Business Objectives and Strategies Quiz

What is meant by "survival" as a business objective?

• Expanding market share rapidly

• Generating maximum profit in the short term

• Ensuring the business continues to operate, especially in tough conditions

• Increasing dividends for shareholders

Why might a business prioritize survival over profit maximization?

• To increase dividends for shareholders

• To avoid high taxation on profits

• Due to economic downturns or intense competition

• Because survival is always more important than profit

Which of the following is most likely to help a business survive in its early stages?

• Cutting prices to unsustainable levels

• Managing cash flow effectively

• Ignoring competitors

• Investing all profits into expansion

A firm that prioritizes profit maximization aims to:

• Generate the highest possible revenue

• Achieve the highest possible difference between total revenue and total costs

• Reduce prices to increase sales volume

• Focus only on short-term financial goals

In the long run, businesses that only focus on survival may struggle because:

• They fail to adapt to changing market conditions

• They do not reinvest in growth and innovation

• Competitors may take over market share

• All of the above

Which of the following business structures is most likely to focus on survival over profit maximization?

• Sole traders

• Public limited companies (PLCs)

• Multinational corporations

• Large retail chains

Profit maximization can be achieved by:

• Increasing revenue while reducing costs

• Lowering prices indefinitely

• Expanding into multiple markets without assessing risks

• Ignoring cost-cutting measures

Which external factor can threaten a business’s survival?

• Strong financial management

• High customer satisfaction

• Economic recession

• Competitive advantage

A business facing financial difficulties should focus on which strategy to ensure survival?

• Ignoring cash flow management

• Cutting unnecessary expenses and improving efficiency

• Expanding aggressively despite losses

• Selling products at a loss permanently

How does profit maximization benefit a business in the long term?

• Allows for reinvestment in innovation and expansion

• Reduces the need for business planning

• Ensures competitors cannot enter the market

• Guarantees survival in all circumstances