Deck 5: The Business Plan

Question 1

Once a generic strategy has been selected there is no need for future consideration of what strategy a firm should follow.

Answer 1

False

Question 2

Michael Porter identified five possible generic strategies.

Answer 2

False

Question 3

An important issue with a differentiation strategy is that qualitative differences between the firm that uses differentiation and the low-cost producer may not be enough to sustain sales.

Answer 3

True

Question 4

The only thing a firm needs to do in order to succeed is focus on customer value.

Question 5

One has only to build a business plan at the start of the business. This will guide the company for the foreseeable future.

Question 6

Research has found that there is little formal planning in firms with less than 5 employees.

Question 7

Strategic planning and strategic management is the same thing.

Question 8

A firm that pursues a Cost leadership strategy is one that always will have the lowest price in an industry.

Question 9

Strategic planning is seen as a series of techniques and tools enable organizations to be able to achieve their specific goals about objectives.

Question 10

The two major reasons for developing a comprehensive business plan is that the plan will be used to in operating the business and it's useful for securing external funds from the bank, a venture capitalist or other investments.

Question 11

IKEA would be an example of a firm using a focus-low cost strategy.

Question 12

An important issue with a cost-leadership strategy is that imitators narrow perceived differences.

Question 13

Strategic thinking is the creative analysis of the competitive landscape and a deep understanding of customer value.

Question 14

There are many good reasons for a startup company to build a business plan.

Question 15

There is a great deal of consensus on the exact meaning of the word strategy.

Question 16

The overwhelming consensus is that of business planning is not essential for small business.

Question 17

Identifying what constitutes customer value is of critical importance to a business.

Question 18

The large resources available to Fortune 500 firms mean that they will always be able to defeat, competitively, small and midsize businesses.

Question 19

An important issue with a focus-differentiation strategy is that competitors may find even smaller markets to focus on.

Question 20

Some of the reasons that small business owners do not engaging in developing a formal business plan are: they don't need to plan; they are too busy to plan; plans do not produce results and they're not familiar with the process of formal planning.

Question 21

There is no universal set of forecasting techniques that can be used in all types of small and midsize businesses.

Question 22

Government sources of information are not likely to be of much benefit in developing a business plan for a small business.

Question 23

A recent study found that there was a near doubling of successful growth for those businesses that completed business plans compared to those that did not create one.

Question 24

Plans for small businesses need only be created at the start of the business.

Question 25

Market research would be considered a qualitative forecasting method.

Question 26

Most Internet websites, including those that are government-run, require a fee for the information for the development of a small business plan.

Question 27

If you are seeking funding from banks then the bankers will initially focus on the financial component of your business plan.

Question 28

If the business plan projects of 75 percent profit margin, banks will be happy to lend money.

Question 29

Moving average would be considered a qualitative forecasting method.

Question 30

A business plan, even for a startup business, will require some form of forecasting.

Question 31

The business plan is only appropriate for a large corporation.

Question 32

The Internet provides a wealth of resources that can be used by small businesses to develop a business plan.

Question 33

Venture capitalists are not interested in earning returns substantially above those that are found in the market.

Question 34

Angel investors might expect a lower return than venture capitalists.

Question 35

One of the major reasons small businesses do not develop an initial business plan, let alone maintain a planning process, is that they don't perceive a need to plan.

Question 36

In the initial business plan there is no need to consider the audience who might read and fund the business.

Question 37

Exponential smoothing would be considered a quantitative forecasting technique.

Question 38

Your written business plan should be a product only of your own input.

Question 39

The key question in any initial business plan is "How much money am I going to make?"

Question 40

Qualitative forecasting methods assume that one either does not have historical data or that one cannot rely on past the store data.

Question 41

To begin a business, one should have a clear vision as to what constitutes value to the targeted customers.

Question 42

Three key financial statements that should be found in a business plan are: income statement, balance sheet and cash flow statement.

Question 43

Some of the core issues that should be thought of in an articulated strategy are

A) Profitability, tax rates, location and number of employees
B) Number of employees, costs, location and competitors
C) Labor costs, regulations, selection of lawyers and location
D) Selection of bankers, profitability, technology and labor costs
E) Who are your customers; how do you provide value; who are present and future competitors and what are your resources

Question 44

IKEA would represent a firm following which generic strategy?

A) Differentiation
B) Cost Leadership
C) Focus - Differentiation
D) Focus - Cost Leadership
E) None of the above

Question 45

What are ways a firm can "focus" its strategy?

A) Loyalty, differentiation, low cost and geographic area
B) Detailed planning, cost leadership, customer and differentiation
C) Cost advantage, value, product line and marketing
D) Product line, customer, geographic area and particular distribution channel
E) Low cost, loyalty, value and product line

Question 46

The use of website development and hosting tools, and tools such as social media, web store sales management, and customer relationship management are only appropriate for large corporations.

Question 47

There are several different computerized packages they can be used to assist in building a business plan for small business.

Question 48

Vision statements and mission statements are essentially the same thing.

Question 49

The use of scenario analyses can be helpful for small business when it identifies significant changes that might impact the business.

Question 50

There is no idealized structure for business plan or definite number of sections that it must contain.

Question 51

A thoughtful plan should eliminate assumptions or outcomes that cannot be supported after careful consideration or analysis.

Question 52

Regression analysis technique is so complex that it should never be used for small business.

Question 53

Balancing cash inflows with outflows is something that can be done in an ad hoc fashion.

