REVIEW GUIDE FOR MIDTERM

MGT358
Spring 2018
Midterm comprises of a combination of
multiple choice questions and short and long answers.
Main overview but it is not all inclusive.
Known the Key Concepts and Application of Concepts

Entrepreneurs Recognize Opportunities (Chapter 1)

 Describe the process perspective of entrepreneurship, and list the major phases of this
process
 Explain why entrepreneurship can be viewed as arising out of the intersection of
enterprising people and opportunities

I. Explain what entrepreneurs do.

II. The entrepreneur shifts economic resources from an area of lower productivity and into one of
higher productivity and greater yield. By doing this, entrepreneurs add value to scarce (limited)
resources.
III. Describe how free-enterprise economies work and how entrepreneurs fit into them.
IV. Find and evaluate opportunities to start your own business. The five roots of opportunity:
V. Explain how profit works as a signal to the entrepreneur.
VI. A business opportunity is an idea plus three characteristics:
VII. Use cost/benefit analysis to make decisions.
A. Cost/benefit analysis is the process of comparing costs and benefits in order to come
to a breakeven.
VIII. Use SWOT analysis to evaluate a business opportunity.

Franchising (Chapter 2)
 Define different types of franchising
 Real customer need and explain why an entrepreneur should seek to develop a product or
service that meets a real need
 Define opportunities in existing business

I. Define and describe franchising:

A. A franchise
B. Product and trade-name
C. Business-format franchising
II. Identify the positive and negative aspects of franchising.

III. Understand the structure of the franchise industry.

A. Large franchisors control most of the industry.
B. Types include Internet franchises, conversion franchising, and co-branding.
IV. Recognize the legal aspects of franchising.
V. Learn how to research franchise opportunities.
VI. Explore international franchising.
Finding Opportunity in an Existing Business (Chapter 3)
 Define an entrepreneurial opportunity and explain why such opportunities exist
 Identify the origins of opportunities
 List the different forms that entrepreneurial opportunities can take and explain why some
forms are better for new firms than other

I. Understand the potential benefits of buying a going concern.

II. Identify potential drawbacks of purchasing a business.
III. Learn how to identify and evaluate purchase opportunities.
IV. Learn how to determine the value of a business.
V. Learn how to negotiate and close the deal.
VI. Recognize the joining of a family business as an entrepreneurial pathway.

Cognitive Process
 Explain why cognitive processes (the process of thinking) provide an important
foundation for understanding creativity and opportunity recognition
 Explain why we tend to use heuristics and other "mental shortcuts", and how these
shortcuts can affect entrepreneurs

Creating Business From Opportunity (Chapter 5)

 Explain why entrepreneurs need to gather several kinds of information before launching
their new ventures and describe the nature of that information
 Define competitive advantage and explain why new ventures must have one to be
successful
 Describe how entrepreneurs can prevent others from learning about their business ideas,
and the barriers entrepreneurs can use to prevent competitors from imitating these ideas
I. Define your business definition – Who, What, How. Why is the purpose
II. Articulate your core beliefs, your mission, and your vision.
III. define what information you need
IV. Analyze your competitive advantage. Unique Selling Proposition. Understand a competitive
analysis chart and six competitive advantage factors.
IV. Perform feasibility analysis, know the different types, and calculating the economics of one
unit of sale.

Exploring Your Market (Chapter 6)

I. Explain how marketing differs from selling.
II. Understand how market research prepares you for success. Market research is the process of
finding out who your potential customers are, where you can reach them, and what they want and
need.
III. Choose your market segment and research it
A. A market segment is composed of consumers who have a similar response to a certain type of
marketing. Value propositions
B. Segmentation methods, and Product Life cycle, Geoffrey Moore Crossing the Chasm chart
IV. Position your product or service within your market.
Human Resources and Management (Chapter 19)
 Explain why it is often better for entrepreneurs to work with co-founders with different
experience, training, and skills than they do, rather than co-founders who are similar to
themselves in those respects
I. Describe the 10 basic tasks handled by managers.
II. Recruit your employees.
III. Know where and how to find qualified job candidates.
IV. Develop your organizational culture.
V. Determine your organizational structure.
VI. Understand the functions of human resources management.
VII. Explain the difference between human capital and social capital and indicate why the
founding team of new ventures should be high in both.

Leadership and Ethical Practices (Chapter 20)

I. Identify leadership styles.
II. Organize for effective time management.
III. Pursue ethical leadership to build an ethical organization.
IV. Make sure your business is run in an ethical manner.
V. Maintain your integrity.
VI. Incorporate social responsibility into your company