Question 1

Which of the following statements is incorrect regarding the industry analysis portion of a firm's business plan?

Accepted Answer

The answer of Which of the following statements is incorrect...

Question 2

The Savvy Entrepreneurial Firm feature for Chapter 4 focuses on three companies: Box.net, Pixability, and Groupon. The overarching point of the feature is:

Accepted Answer

The feature highlights how the business plans for Box.net, Pixability, and Groupon varied in their execution and required major changes after customer feedback was received. This illustrates that the degree to which business plans pan out varies and may require adjustments after launch.

Question 3

Which of the following statements is incorrect regarding the marketing plan section of a business plan?

Accepted Answer

Starting the marketing plan section by talking about competitors is not the best way to describe a company's marketing plan. While it is important to understand and analyze competitors, the marketing plan should focus on the business's own marketing strategies before discussing competitors.

Question 4

Which of the following statements is incorrect regarding the executive summary of a business plan?

Accepted Answer

The executive summary should not be the first thing written in preparing a business plan as it is a summary of the entire plan and should be written after the other sections have been completed.

Question 5

Industry structure refers to how:

Accepted Answer

Industry structure refers to the degree of concentration or fragmentation within an industry. This can be measured by the number and size of firms operating within the industry, and the degree of market power they hold. Therefore, option A is the correct answer.

Question 6

A(n) ________, in a business plan context, is a noteworthy event in the past or future development of a business.

Accepted Answer

A milestone is a significant achievement or event in the development of a business. It can be a past accomplishment, such as reaching a certain revenue target, or a future goal, such as opening a new location. As such, it is an important element to include in a business plan. Aspirations, intentions, signposts, and targets can all be related to milestones, but they do not capture the same idea of a significant accomplishment or event.

Question 7

The ________ is a short overview of the entire business plan.

Accepted Answer

The executive summary is a brief synopsis of the crucial elements of the entire business plan. It highlights the key points of the company's offering, target market, financial projections, and team.

Question 8

The Partnering for Success feature in Chapter 4 focuses on the types of partnerships that are common in business plans. According to the feature, businesses often make partnering an essential part of their business plans because they:

Accepted Answer

The answer of The Partnering for Success feature in Chapter...

Question 9

Match the business plan with its appropriate emphasis:

Accepted Answer

A summary business plan is typically used by companies in the early stages to gauge investor interest.

Question 10

A company's mission statement should be placed in the ________ section of its business plan.

Accepted Answer

The mission statement is an integral part of the company description section as it describes the purpose and objectives of the company.

Question 11

Edward Andrews has decided to write a business plan that is intended to be read primarily by his staff, which will present a blueprint for his company's entire operation and will provide guidance to operational managers. Edward should write a(n):

Accepted Answer

An operational business plan is designed to provide detailed guidance to operational managers and staff, outlining the company's entire operation.

Question 12

A computer-generated image of an invention that displays the invention as a 3D model that can be viewed from all sides and rotated 360 degrees is called a(n):

Accepted Answer

A computer-generated image that displays the invention as a 3D model that can be viewed from all sides and rotated 360 degrees is called a virtual prototype. This term accurately describes the technology and process used to create a 3D digital model of an invention. The other answer choices are not as specific or accurate in describing this type of image.

Question 13

Paul Hempken just spoke to an investor, who is interested in his business idea. Paul offered to send the investor a copy of his full business plan, but the investor asked for a short overview of the business plan instead. What portion of his business plan should Paul send the investor?

Accepted Answer

The best portion of the business plan to send to the investor in this case would be the executive summary, as it provides a concise overview of the entire plan and highlights the key points that would be of interest to the investor.

Question 14

A competitor analysis should be included in the ________ section of a business plan.

Accepted Answer

A competitor analysis is a key component of a market analysis, which evaluates the overall market and competition within that market. It is important for a company to understand their competitors and their weaknesses in order to position themselves effectively and gain a competitive advantage.

Question 15

The ________ section of the business plan addresses the basic logic of how profits are earned in the business.

Accepted Answer

The Economics of the Business section of the business plan details how the business generates revenue, manages expenses, and makes a profit. This section includes financial projections, pricing strategies, and an analysis of the industry and market trends that impact the business's financial performance.

Question 16

Match the business plan with its appropriate length:

Accepted Answer

The answer of Match the business plan with its appropriate...

Question 17

A(n) ________ describes why a company exists and what it aspires to become.

Accepted Answer

A mission statement is a clear and concise statement of an organization's purpose, including its goals and the methods it will use to achieve them. It defines why a company exists and what it aspires to become. Tactical statements, values statements, operations statements, and strategic statements may be important for a company, but they do not describe the company's purpose and aspirations in the same way as a mission statement does.

Question 18

Operating leverage is highest in companies that have:

Accepted Answer

Operating leverage refers to the degree of fixed costs in a company's cost structure. The higher the proportion of fixed costs relative to variable costs, the higher the operating leverage. Therefore, option E - companies with a high proportion of fixed costs relative to variable costs - has the highest operating leverage.

Question 19

According to the textbook, in many instances an investor will first ask for a copy of a firm's ________ and will request a copy of the full business plan only if that portion of the plan is sufficiently convincing.

Accepted Answer

The executive summary is a brief overview of the entire business plan and is often the first section that potential investors will read. If the executive summary is convincing enough, the investor may then request more detailed information such as the financial plan, operations plan, and industry analysis. The appendix is typically supplementary information and not the first thing an investor would request.

Question 20

The ________ section of a business plan breaks the industry into segments and zeroes in on the specific segment (or target market) to which the firm will try to appeal.

Accepted Answer

The market analysis section of a business plan is where the industry is segmented and the target market is identified. The competitive analysis section focuses on analyzing the competition within the industry, while the current status section provides information on the current state of the business. The marketing plan section outlines how the firm plans to market and promote its products or services. The operations plan section details the day-to-day functioning of the business.

Quiz 4: Writing a Business Plan