Types of Ownership
Which type of ownership fits a small, independently owned neighborhood bookstore?
Independent Retailer
What type of service would renting a car for vacation fall under?
Rented-Goods Service
Buying through websites like Lazada is an example of what type of retailing?
Online Retailing
What business form applies when a single person starts a food cart?
Sole Proprietorship
What makes organizing a sole proprietorship easier than organizing a corporation?
Less legal paperwork, fewer regulations.
Why might an entrepreneur choose franchising instead of starting a completely new brand?
To benefit from an established brand and proven business system.
How are rented-goods services and owned-goods services different in customer experience?
Rented-goods involve temporary usage; owned-goods involve maintaining customers' own property.
What makes telemarketing different from direct selling?
Telemarketing is phone-based; direct selling is face-to-face.
Why do some small business owners prefer partnerships over sole proprietorships?
More capital, shared workload, different skills.
How does limited liability benefit corporate shareholders compared to partners in a partnership?
Shareholders are only responsible for their investment; partners are liable for all debts.
If a retail company owns 50 stores managed under one system, how would you classify it?
Corporate Chain
If you opened a store that only sells high-end sneakers, what type of store are you creating?
Specialty Store
Suggest a place where an automatic vending machine could earn high profits.
Airports, bus terminals, universities.
If a company's profits must be shared among thousands of investors, what type of ownership is it?
Corporation
If your partner specializes in accounting and you specialize in marketing, what business advantage does this create?
If your partner specializes in accounting and you specialize in marketing, what business advantage does this create?
Compare franchising and corporate chains. How are control and ownership different?
In franchising, franchisees own individual units; in corporate chains, stockholders own the entire organization.
Why might a supermarket combine grocery and pharmacy services under one roof?
To maximize customer convenience and increase sales opportunities.
What are the risks of relying only on direct selling for your business?
Limited customer reach, time-consuming, depends heavily on salesperson’s skill.
How does personal liability differ between a partnership and a corporation?
Partners have unlimited liability; corporation shareholders have limited liability.
How does customer trust affect the success of non-store retailing businesses?
Lack of trust reduces sales and brand loyalty.
Which ownership type—independent, franchising, or corporate chain—offers the best chance for quick market expansion? Support your answer.
Corporate Chain; allows rapid expansion with centralized control and financing.
Between catalog showrooms and specialty stores, which model would survive better in today’s online world? Justify.
Specialty stores; catalog showrooms have been largely replaced by online catalogs.
Evaluate why some customers might still prefer traditional in-store shopping over non-store retailing methods, even if non-store options are more convenient.
Customers may prefer traditional stores for reasons like wanting to physically inspect products, immediate purchase without delivery wait times, personalized customer service, and distrust of online transactions.
If you want to open a nationwide retail chain, which form of business ownership would be most strategic? Justify your answer.
Corporation; easier to raise large capital, offers business continuity.
Which disadvantage of non-store retailing—security issues, advertising costs, or customer trust—is the most critical to solve first? Explain.
Customer trust; without trust, there will be no sales regardless of other factors.