Business Management Capstone (QGT1)

Correct Answer

C. Protection from personal liability

Explanation

One of the primary benefits of forming an LLC for a food truck business is the protection it offers from personal liability. This means that the personal assets of the business owners (members) are generally shielded from business debts and liabilities. If the business incurs debt or is sued, the owners' personal assets (like their home or car) are typically not at risk.

Why Other Options Are Wrong

A. No access to business structure benefits

This is incorrect because LLCs do provide significant business structure benefits, such as flexibility in management and protection from personal liability.

B. Higher filing fees than a partnership

While LLCs may have filing fees that are higher than those of partnerships, this is not a primary benefit. The key advantage of an LLC is the protection from personal liability, not the fee structure.

D. Unlimited personal liability

This is incorrect because one of the main advantages of an LLC is that it limits personal liability. Unlimited personal liability is associated with sole proprietorships or general partnerships, not LLCs.

Correct Answer

B. Flat management structure

Explanation

A food truck business typically operates with a flat management structure, where the hierarchy is minimal, and decision-making is more direct and flexible. This structure is ideal for small businesses that need quick decisions and open communication between the owner and the team. Employees often take on multiple roles, and the owner or manager is directly involved in daily operations.

Why Other Options Are Wrong

A. Hierarchical management structure

A hierarchical structure involves multiple levels of management with a clear chain of command, which is more common in larger organizations. A food truck business typically has fewer layers of authority due to its small size.

C. Functional management structure

A functional structure divides the business into different specialized functions, such as marketing, finance, and operations. While some food trucks may have functional roles, they typically do not require such a rigid structure due to the smaller, more flexible nature of their operations.

D. Matrix management structure

A matrix structure involves dual reporting relationships, where employees report to more than one manager. This type of structure is usually seen in large organizations with complex projects. Food trucks, however, operate on a simpler, more straightforward management system.

Correct Answer

D. Strengths, Weaknesses, Opportunities, and Threats

Explanation

The SWOT analysis in a business plan assesses Strengths, Weaknesses, Opportunities, and Threats. This framework helps businesses identify internal strengths and weaknesses, as well as external opportunities and threats in the market. It is a key tool for strategic planning and decision-making.

Why Other Options Are Wrong

A. Systems, Workloads, Outcomes, and Trends

This is incorrect because these elements are not part of the SWOT analysis. The SWOT analysis specifically focuses on strengths, weaknesses, opportunities, and threats, not on systems or outcomes.

B. Sales, Workforce, Operations, and Technology

This is also incorrect because the SWOT analysis is not limited to these areas. While these topics may be relevant to a business plan, they do not directly correspond to the four elements of a SWOT analysis.

C. Strategies, Workflows, Objectives, and Targets

This option is incorrect because these elements relate more to the operational and strategic planning of the business. The SWOT analysis focuses on internal and external factors rather than specific strategies or objectives.

Correct Answer

A. Managing all day-to-day operations of pastry and kitchen sections

Explanation

One of Michael Salazar's key responsibilities is managing all day-to-day operations of the pastry and kitchen sections. This includes overseeing the preparation of food, maintaining the kitchen’s organization, and ensuring smooth operations in these areas.

Why Other Options Are Wrong

B. Evaluating performances of marketing campaigns

This is incorrect because evaluating marketing campaigns is a marketing role, not a kitchen role. Michael Salazar is involved in kitchen operations, not in evaluating marketing campaigns.

C. Payroll processing

This is incorrect because payroll processing is typically handled by the accounting or HR team, not the kitchen staff. Michael Salazar's responsibilities are focused on kitchen operations, not payroll.

D. Managing customer relationships

This is incorrect because managing customer relationships is a customer service or marketing responsibility, not a kitchen role. Michael Salazar’s main focus is on the operations within the kitchen and pastry sections.

Correct Answer

B. To apply interdisciplinary knowledge to real-world business challenges

Explanation

The primary objective of the MGMT330 Business Capstone course is to bridge the gap between theory and practice. By applying interdisciplinary knowledge to real-world business challenges, students learn how to integrate concepts from various business disciplines to solve complex problems. This practical approach prepares students for the diverse challenges they will face in the business world.

Why Other Options Are Wrong

A. To focus solely on theoretical business concepts

While theory is important, the focus of the MGMT330 course is on applying that theory to real-world situations, rather than purely theoretical discussions.