Question 54

A major strategy theorist who is associated with four generic strategies is

A) Carl LaFong
B) Kenneth Arrow
C) Michael Porter
D) Kenichi Ohmae
E) Alfred Chandler

Question 55

Plans should force owners and managers to specifically articulate how they will serve their customer base.

Question 56

The word strategy comes from Greek and means

A) to decide
B) to act
C) the art of the general
D) to survive
E) victory

Question 57

Four generic strategies are

A) Cost leadership, appropriate technology, focus, and niche
B) Cost leadership, differentiation, focus-cost leadership, focus-differentiation
C) Lowest price, low technology, focus and diversification
D) Cost advantage, high technology, concentric diversification and product line
E) Cost advantage, diversification, niche market and automation

Question 58

A major reason for a business with employees to have an articulated strategy is so that employees can

A) repeat it to management to prove they are loyal
B) better assist in implementing the plan
C) repeat to all customers
D) tell it to bankers
E) repeat it company meetings

Question 59

A Tommy Hilfiger would represent a firm following which generic strategy

A) Differentiation
B) Cost Leadership
C) Focus - Differentiation
D) Focus - Cost Leadership
E) None of the above

Question 60

Which is not an excuse used by business owners to formally plan:

A) We do not need to plan.
B) We are too busy to plan.
C) Since events change, planning is futile.
D) Plans do not produce results.
E) We are not familiar with the process of formal planning.

Question 61

In evaluating business planning software one should consider the following factors except:

A) Cost
B) Ease of building report
C) Ability to do financial analysis
D) Sensitivity to platforms
E) Ability to import data from other sources

Question 62

One way for an organization to deal with significant changes is a process known as

A) Cash flow analysis
B) Business planning
C) Financial analysis
D) Scenario analysis
E) Kreigsspiel

Question 63

A forecasting technique that uses some data and simply makes a projection based on data is

A) Qualitative Forecasting
B) Regression
C) Simple Extrapolation
D) Delphi Technique
E) Exponential Smoothing

Question 64

What might someone do before they begin writing a formal business plan?

A) Buy business planning software
B) Hire a consultant
C) Write a personal plan
D) See their banker
E) Look up any venture capitalist in the neighborhood

Question 65

________________ is the creative analysis of the competitive landscape and a deep understanding of customer value.

Question 66

If you are seeking capital from an angel investor, the most likely item that an angel investor will seek in order to fund the business is:

A) collateral.
B) 75 percent of all future profits
C) a hands-off position in the operation of the firm.
D) a return that is higher than that expected from venture capitalist.
E) an innovative concept unexciting entrance into a new type of business.

Question 67

A forecasting technique takes recent class data for N number of periods, adds them together, and divides by the number N to produce a forecast is known as

A) Market Research
B) Regression
C) Moving Average
D) Delphi Technique
E) Historical Analogy

Question 68

The financial statement that covers overall profitability of a firm over a particular period of time is

A) Cash flow
B) Income Statement
C) Balance Sheet Statement
D) Ratio analysis
E) Current Liabilities

Question 69

If you are seeking capital from bankers, the most likely item that a bank will seek in order to fund the business is:

A) partial ownership with the business.
B) collateral.
C) 75 percent of all future profits.
D) a stock position in the firm.
E) a management position within the firm.

Question 70

A forecasting technique that uses of questionnaires and surveys to evaluate customer attitudes toward a product or a service is known as

A) Market Research
B) Regression
C) Simple Extrapolation
D) Delphi Technique
E) Historical Analogy

Question 71

When researching potential business opportunities which of the following should you NOT singularly rely upon?

A) Gut feelings
B) Government reports
C) Library resources
D) Internet sites
E) Commercial sources

Question 72

Research has found that there is little formal planning in firms with less than _______ employees.

Question 73

If you seeking capital from a venture capitalist, the most likely item that a venture capitalist will seek in order to fund the business is:

A) collateral.
B) returns that are substantially above those to be found in the market.
C) willingness to take a long-term perspective.
D) a modest return on their investment.
E) the management position within the firm.

Question 74

________________ is seen as a series of techniques and tools enable organizations to be able to achieve their specific goals about objectives.

Question 75

A forecasting technique where a panel of outside experts is asked to estimate sales for a particular product or service and the results would be summarized in a report and given to the same panel of experts for several iterations is known as

A) Qualitative Forecasting
B) Regression
C) Simple Extrapolation
D) Delphi Technique
E) Exponential Smoothing

Question 76

Which would NOT be a section in a business plan?

A) Cover page
B) Executive summary
C) Mission Statement
D) List of inventory items
E) Financial Projections

Question 77

Which of the following assumptions is key to quantitative forecasting models?

A) Numbers are meaningless.
B) You can project the future based on past data.
C) There is no need for any calculations.
D) Only salespeople know what future sales may be.
E) The future is uncertain.

Question 78

The forecasting technique attempts to correct forecasts by some proportion of the past forecast error is known as

A) Market Research
B) Regression
C) Moving Average
D) Exponential Smoothing
E) Historical Analogy

Question 79

Which of the following is NOT a reason given for small business failure?
a. Not determining cash flow
b. Not having the right connections
c. Inadequate capitalization
d. Not truly understanding the market
e. Unrealistic expectations

Question 80

A forecasting technique that finds a similar product's or service's past sales (life cycle) and extrapolates to your product or service is known as

A) Qualitative Forecasting
B) Regression
C) Simple Extrapolation
D) Delphi Technique
E) Historical Analogy