Finding a Sound Business Idea - Chapter Quiz
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Questions and Answers

What is considered a sound business idea?

  • An idea that requires minimal financial investment.
  • Any business idea that can be easily implemented.
  • A concept that has been popular in the past.
  • A venture that presents a desirable economic opportunity. (correct)

    • Which of the following enhances the performance of a product?

  • Increase in its resale value.
  • Ability to carry more weight. (correct)
  • Reduction in operational costs.
  • Higher market demand.

    • What is NOT a method of screening generated business ideas?

  • Personal preference evaluation. (correct)
  • Market feasibility analysis.
  • Financing feasibility review.
  • Technical feasibility assessment.

    • What does the term 'market feasibility' indicate?

    <p>The stability and demand within a target market.</p> Signup and view all the answers

    What type of business idea involves adapting new technology for existing products?

    <p>Adaptation.</p> Signup and view all the answers

    What is an example of improving a product through acquisition cost?

    <p>A new model of cellphone that leads in features.</p> Signup and view all the answers

    What should a final selection process NOT include?

    <p>Global market analysis.</p> Signup and view all the answers

    What is essential for technical feasibility in a business idea?

    <p>Ease of conversion into products or services.</p> Signup and view all the answers

    Which of the following is not a source of market information?

    <p>Social media feedback.</p> Signup and view all the answers

    Which of the following best describes financing feasibility?

    <p>Availability of sufficient funds for operations.</p> Signup and view all the answers

    A sound business idea should not provide any desirable value to the entrepreneur.

    <p>False</p> Signup and view all the answers

    Market feasibility is primarily concerned with the potential competitive strength of the firm.

    <p>True</p> Signup and view all the answers

    Financing feasibility ensures that there are excessive funds available for operations.

    <p>False</p> Signup and view all the answers

    Salvage value refers to the original purchase price of a product at the end of its useful life.

    <p>False</p> Signup and view all the answers

    Market feasibility can include prior studies of the market as a source of information.

    <p>True</p> Signup and view all the answers

    The procedure for determining the best business idea includes zero listing as a final selection method.

    <p>True</p> Signup and view all the answers

    An unanticipated means to generate business ideas can include a person's hobbies.

    <p>True</p> Signup and view all the answers

    Technical feasibility assesses whether a business idea is difficult to convert into products or services.

    <p>False</p> Signup and view all the answers

    A standard product cannot be professionalized in the search for business ideas.

    <p>False</p> Signup and view all the answers

    Acquisition cost refers to the amount spent on maintaining a product over its lifecycle.

    <p>False</p> Signup and view all the answers

    A sound business idea must provide a desirable value to the entrepreneur.

    <p>True</p> Signup and view all the answers

    Screening of generated ideas does not include market feasibility.

    <p>False</p> Signup and view all the answers

    Technical feasibility is concerned with the conversion of ideas into real products or services.

    <p>True</p> Signup and view all the answers

    Financing feasibility ensures that there are sufficient funds to finance operations.

    <p>True</p> Signup and view all the answers

    Acquisition cost pertains to the original price paid for a product regardless of its lifespan.

    <p>False</p> Signup and view all the answers

    An unanticipated means to generate business ideas can include events encountered by a person.

    <p>True</p> Signup and view all the answers

    Salvage value refers to the potential resale value of a product after its useful life.

    <p>True</p> Signup and view all the answers

    Customizing a standard product is an example of adapting new technology.

    <p>False</p> Signup and view all the answers

    Market feasibility can be determined solely by prior studies without additional information.

    <p>False</p> Signup and view all the answers

    Zero listing is a method included in the final selection of business ideas.

    <p>True</p> Signup and view all the answers

    A sound business idea should provide a desirable value to the entrepreneur.

    <p>True</p> Signup and view all the answers

    Acquisition cost only refers to the original price of a product.

    <p>False</p> Signup and view all the answers

    Customizing a standard product is an example of professionalizing an existing business idea.

    <p>True</p> Signup and view all the answers

    Financing feasibility ensures there are sufficient funds to finance operations.

    <p>True</p> Signup and view all the answers

    Technical feasibility assesses if business ideas can be easily converted into real products or services.

    <p>True</p> Signup and view all the answers

    Market feasibility looks exclusively at the supply side of the market.

    <p>False</p> Signup and view all the answers

    An unanticipated means of generating business ideas can involve a person's work experiences.

