A study aimed to determining the reasons for success or failure of small business. A sample of 5o entrepreneurs was asked to indicate the perceived areas of strength of their organizations. Their responses identified 7 variables rated on five point scale.

Five-point Scale

Organizational Strength	Code
Very strong	5
Strong	4
Natural/Normal	3
Weak	2
Very weak	1

 

Variables

V1 = Location of the Firm

V2 = Product Quality

V3 = Pricing of the Product

V4 Customer Service

V5 = Innovation in Product

V6 = Cost Control

V7 =Employee Productivity

Questions:

1.Conduct a factor analysis to identify the reasons for success or failure of small business

2.Determine the variance summarized by the extracted factors.

3.Interpret the communalities of each of the variables.

3.What are the implications for the decision-maker in this case?

NOTE: Please go through the annexure file for the data(Success and Failure of Small Business data).