Entrepreneurship Ch. 7
Niche market
A narrowly defined segment of the population that is likely to share interests or concerns
Retrenchment
An organizational life cycle stage. Established firms must find new approaches to improve the business and its chances for survival
Cost Strategy
A generic strategy aimed at mass markets in which a firm offers a combo of cost benefits that appeals to the customer
Perceptual map
A graphic display which positions products, services, brands, or companies according to their scores on important strategic dimensions
Industry analysis
A research process that provides the entrepreneur with key info about the industry, such as its current situation and trends
Blue Ocean Strategy
A strategy based on creating a new product or service which has no competitors
Competitor
Any other business in he same industry as yours
Differentiation Strategy
Aim at clarifying how one product is unlike another in a mass market
Maturity stage
Third life cycle stage. marked by a stabilization of demand, with firms in the industry moving to stabilize or improve profits through cost strategies
Industry dynamics
Changes in competitors, sales and profits in an industry over time
Strategic Actions
Competitive responses requiring a major commitment of resources
Tactical Actions
Competitive responses with low resource requirements
Scope
Defines the geographic range covered by the market - from local to global
Imitative Strategy
Entrepreneur does more or less what others are already doing
Gross profit
Funds left over after deducting the cost of goods sold
Profit before taxes
Profit earned by a business before calculating the amount of income tax owed
Decline stage
Sales and profits of the firms in the industry begin a falling trend
Scale
Size of the market - a mass market or niche market
Shake Out
Stage following a boom in which there is a rapid decrease in the number of firms in an industry
Focus Strategy
Targets a portion of the market, called a segment or niche
Introduction stage
The life cycle stage in which the product or service is being invented and initially developed
Competitive Advantage
The particular way a firm implements customer benefits that keeps the firm ahead of other firms in the industry
Magic Number
The post-tax income the entrepreneur personally seeks from the business
Pure Innovation
The process of creating new products or services, which results in a previously unseen product or service
Generic Strategies
Three widely applicable classic strategies for businesses of all types -- Differentiation, Cost and Focus
Mass market
A customer group that involves large portions of the population
Incremental Innovation
A firm patterns itself on other firms with the exception of one or two key areas
Innovative Strategy
A firm seeks to do something that is very different from what others in the industry are doing
Parallel Competition
An imitative business that competes locally with others in the same industry
Goal
An intended outcome for your business
Entry Wedge
An opportunity that makes it possible for a new business to gain a foothold in a market
Growth stage
Industry life cycle stage in which customer purchases increase at a dramatic rate
Net profit
The amount of money left after operating expenses are deducted from the business
Market
The business term for the population of customers for your product or service
Degree of similarity
The extent to which a product or service is like another
Industry
The general name for the line of product or service being sold, or the firms in that line of business
Boom
Type of life cycle growth stage marked by a very rapid increase in sales in a relatively short time