New Ventures May Find It Difficult to Use Differentiation Strategies

question 42

Multiple Choice

New ventures may find it difficult to use differentiation strategies successfully because they lack ________ and ________.

• A) sufficient funding; superior innovation
• B) competitors; superior technology
• C) sufficient funding; qualified entrepreneurs
• D) innovative ideas; potential customers

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Definitions:

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.

Gambler's Fallacy

The erroneous belief that if a particular event occurs more frequently than normal during the past, it is less likely to happen in the future, or vice versa, in situations that are truly random.

Ignoring Base Rates

Ignoring base rates is a cognitive bias that involves disregarding or underestimating general information (base rates) in favor of specific individual information when making decisions or judgments.

Availability Bias

A cognitive bias that causes people to overestimate the likelihood of events based on their availability in memory, often leading to skewed decision-making.