Multiple choice questions:
1. The key ingredient-the crucial element-to avoiding the failure of a new business is:
the business plan.
knowing the business.
technical expertise regarding the product.
differentiating the business and product from the competition.
2. More businesses fail because of ________________ than for any other reason.
incompetent management
theft by employees
insufficient capital
poor choice of location
3. One key to success with a business startup is to begin with enough ________________:
capital
sales
accounts payable
suppliers
4. An effective strategic plan does which of the following?
Identifies a complete set of success factors-financial, operating, and marketing, that yield a competitive advantage for the company.
Focuses on one generic strategy to the exclusion of all other strategies.
Always seeks a high profile in the specific markets chosen.
Is always cost based.
5. The strategic planning process for small businesses is:
market-focused.
the same as it is for a large company.
generally done by top management with little or no participation by employees.
product-focused and similar to that for large companies.
6. The primary output of the strategic management process should be a(n):
matching of its strengths and weaknesses to the opportunities and threats in the environment.
enticement to outside investors and lenders to put money into the business.
complete explanation of the company's product or service.
description of the company's competitive situation.
7. The strategic management process:
is especially difficult for the small business because of its limited resources.
divides mass markets into smaller, less homogeneous units.
provides the small business owner with the tools for managing the uncontrollable elements in the external business environment.
helps a small business develop the game plan that guides it in creating its mission, vision, goals, and objectives.
8. A significant advantage a franchisee has over the independent small business owner is participation in the franchiser's __________.
centralized and large-volume buying power
social gatherings
profits
policies
9. The success of franchising is largely due to:
the economic growth of the United States and other developed nations, economies.
more college students choosing to go to work for themselves rather than for corporations.
the mutual benefits it provides to the franchiser and franchisee.
All of these factors
10. __________ franchising involves providing the franchisee with a complete business system--the established name, the building layout and design, accounting systems, etc.
Product distribution
Trade name
Pure
Conversion