    <p>True</p> Signup and view all the answers

    Zero listing is a method used to narrow down business ideas during the final selection process.

    <p>False</p> Signup and view all the answers

    Salvage value refers to the estimated resale value of a product at the end of its useful life.

    <p>True</p> Signup and view all the answers

    Screening generated ideas lacks the element of market feasibility.

    <p>False</p> Signup and view all the answers

    Re-engineering business processes is always less disruptive than customizing software.

    <p>False</p> Signup and view all the answers

    Using a 'vanilla' implementation method typically results in on-time and within-budget projects.

    <p>True</p> Signup and view all the answers

    Maintaining legacy systems while adding ERP modules ensures organizations receive the full benefits of ERP.

    <p>False</p> Signup and view all the answers

    Outsourcing requires complete control over the external vendor's operations to be effective.

    <p>False</p> Signup and view all the answers

    Customization of software is typically quicker and more cost-effective than re-engineering business processes.

    <p>False</p> Signup and view all the answers

    Interactive prototyping involves limited user participation during the development phases.

    <p>False</p> Signup and view all the answers

    Automating an existing system is considered beneficial as it eliminates old problems and flaws.

    <p>False</p> Signup and view all the answers

    The phases of the ERP systems design process include planning, requirements analysis, and maintenance.

    <p>True</p> Signup and view all the answers

    The detailed design phase is focused on discarding applicable business processes.

    <p>False</p> Signup and view all the answers

    ERP customization generally leads to seamless upgrades whenever new versions are released.

    <p>False</p> Signup and view all the answers

    Prototyping is a method that guarantees faster development of information systems.

    <p>False</p> Signup and view all the answers

    Best practices methodology aids in identifying business processes that can be tailored during the ERP implementation.

    <p>True</p> Signup and view all the answers

    End-users developing information systems is an effective approach for large-scale projects.

    <p>False</p> Signup and view all the answers

    The systems development life cycle includes phases such as problem definition, feasibility study, and maintenance.

    <p>True</p> Signup and view all the answers

    ERP systems are designed to completely replace all existing legacy systems without any disruption.

    <p>False</p> Signup and view all the answers

    Creating a logical database design should occur after the details are refined.

    <p>False</p> Signup and view all the answers

    The costs associated with the traditional systems development life cycle are typically minimal.

    <p>False</p> Signup and view all the answers

    Software packages can leverage economies of scale in their development and maintenance.

    <p>True</p> Signup and view all the answers

    Tangible benefits are the only type of benefits considered in the planning phase of ERP systems.

    <p>False</p> Signup and view all the answers

    Maintenance is the final phase in both traditional and ERP systems development life cycles.

    <p>True</p> Signup and view all the answers

    Re-engineering always leads to more streamlined workflows compared to customization.

    <p>False</p> Signup and view all the answers

    Maintaining legacy systems while adding ERP modules guarantees full integration of business processes.

    <p>False</p> Signup and view all the answers

    Using a 'vanilla' implementation method typically results in projects that exceed time and budget expectations.

    <p>False</p> Signup and view all the answers

    Customization of software is quicker and simpler than the re-engineering of business processes.

    <p>False</p> Signup and view all the answers

    Outsourcing eliminates the dependence on the reliability and stability of external vendors.

    <p>False</p> Signup and view all the answers

    The detailed design phase focuses on identifying applicable business processes to support.

    <p>True</p> Signup and view all the answers

    Interactive prototyping involves extensive user participation throughout the development phases.

    <p>True</p> Signup and view all the answers

    The traditional systems development life cycle includes a phase dedicated to maintenance only after implementation is completed.

    <p>True</p> Signup and view all the answers

    A customized ERP implementation typically facilitates smoother transitions to new versions.

    <p>False</p> Signup and view all the answers

    End-user development is effective for large-scale development projects due to its resource efficiency.

    <p>False</p> Signup and view all the answers

    Prototyping in system development guarantees faster completion times for projects due to early end-user feedback.

    <p>False</p> Signup and view all the answers

    Creating a logical database design should be prioritized before refining details in the system development process.

    <p>True</p> Signup and view all the answers

    Automating an existing system is usually considered a productive way to address old problems without introducing new flaws.

    <p>False</p> Signup and view all the answers

    The planning phase in the ERP systems design process includes assessing business justifications that provide both tangible and intangible benefits.

