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Chapters 5 and 6 Key Points

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September 11, 2022

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Chapters 5 and 6 Key Points

Chapter 5

1. ascertain a company's capacity for effective industry competition.

2. Important success factors: elements that affect a company's capacity for industry

competition

3. A CPM allows business owners to evaluate their organizations against major

competitors using the key success factors for just that market segment.

4. Balanced scorecards provide managers with a quick but complete image of a firm's

overall presentation, which are multidimensional measurements specific to a

corporation and includes operational and financial measures.

5. The value proposition is the competitive advantage that distinguishes a small

company from its rivals and grants it a superior position in the market.

I have learned about the Benefits of Creating a Business Plan, Building a Competitive

Advantage, five Cs of credit, Strategic Management Process, Making & Building a Strategic

Plan, and competitive profile matrix. I now know that organizations employ a variety of

models and tools, the competitive profile matrix being among the most well-liked by

practitioners. It allows entrepreneurs to compare their organizations and primary rivals using

crucial success factors. CPM makes it possible to assess rivals' relative advantages and

disadvantages, enabling the development of a winning competitive strategy. All competitors

are compiled into a straightforward one-page matrix, which makes it simple to compare the

various businesses visually. (Scarborough & Cornwall, 2019)

I plan to use this in my work for starting a business. Crafting the business and strategic

plan will help me describe a plan for launching my business. Additionally, it details the steps

to be taken, the resources required to reach the business goals, and a timeline of anticipated
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results. Companies with plans expand 30% faster than those without plans. (Scarborough &

Cornwall, 2019)

Chapter 6

1. A corporation is different from a sole proprietorship and a partnership because it exists as

a separate legal entity from the individuals who own it.

2. Managers and employees try to borrow money to buy the business through leveraged

buyouts.

3. Corporate governance is the procedure and set of rules that govern how an organization

deals with its internal and external stakeholders.

4. Cooperatives are businesses that their members and clients own. Small businesses

frequently establish cooperatives to increase purchasing, marketing, or product

development power.

5. Shareholders who make financial investments in the company by purchasing stock shares

are the owners of corporations. The percentage of stock they own determines how much

of the corporation they own. (Poff, 2020)

I have learned about the forms of ownership and the advantages and disadvantages of all

forms. The most notable advantage of incorporation is the limited liability to which

shareholders have been exposed: they are not responsible for the corporation's obligations.

They may lose not more than the quantity they have personally invested in the corporation.

Additionally, incorporation enables businesses to raise money through the sale of stock. It is a

significant benefit as a business expands and requires more funding to function and compete.

(Scarborough & Cornwall, 2019)

I plan to use this in my work in the best business entity for their organization should be

one of the initial choices a business or a professional owner must make. This choice has far-
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reaching legal and tax repercussions, making it crucial when starting a business. The

company will be able to save time, minimize errors, and increase productivity by having the

appropriate business forms. On their business tax forms is one area where businesses want to

get rid of mistakes. Safeguard provides many businesses tax forms, including 1099s, W2s,

and others. (Scarborough & Cornwall, 2019)

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References

Poff, A. by S. S. with R. (2020). Chapter 6 Forms of Business Ownership.

Pressbooks.lib.vt.edu.

https://pressbooks.lib.vt.edu/fundamentalsofbusiness3e/chapter/chapter-6-forms-of-

business-ownership/

Scarborough, N. M., & Cornwall, J. R. (2019). Essentials of Entrepreneurship and Small

Business management. (9th ed.). Pearson.