increase a firm's sales.

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01:19

Problem 18

What is a joint venture?

Daniel Cisneros
Daniel Cisneros
Numerade Educator

Problem 19

How does a joint venture differ from a strategic alliance?

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Problem 20

What is the difference between a scale joint venture and a link joint venture? Provide examples of both types of joint ventures and how their effective use can increase a firm's sales.

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Problem 21

Spend some time studying Barnana, the focus of the "You Be the VC 14.1" feature. Is it more likely that Barnana will grow through internal or external growth strategies? What internal growth strategies and/or external growth strategies make sense for Barnana?

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Problem 22

Jessica Martin, a classmate of yours, just returned from an entrepreneurship boot camp that your university's technology incubator sponsored. The boot camp consisted of three days of intense focus on how to successfully launch a firm. You overheard Jessica telling another classmate that the boot camp was extremely helpful and she's already signed up for another threeday boot camp that will focus on how to successfully grow a firm. The classmate looked at Jessica and said, "How in the world can you spend three days talking about how to successfully grow a firm?" Jessica opened her notebook and showed the classmate the 10 -item agenda for the upcoming three-day boot camp. What do you think the 10 items consist of? (Consider the material in Chapter 13 and this chapter in formulating your answer.)

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Problem 23

Think of a company that you're familiar with that has grown via a product line extension strategy. Provide an overview of the company and how it rolled out its product line extension strategy.

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02:14

Problem 24

Spend some time studying Chipotle, the popular Mexican food restaurant chain. What growth strategies has this
firm used? What challenges to you think Chipotle faces today in terms of its future growth potential?

Brenda Sanchez
Brenda Sanchez
Numerade Educator
01:22

Problem 25

Zynga is a social network game developer that develops browser-based games that work both as stand-alone games and as application widgets on social networking sites like Facebook. What are the pluses and minuses of Zynga's approach to launching games that rely on another company's platform (i.e., Facebook) to reach its intended audience? Is Zynga growing primarily via internal or external growth strategies?

Alejandro Ruiz
Alejandro Ruiz
Numerade Educator

Problem 26

Cisco Systems, Microsoft, and IBM often acquire small, technology-based entrepreneurial firms. Why would Cisco Systems, Microsoft, and IBM, which each employ hundreds of product development specialists and engineers, buy other firms to acquire technology and add to their product lines, rather than developing the technology and new products in-house?

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05:32

Problem 27

Google reportedly offered to buy Groupon for $\$ 5$ billion to $\$ 6$ billion in November 2010 -an offer that Groupon turned down. Why do you think Google wanted to acquire Groupon, and why do you think Groupon declined Google's offer?

Shafiq Rehman
Shafiq Rehman
Numerade Educator
01:56

Problem 28

Brian Brunner is an entrepreneur who has invented several devices that are used in the telecommunications industry. He has patented the devices and manufactures them in a job shop in Oklahoma City. Brian sells the devices directly to AT\&T and Verizon. Last week, Brian received a certified letter in the mail from Nokia, indicating that firm's interest in licensing the technology that is represented in one of his devices. Brian doesn't know anything about licensing and has turned to you for help. What would you tell Brian about licensing, and how would you suggest that he respond to Nokia's letter?

Hrithvik Gadhiya
Hrithvik Gadhiya
Numerade Educator
01:32

Problem 29

A friend of yours owns a chain of 25 fitness centers in Florida and Georgia. The fitness centers cater primarily to young professionals, ages 21 to 40 . Your friend is worried because his centers have declined in terms of overall membership. Your friend told you that he's interested
in pursuing strategic alliances to rev up the growth of his centers but is having trouble thinking about the types of companies he can partner with. What suggestions would you offer to your friend given his situation?

Emily Himsel
Emily Himsel
Numerade Educator

Problem 30

Study the popular social networking site LinkedIn. What growth strategies has the company employed? What are the most appropriate growth strategies for this firm to use going forward? Why?

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00:32

Problem 31

Which of the growth strategies discussed in the chapter are the most risky? Which are the least risky? What role should risk play in a company's decision to pursue a particular growth strategy?

Christopher Dzorkpata
Christopher Dzorkpata
Numerade Educator