ENT4934
Invading adjacent markets
entering a market that doesnt differ in cost structure, stakeholders, and required capabilities
Who is a serial entrepreneur
have multiple business ventures
cost leadership strategy
keep costs & prices low of broad products ex: Walmart
Lean Business Practices
lessen required capital & reduce cash outflows from the business -- renting, keeping in touch w customers, , standardizing
Focused cost leadership
narrow range of products & low prices ex: DGeneral
What is factor-driven economies
nations with little manufacturing have a lot of farming and extracting raw materials businesses
Retrenchment stage of ILC
new approaches must be made to improve business & chance of survival
Succesion
new owners from within or outside the owner family enter the business as owners & add new capital & resources that have consequences for firm processes & outcomes such as innovation, entrepreneurial orientation & growth
What is a heirs entrepreneur
people who inherit or are given a stake in the family business
What is a buyer entrepreneur
people who purchase an existing business
Resource Base Theory
possession of strategic resources provides an organization to develop a competitive advantage
Base retention
repeated customers increase profitability of existing customers more value in existing customers
Agency Problem III
shareholders & creditors
What is SME
small & medium enterprises - the international term for small business
What are the different terms for entrepreneurial small businesses
small & medium enterprises (SME) Independent small business Owner-managed firms
What is a franchisee entrepreneur
someone who buys or leases a franchise from a franchisor
Who is an entrepreneur
someone who owns a business and are self-employed
What is a founder entrepreneur
start the business whether is be new business or franchise
Forward vertical integration
supplier gets into industry
Argument against family firms
Nepotism Legacy Inheritance norms
Starting Cons
No initial name recognition Significant time & effort required Difficult to finance Lack of experience
Information asymmetry
the information gap between investor/buy & seller/startup
Corporate Governance
the reconciliation of conflicts of interest between various corporate claimholders
Family business
two or more family members exercise control
Bootstrapping
using low-cost or free techniques to minimize your cost of doing business -- no utilization of debt or equity
Resources in RBT must be
valuable rare difficult to imitate non substitutable (VRIO)
Market Share Gain
where the objective is to increase your number of customers relative to the total possible market and the competition.
What is innovation-driven economies
A large service sector providing high-end services to resident population & export
What is independent entrepreneurship
A person or group owns a for-profit business
What is the plan step of the entrepreneurial process
Getting idea to business by using part-time startups, lean business practice approaches, pilot testing, business modeling
What is efficiency-driven economies
Growing retail & wholesale sector that grows alongside business serving the needs of large industrial concerns
Franchising Pros
Having a fully developed system of doing business
Pro resources in family business
Human capital: well trained Social: connection in & outside fam Financial: use family $ to support business
Growth strategy of a lifestyle or part-time firm
- Sales of 25K or less - Stays small - Growth levels off quickly - What majority of business are
Growth strategy of a traditional small business
- Sales of 25K to 100K - Growth levels off after operations settle into a consistent money-making pattern
What is the overall growth strategy for high-performing small business
-100k to 1mil - Grow at rate of 5 to 15%
imitative strategies
cloning/franchising parallel comp (local)
Agency Problem I
conflict of owners & managers
Backwards vertical integration
Buyer gets into the industry
Agency Problem II
Controlling Family shareholders & noncontrolling shareholders
What is CSI entrepreneurship
Corporate Social Independent
Growth Stage of ILC
Customer purchases increase at a dramatic rate
Starting Pros
Do it your way Begin with a clean slate Provide different/unique products
Maturity stage of ILC
Stabilization of demand
What are the five paths to business ownership
Starting Purchasing Buying Working Inheriting
Arguments for family firms
Substitution: trust subd Human capital: transfer knowledge easier Politics: easier to maintain politics
What is social entrepreneurship
The creation of self-sustaining charitable & civic organizations, for-profit organizations that invest in charitable activities
What is the overall growth strategy for high-growth ventures?
- $1mil + - Growth rates of 25% +
What are the core principles of effectual reasoning
Affordable loss Strategic partnership Leveraging of contingencies
Bricolage
Analyzing the resources available & creating a product or service from them
Effectual Reasoning
Analyzing the resources available to create an attainable goal
market positioning
Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
Porter's 5 Forces
Bargaining power of suppliers Bargaining power of Buyers Threat of New Entrants Threat of Substitution
What are the entry competencies
Boundary Resources Intention Exchange
What is the feel step of the entrepreneurial process
Entrepreneur has a feeling about starting a business or creating a product
Inheriting Pros
Establish Customers Immediate sales Cash Inflow
Buying Pros
Established customers immediate sales & cash inflows
Inheriting Cons
Family education Assuming family responsibilities
Agency problem IV
Family shareholders & family outsiders
What are the four steps of the entrepreneurial process
Feel Check Plan Do
Buying Cons
Finding a successful business for sale Information asymmetry
What is corporate entrepreneurship
Form of entrepreneurship that takes place in existing business around new products, services, or markets
What are the different types of entrepreneurs
Founders Franchisee Buyers Heirs
Innovation Strategies
Incremental (base on others) Pure/blue ocean
Industry Life Cycle
Intro Growth Maturity Decline Retrenchment
How can information asymmetry affect entrepreneurship
Investors will invest in legitimate firms over new businesses & investors has less information than owners so perseverance is important to earn external financing
Franchising Cons
Legal considerations
Cons resources in family business
Low human capital: few skills bc of nepotism Low social: distrust outside fam Low financial: using fam $ for own interest
What are the five Ps of entrepreneurial behavior
Passion Perseverance, Promotion/Prevention focus, Planning style Professionalization
What is the do step of the entrepreneurial process
Refining approach until successful
Decline stage of ILC
Sales & profits fall
Casual (predictive) reasoning
Setting a goal and determining the strategy & goals to attain it
What is the check step of the entrepreneurial process
Smart entrepreneurs check the likelihood or success of their idea
focused differentiation strategy
Unique products but not for everyone. ex: Anthropologie
Differentiation
Uniqueness of products for broad target ex: Nordstrom
sustainable competitive advantage
VRIO
Agency theory
When owners & managers are aligned there are few agency costs bc of low neglect, opportunism, adverse selection & moral hazard
Independent small business
a business owned by an individual or small group
Owner-managed firms
a business run by the individual who owns it
Intro stage of ILC
a few firms, small sales, customers are unaware of product offerings