    <p>True</p> Signup and view all the answers

    The feasibility study phase is unnecessary in traditional systems development as project projections are usually reliable.

    <p>False</p> Signup and view all the answers

    The ERP systems design process consists solely of five phases, excluding maintenance.

    <p>False</p> Signup and view all the answers

    Study Notes

    Understanding Sound Business Ideas

    • A sound business idea is an economic opportunity that an entrepreneur can realistically pursue for desirable value.
    • Improvement areas for products or services include performance, maintenance costs, acquisition costs, and salvage value.

    Improvement Areas for Offerings

    • Performance: Enhancements like increased weight capacity (e.g., durable chairs).
    • Maintenance cost: Reducing services needed (e.g., low-maintenance car batteries).
    • Acquisition cost: Offering competitive pricing (e.g., cheaper cellphone models).
    • Salvage value: Products with higher resale potential (e.g., versatile steel cabinets).

    Types of Business Ideas

    • Professionalizing an existing type of business.
    • Customizing standard products to meet specific consumer needs.
    • Adapting new technologies to enhance old products.
    • Replacing imported goods with locally produced alternatives.
    • Expanding business operations internationally.

    Determining the Best Business Idea

    • Preparation: Create a comprehensive list of business ideas through two approaches:
      • Unanticipated means: Drawing ideas from personal experiences, hobbies, or chance encounters.
      • Deliberate search: Utilizing targeted questions and idea generation techniques.
    • Screening: Evaluate the ideas based on criteria:
      • Market feasibility: Assess demand stability and competitive strengths.
      • Technical feasibility: Ensure ideas can be effectively developed into tangible products/services.
      • Financing feasibility: Confirm availability of sufficient funds for operations.
      • Financial feasibility: Analyze potential profitability and financial sustainability.

    Final Selection Process

    • Status quo analysis: Understanding current business landscape.
    • Shorter list creation: Narrowing down to the most viable ideas.
    • Zero listing: Discarding unfeasible options.

    Screening Generated Ideas

    • Market Feasibility:
      • Positive indicators include stable demand and competitive potential.
      • Sources for market information include previous studies, population polls, and direct negotiations with potential customers.
    • Technical Feasibility:
      • Business ideas must transform into viable products/services without excessive difficulty.
    • Financing Feasibility:
      • Adequate financing is crucial for sustaining business operations and ensuring long-term viability.

    Understanding Sound Business Ideas

    • A sound business idea is an economic opportunity that an entrepreneur can realistically pursue for desirable value.
    • Improvement areas for products or services include performance, maintenance costs, acquisition costs, and salvage value.

    Improvement Areas for Offerings

    • Performance: Enhancements like increased weight capacity (e.g., durable chairs).
    • Maintenance cost: Reducing services needed (e.g., low-maintenance car batteries).
    • Acquisition cost: Offering competitive pricing (e.g., cheaper cellphone models).
    • Salvage value: Products with higher resale potential (e.g., versatile steel cabinets).

    Types of Business Ideas

    • Professionalizing an existing type of business.
    • Customizing standard products to meet specific consumer needs.
    • Adapting new technologies to enhance old products.
    • Replacing imported goods with locally produced alternatives.
    • Expanding business operations internationally.

    Determining the Best Business Idea

    • Preparation: Create a comprehensive list of business ideas through two approaches:
      • Unanticipated means: Drawing ideas from personal experiences, hobbies, or chance encounters.
      • Deliberate search: Utilizing targeted questions and idea generation techniques.
    • Screening: Evaluate the ideas based on criteria:
      • Market feasibility: Assess demand stability and competitive strengths.
      • Technical feasibility: Ensure ideas can be effectively developed into tangible products/services.
      • Financing feasibility: Confirm availability of sufficient funds for operations.
      • Financial feasibility: Analyze potential profitability and financial sustainability.

    Final Selection Process

    • Status quo analysis: Understanding current business landscape.
    • Shorter list creation: Narrowing down to the most viable ideas.
    • Zero listing: Discarding unfeasible options.

    Screening Generated Ideas

    • Market Feasibility:
      • Positive indicators include stable demand and competitive potential.
      • Sources for market information include previous studies, population polls, and direct negotiations with potential customers.
    • Technical Feasibility:
      • Business ideas must transform into viable products/services without excessive difficulty.
    • Financing Feasibility:
      • Adequate financing is crucial for sustaining business operations and ensuring long-term viability.