C. To teach students how to write business plans

While business plans may be a component of the course, the core focus is on solving business problems by applying broad business knowledge, not just writing plans.

D. To prepare students for careers in finance only

The course prepares students for broader business challenges across various fields, not just finance, by focusing on interdisciplinary knowledge and problem-solving skills.

Correct Answer

D. Offering catering services for events.

Explanation

Offering catering services for events presents a strong opportunity for food trucks to expand their customer base. By catering to events such as weddings, corporate gatherings, or festivals, food trucks can reach a broader audience beyond their regular street-side locations. This expansion allows them to tap into new customer segments and generate additional revenue streams while promoting their brand.

Why Other Options Are Wrong

A. Increasing the number of food trucks in the area

While increasing the number of food trucks in a given area might make food more accessible, it could also lead to increased competition. More food trucks could dilute the customer base and spread resources thinner, especially in locations with limited foot traffic.

B. Reducing menu prices significantly

While lowering prices might attract more customers in the short term, it could harm the sustainability and profitability of the business in the long run. Food trucks need to maintain reasonable prices to cover costs and ensure a quality product, so significantly reducing menu prices may not be a sustainable growth strategy.

C. Limiting the types of food offered

Limiting the menu could restrict the customer base rather than expand it. A diverse menu allows food trucks to appeal to a wider audience with varying tastes, so focusing on fewer types of food might reduce the overall appeal and customer interest.

Correct Answer

C. Employees of local manufacturing industries

Explanation

During the workweek, the target market for the food truck is primarily employees of local manufacturing industries. These workers often have limited lunch options and may be looking for a quick, affordable, and satisfying meal. Food trucks in industrial areas cater to this group by offering convenient food during lunch breaks.

Why Other Options Are Wrong

A. College students

While college students are a significant food truck demographic, they are more likely to be a target market during evenings or weekends when they are not in class or on campus. During the workweek, the food truck focuses more on local workers rather than students.

B. Retired individuals

Retired individuals may prefer more leisurely dining options or may not frequent food trucks as much as working professionals during the workweek. The food truck is more likely to serve those who need a quick, on-the-go meal during their working hours.

D. Tourists visiting the area

Tourists typically frequent food trucks during travel or exploration periods, which are usually weekends or holidays. During the workweek, the food truck is more likely to focus on local employees rather than tourists.

Correct Answer

C. Social media, local radio ads, flyers, personal phone calls, and word of mouth

Explanation

The food truck will utilize a comprehensive approach to advertising by employing a variety of promotional methods. Social media helps the truck reach a wide audience and engage with customers directly, while local radio ads allow for targeted advertising to the community. Flyers are effective in distributing information at local events or locations, and personal phone calls provide a more personalized touch for businesses with regular customers. Word of mouth remains one of the most powerful forms of advertising, with happy customers sharing their positive experiences.

Why Other Options Are Wrong

A. Only personal phone calls and flyers

While personal phone calls and flyers can be effective, relying solely on these methods would limit the food truck's visibility. Social media and other platforms would help broaden its reach and appeal to a larger customer base.

B. Only local radio ads and word of mouth

Although local radio ads and word of mouth are valuable tools, this option ignores the potential of social media and flyers to engage more customers. Using just these two methods would limit the effectiveness of the promotional campaign.

D. Only social media and flyers

While social media and flyers are key promotional tools, relying only on these methods would miss out on the personal touch of phone calls and the local reach of radio ads. A combination of multiple promotional methods increases the chances of success in reaching different customer segments.

Correct Answer

D. $8,150

Explanation

The total monthly operating expenses for the food truck are $8,150. This includes all costs associated with running the business, such as supplies, permits, salaries, and maintenance of the food truck. Keeping track of these expenses is crucial to ensuring that the business remains profitable and can cover its operational costs each month.

Why Other Options Are Wrong

A. $9,000

A monthly operating cost of $9,000 would be too high given the nature of the food truck business. This amount could be unsustainable for a new business and might affect the truck's profitability.

B. $7,500

While $7,500 could be a feasible operating cost, it does not align with the specific details provided in the business plan. The correct operating expenses are higher than this figure, at $8,150.

C. $6,800

$6,800 is lower than the actual operating expenses. If the costs were this low, it could indicate that the food truck is not fully factoring in all necessary expenses for running the business, such as labor, permits, or maintenance.