Certification in Supplier Diversity Practice Exam

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Which component of a business plan outlines potential threats?

Market strategy
Critical business risk
Management in human capital
Financial plan

The correct answer is: Critical business risk

B is the correct answer because the "Critical business risk" component of a business plan specifically identifies and outlines potential threats that could impact the company's operations and objectives. This section typically includes an analysis of risks related to market conditions, competition, operational vulnerabilities, financial stability, and regulatory compliance. By clearly articulating these threats, a business can develop strategies to mitigate the risks, prepare contingency plans, and enhance its resilience in a competitive environment. In contrast, market strategy focuses on how a company plans to reach and engage its target customers, management in human capital relates to the organization and development of personnel, and the financial plan centers around budgeting and financial forecasting. While these elements are crucial to a comprehensive business plan, they do not primarily address the identification and assessment of potential threats, which is the specific function of the critical business risk component.