Question 1

Refer to the following information to answer the question(s) below:
Describing her company's revolutionary design for a bottle cap, Kyoto says, "It has a special locking mechanism that you know is engaged when a red panel is showing through this little window on top of the cap. If you want to keep unauthorized hands-for instance, those of children-from opening the bottle, you engage the locking mechanism. Unlike other childproof caps, however, this design does not frustrate adults who might have arthritis and elderly people whose grip may not be as strong as it once was."Removing the cap from the bottle in no time with just a few turns, Kyoto says, "They can open the cap quite easily by disengaging the locking mechanism this way ... see? You get the safety of a childproof cap without the problems most adults have getting them off!"
-The fact that with Kyoto's new cap "you get the safety of a childproof cap without the problems most adults have getting them off" is a ________ of the product.

Accepted Answer

The statement describes a benefit of the product, as it highlights how the cap provides safety for children while also being easy for adults to open.

Question 2

Defining the company's target market, its characteristics, and its potential is part of which element of the business plan?

Accepted Answer

Defining the target market, its characteristics, and potential is part of the marketing strategy section of the business plan.

Question 3

Which of the following would be included in the description of the product or service section of the business plan?

Accepted Answer

All of the options listed would be appropriate to include in the description of the product or service section of a business plan. The position of the product in the product life cycle can help investors understand the stage of development and potential growth for the product. A summary of any patents, copyrights, or trademarks can demonstrate the uniqueness of the product and its competitive advantage. Finally, a description of the features and benefits of the product or service is crucial to convincing potential investors or customers to purchase it.

Question 4

In the business strategy section of the business plan, the entrepreneur should explain to investors:

Accepted Answer

The business strategy section should focus on how the entrepreneur plans to achieve the company's goals and objectives, which is critical for investors to understand the strategic direction and execution plan.

Question 5

When formulating a marketing strategy, small companies usually are most successful when they:

Accepted Answer

Small companies typically have limited resources, so it is difficult to compete with larger rivals in terms of pricing, advertising and distribution. By focusing on a particular market niche, however, small companies can excel at meeting the specific needs and wants of their target customers which can lead to greater success. Trying to be everything to everybody is not a viable strategy as resources would be spread too thin, and imitating the market leader doesn't differentiate the small company from its competitors.

Question 6

The section that describes "how to get there" and describes a competitive edge that sets the business apart is referred to as the:

Accepted Answer

The section that outlines how the business plans to get to its goals and identifies a unique advantage over competitors is known as the business strategy. The executive summary is a brief overview of the entire business plan, while the industry profile provides information on the broader market and key players. A vision statement outlines the company's aspirations and long-term goals.

Question 7

The loan proposal section of a business plan should include all but which of the following?

Accepted Answer

A loan proposal should include a specific dollar amount being requested, not a general request for funds.

Question 8

________ are short-term, specific targets which are attainable, measurable, and controllable.

Accepted Answer

Objectives are short-term, specific targets which are attainable, measurable, and controllable. Policies refer to guiding principles or rules, goals are long-term and broad aspirations, and standard operating procedures refer to established procedures for carrying out specific tasks within an organization.

Question 9

Which of the following questions will probably not be addressed in the marketing strategy section of the business plan?

Accepted Answer

The marketing strategy section of a business plan focuses on the company's target market, how to reach and sell to them, and how to position the company in the market. Exit policies are typically addressed in the financial section or investor relations section of the business plan.

Question 10

The form of ownership under which a company is organized appears in which section of the business plan?

Accepted Answer

The form of ownership falls under the Plan of Operation section of the business plan as it deals with how the company will be structured and operated. The Marketing Strategy, Business Strategy, and Mission Statement sections are focused on different aspects of the company's goals and operations.

Question 11

Proving that a profitable market exists involves:

Accepted Answer

Proving that a profitable market exists involves both proving that customers in the marketplace need or want the good or service and are willing to pay for it (A) and documenting claims about market size and growth rates with as much factual information as possible (B). Making claims without factual information (C) is not sufficient evidence of a profitable market.

Question 12

An explanation of how the product will be distributed is contained within the ________ section of the business plan.

Accepted Answer

The distribution of the product is a critical part of the marketing strategy. The marketing strategy section of the business plan will outline how the product will be distributed to customers.

Question 13

A ________ is a descriptive fact about a product or service; a ________ is what the customer gains from that characteristic.

Accepted Answer

A feature is a characteristic of a product or service, while a benefit is what the customer gains from that characteristic. For example, a laptop may have a feature of a long battery life, but the benefit to the customer is that they can use the laptop for an extended period of time without needing to recharge it.

Question 14

What is the lesson to be learned about writing a business plan from Leo Burnett's statement, "Don't tell people how good you make the goods; tell them how good your goods make them?"

Accepted Answer

Leo Burnett's statement highlights the importance of communicating the benefits that customers will derive from using the company's products or services, rather than simply focusing on their features. A good business plan should describe how the business will transform tangible product or service features into important, but often intangible, customer benefits. This is key to convincing investors, partners, and other stakeholders that the business is worth investing in or supporting.

Question 15

Which of the following would be considered a benefit of Kyoto's new cap?

Accepted Answer

Option A and B describe features of the cap but do not mention any benefits. Option C, however, states that the cap provides the safety of a childproof cap without the difficulty most adults have in opening them, which is a clear benefit. Option D is incorrect as it includes options A and B, which are not benefits.

Question 16

The organization chart is described in which section of the business plan?

Accepted Answer

The answer of The organization chart is described in which...

Question 17

Refer to the following information to answer the question(s) below:
Describing her company's revolutionary design for a bottle cap, Kyoto says, "It has a special locking mechanism that you know is engaged when a red panel is showing through this little window on top of the cap. If you want to keep unauthorized hands-for instance, those of children-from opening the bottle, you engage the locking mechanism. Unlike other childproof caps, however, this design does not frustrate adults who might have arthritis and elderly people whose grip may not be as strong as it once was."Removing the cap from the bottle in no time with just a few turns, Kyoto says, "They can open the cap quite easily by disengaging the locking mechanism this way ... see? You get the safety of a childproof cap without the problems most adults have getting them off!"
-The special locking mechanism on Kyoto's new cap is a ________ of the product.

Accepted Answer

The special locking mechanism is a feature of the product, as described in the statement. While it does provide benefits (such as child safety and ease of use), it does not meet the criteria for a unique selling proposition, which is a statement that sets a product apart from its competitors in a unique way.

Question 18

The plan of operation of the company within the business plan should detail:

Accepted Answer

The answer of The plan of operation of the company...

Question 19

When creating financial forecasts in a business plan for a proposed venture, an entrepreneur should:

Accepted Answer

Financial forecasts in a business plan should be as realistic as possible to avoid misleading investors or lenders. Overly optimistic forecasts may lead to unrealistic expectations and poor investment decisions. It is important to base financial projections on sound assumptions and data analysis to create a credible and reliable business plan. Furthermore, listing previous loans in default is not necessary when creating financial forecasts for a proposed venture.

Question 20

The focus of the competitor analysis section of the business plan is on:

Accepted Answer

The focus of the competitor analysis section of the business plan is to demonstrate your company's advantage over competitors by researching and analyzing the strengths and weaknesses of your competitors, identifying their target market, and understanding their pricing and marketing strategies. This information can be used to develop strategies to differentiate your product or service and gain an advantage in the market.

Quiz 4: Conducting a Feasibility Analysis and Crafting a Winning Business Plan