    Understanding Sound Business Ideas

    • A sound business idea is an economic opportunity that an entrepreneur can realistically pursue for desirable value.
    • Improvement areas for products or services include performance, maintenance costs, acquisition costs, and salvage value.

    Improvement Areas for Offerings

    • Performance: Enhancements like increased weight capacity (e.g., durable chairs).
    • Maintenance cost: Reducing services needed (e.g., low-maintenance car batteries).
    • Acquisition cost: Offering competitive pricing (e.g., cheaper cellphone models).
    • Salvage value: Products with higher resale potential (e.g., versatile steel cabinets).

    Types of Business Ideas

    • Professionalizing an existing type of business.
    • Customizing standard products to meet specific consumer needs.
    • Adapting new technologies to enhance old products.
    • Replacing imported goods with locally produced alternatives.
    • Expanding business operations internationally.

    Determining the Best Business Idea

    • Preparation: Create a comprehensive list of business ideas through two approaches:
      • Unanticipated means: Drawing ideas from personal experiences, hobbies, or chance encounters.
      • Deliberate search: Utilizing targeted questions and idea generation techniques.
    • Screening: Evaluate the ideas based on criteria:
      • Market feasibility: Assess demand stability and competitive strengths.
      • Technical feasibility: Ensure ideas can be effectively developed into tangible products/services.
      • Financing feasibility: Confirm availability of sufficient funds for operations.
      • Financial feasibility: Analyze potential profitability and financial sustainability.

    Final Selection Process

    • Status quo analysis: Understanding current business landscape.
    • Shorter list creation: Narrowing down to the most viable ideas.
    • Zero listing: Discarding unfeasible options.

    Screening Generated Ideas

    • Market Feasibility:
      • Positive indicators include stable demand and competitive potential.
      • Sources for market information include previous studies, population polls, and direct negotiations with potential customers.
    • Technical Feasibility:
      • Business ideas must transform into viable products/services without excessive difficulty.
    • Financing Feasibility:
      • Adequate financing is crucial for sustaining business operations and ensuring long-term viability.

    Understanding Sound Business Ideas

    • A sound business idea is an economic opportunity that an entrepreneur can realistically pursue for desirable value.
    • Improvement areas for products or services include performance, maintenance costs, acquisition costs, and salvage value.

    Improvement Areas for Offerings

    • Performance: Enhancements like increased weight capacity (e.g., durable chairs).
    • Maintenance cost: Reducing services needed (e.g., low-maintenance car batteries).
    • Acquisition cost: Offering competitive pricing (e.g., cheaper cellphone models).
    • Salvage value: Products with higher resale potential (e.g., versatile steel cabinets).

    Types of Business Ideas

    • Professionalizing an existing type of business.
    • Customizing standard products to meet specific consumer needs.
    • Adapting new technologies to enhance old products.
    • Replacing imported goods with locally produced alternatives.
    • Expanding business operations internationally.

    Determining the Best Business Idea

    • Preparation: Create a comprehensive list of business ideas through two approaches:
      • Unanticipated means: Drawing ideas from personal experiences, hobbies, or chance encounters.
      • Deliberate search: Utilizing targeted questions and idea generation techniques.
    • Screening: Evaluate the ideas based on criteria:
      • Market feasibility: Assess demand stability and competitive strengths.
      • Technical feasibility: Ensure ideas can be effectively developed into tangible products/services.
      • Financing feasibility: Confirm availability of sufficient funds for operations.
      • Financial feasibility: Analyze potential profitability and financial sustainability.

    Final Selection Process

    • Status quo analysis: Understanding current business landscape.
    • Shorter list creation: Narrowing down to the most viable ideas.
    • Zero listing: Discarding unfeasible options.

    Screening Generated Ideas

    • Market Feasibility:
      • Positive indicators include stable demand and competitive potential.
      • Sources for market information include previous studies, population polls, and direct negotiations with potential customers.
    • Technical Feasibility:
      • Business ideas must transform into viable products/services without excessive difficulty.
    • Financing Feasibility:
      • Adequate financing is crucial for sustaining business operations and ensuring long-term viability.

    Systems Development Life Cycle (SDLC)

    • Traditional SDLC is a widely used approach to developing information systems that involves several phases.
    • The phases include problem definition, feasibility study, systems analysis, systems design, detailed design, implementation, and maintenance.
    • Traditional SDLC can be time-consuming and expensive due to its detailed analysis and design processes.

    New Approaches to Systems Development

    • Prototyping is an approach where models of the system are shown to end-users for feedback and guidance.
    • End-user development allows users to create simple information systems using tools like spreadsheets and databases.
    • Software packages offer economies of scale in development, enhancement, and maintenance.

    ERP Systems Design Process

    • The ERP systems design process includes the following phases: planning, requirements analysis, design, detailed design, implementation, and maintenance.
    • The planning phase involves needs assessment, business justification, and identifying tangible and intangible benefits of the ERP system.

    Requirements Analysis Phase

    • The requirements analysis phase focuses on identifying business processes to be supported by the ERP system.
    • Vendors often provide “best practices” models and checklists to guide businesses in requirements analysis.

    Design Phase

    • The design phase involves re-engineering business processes to fit the ERP software.
    • This phase requires considering both re-engineering and customization options.

    Re-engineering vs Customization

    • Re-engineering involves significant changes to workflows and procedures, potentially disrupting the organization.
    • Customization provides flexibility but may complicate future system upgrades.

    Alternative Design Choices

    • "Vanilla" implementation utilizes the vendor's prescribed methodology and involves implementing the ERP system as is with minimal customization.
    • Customized implementations involve tailoring the ERP system to fit specific requirements and can increase time and costs.

    Legacy Systems and Outsourcing

    • Maintaining legacy systems alongside ERP modules can be cost-effective but may limit the full benefits of the ERP system.
    • Outsourcing can be an alternative option, where external vendors operate the ERP system.

    Detailed Design Phase

    • The detailed design phase focuses on selecting the appropriate models, processes, and information to be supported by the ERP system.
    • "Best practices" methodology provides models, and businesses need to select applicable processes, discard inapplicable ones, and identify areas for customization.
    • This phase involves intensive user involvement for feedback and validation.

    ERP System Development

    • Organizations should develop enterprise resource planning systems in a systematic way
    • Enterprise systems development is similar to traditional software system development
    • The Systems Development Life Cycle (SDLC) is a methodology for managing complex projects
    • The SDLC has phases: Problem definition, feasibility study, systems analysis, system design, detailed design implementation, and maintenance
    • SDLC can be expensive and time-consuming
    • Alternatives to SDLC exist including prototyping, end-user development, and software packages

    ERP Systems Design Process

    • The phases of the ERP Systems Design Process are: Planning, Requirements Analysis, Design, Detailed Design, Implementation, Maintenance
    • During the Planning phase organizations conduct a needs assessment and business justification to determine the need for ERP and identify tangible and intangible benefits
    • During the Requirements Analysis phase, organizations define business processes that are supported by ERP systems
    • Design decisions are made during the Design phase. Organizations decide whether to (1) re-engineer business processes to fit ERP systems, (2) modify existing business processes to fit the ERP system, or (3) customize the ERP system based on current practices and needs
    • The implementation phase involves training, testing, and going live with the ERP system.
    • Maintenance requires ensuring the ERP system continues to meet organization needs and includes regularly reviewing and updating it.

    ERP Design Alternatives

    • "Vanilla" ERP implementation is easy to complete and generally on-time and on-budget
    • Customizing ERP systems requires extensive expertise and time
    • Maintaining legacy systems and adding ERP modules can be an effective way to extend existing systems
    • Outsourcing ERP systems allows organizations to share the service and infrastructure with other companies.
    • It is important to consider the reliability and stability of the vendor of an outsourced ERP system

    Detailed Design Phase

    • Organizations should choose the most effective practices that fit current organizational needs and business processes that are supported by the system
    • ERP systems are based on “best practices” and organizations need to discard practices and processes that do not align with them
    • Users need to provide extensive feedback to ensure the system meets their needs
    • The detailed design phase can be iterative and requires a great deal of input from users.

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    Related Documents

    The Search For Sound Business Idea PDF
    Enterprise Resource Planning PDF

    Description

    This quiz evaluates your understanding of the procedures and methods for determining the best business ideas. Explore key concepts such as screening ideas and the impact of organizational culture on creativity and innovation. Test your knowledge on sound business opportunities!

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