MGMT 470 exam 3
mass market
involves large portions of the population- a broad approach that targets the entire market
KPIs
key performance indicators; measures or metrics that identify the outcomes that are most important to the success of the business
bootstrapping
using low-cost or free techniques to minimize your cost of doing business; maximize the value of low costs by obtaining free expertise
co-branding
when two companies or brands combine to make a new product or service that combines both brands (Nike's Lebron shoes)
business format franchising
an agreement that provides a complete business format, including trade name, operational procedures, marketing , and products/services to sell
conversion franchising
an agreement that provides an organization through which independent businesses may combine resources
trade name franchising
an agreement that provides only the rights to use the franchisor's trade name and/or trademarks
primary research
an approach to researching based on the gathering of new information, using techniques such as interviewing, surveying, and observation
secondary research
an approach to researching based on the use of existing information, often from government, commercial, surveying, and observation
entry wedge
an opportunity that makes it possible for a new business to gain a foothold in the market
incremental innovation
an overall strategic approach in which a firm patterns itself on other firms, with the exception of one or two key areas in which you seek to do things in a new way
intangibles
assets, such as patents or trademarks, and liabilities, such as accounts payable, that have no physical existence
primary goal for due diligence
attempt to find any wrongdoing (fraud, misrepresentations, or missing information) and trying to find any insufficiencies, unnoticed opportunities, waste, and mismanagement
get customers
awareness, interest, consideration, purchase
shared media
called word of mouth of referral advertising; promotional mentions of your brand, firm, product, or service made by customers and others posted through social media
comparable sales of other firms
commonly used to estimate the value of a business
owned media
promotional materials directly and wholly owned by your company
product distribution franchising
provides the franchisee with specific brand name products, which are resold by the franchisee in a specific territory
earned media
public relations and press relations ("free ink"); when other organizations talk about you, your firm, or products sold and you did not pay for the mentions
blue ocean strategy
pure innovation; a strategy based on creating a new product or service that has no competitors
grow customers
referrals, cross-sell, up-sell, unbinding
Bricolage
refers to the process of analyzing the resources available and creating a product or service for them; making something from whatever you have at hand
value proposition
small business owners' unique selling points (also known as benefits) that customers can expect from your goods or services, including benefits that differentiate your offering from those of the competition
maturity stage
stabilization of demand, which firms in the industry moving to stabilize or improve profits through cost strategies
shake-out stage
stage following a boom in which there is a rapid decrease in the number of firms in an industry- many firms shut down
industry analysis
studying the dynamics and trends of the industry
legitimacy
the belief that a firm is worthy of consideration or doing business with because of the impressions or opinions of customers, suppliers, investors, or competitors
replacement value
the cost to acquire and prepare an essentially identical asset
key resource acquisition
also called bulk asset purchases, the only way a sole proprietorship can be purchased; compromise purchasing only the assets of the business
tangibility
an item's capability of being touched, seen, tasted, or felt
keep customers
product updates, loyalty programs, customer check-in calls, customer satisfaction surveys
me-too enterprise
products are essentially similar to something already on the market; customers are familiar, some protection from failure with only competitive advantage being location
introduction stage
the first stage where the product or service is being invented and initially developed
break-even
Costs and expenses equal to income revenues
elevator pitch
a 30 second (100 words or less) action-oriented description of the business designed to sell the idea of the business to another
operational plans
a business plan designed to be used internally for management purposes; to be used as working documents within a business on detailed specifications of techniques, etc
spin-off
a business that is created by separating part of an operating business into a separate entity
scope
a characteristic of a market that defines the geographic range covered by the market- from local to global
scale
a characteristic of a market that describes the size of the market- a mass market or a niche market
synergy
a combination in which the whole is greater than the sum of its component parts; business results are greater than the sum of the input
heuristics
a commonsense rule; rule of thumb used to estimate firm value in some relation to some easily observable characteristics of the business
cost strategy
a generic strategy aimed at mass markets in which a firm offers a combination of cost benefits that appeals to the customer
focus strategy
a generic strategy that targets a portion of the market (segment or niche)
effectuation
a logical process in which one analyzes the resources available and restraints on the use of resources to create an attainable goal
niche market
a narrowly defined segment of the population that is likely to share interests or concerns
mission statement
a paragraph that describes the firm's goals and competitive advantages
brand ambassador
a person who represents your brand, company, product, or service to others to increase brand awareness, sales, and positive attitudes among the public
co-marketing
a type of media partnership where two products jointly pay to advertise together; usually this is when customers use the two products together (like chips and salsa)
vision statement
a very simple 5-10 word sentence of tagline that expresses the fundamental idea or goal of the firm
business incubators
a workspace created to offer startups and new ventures access to resources needed; often leasing spaces, etc
lean business practices
addresses the specifics of new business creation, particularly Internet-based businesses, where rapid experimentation and constant monitoring of viewers' choices are possible; eliminates waste and produces a minimum viable product
steps for performing due diligence
conduct extensive interviews with sellers of the business, study financial reports, make a personal examination of the site of the business, interview customers and suppliers of the business, and develop a detailed business plan for acquisition
augmented product
core product features that tend to differentiate it from the competition ex) brand names, quality levels, packaging, etc
pivot
describes the change of direction in the thinking of an entrepreneur of a firm, often based on new data or other findings
retrenchment stage
established firms must find new approaches to improve business and its chances or survival
keys to customer relationship management
gathering data on current or prospective customers and analyzing the data in order to promote customer interest and loyalty
industry
general name for the line of product or service being sold, or firms in that line of business
paid media
generally referred to as bought or paid advertising, paid promotions where your firm pays another for the placement and distribution of the material
customer development funnel
get customers, grow customers, keep customers
altruism
if your product helps the community, a group, the environment, or the world, it is a benefit
operating margin
income from operations as a percent of net sales
business life cycle
introduction stage, growth stage, shake-out stage, maturity stage, decline stage, retrenchment stage
book value
the difference between the original cost of an asset and the total amount of depreciation expense; unreliable because depreciation is arbitrary and some assets have no book value
external legitimacy
the extent to which a small business is taken for granted, accepted, or treated a viable by organizations or people outside the small business or owner's family
strategy
the idea and actions that explain how a firm will make its profit; all businesses have a strategy that defines your customers and competition
core competencies
the main work of a firm in a particular line of business; skills all competitors have
conversion rate
the measure of how many visitors are actually willing to make a commitment to the product or service that is bring promoted
prototype
the name given to the first model of a product or service; make to prove aspects of the idea and are seen as the first step along the path of product/service creation (minimum viable product)
competitive advantage
the particular way you implement your customer's benefits that keeps your firm ahead of other firms in your industry or market
due diligence
the process of investigating a business to determine its value and potential for investment of buying a business
buyouts
the purchase of substantially all of an existing business
earnings multiple
the ratio fo the value of a firm to its annual earnings; firm value divided by actual or expected annual earnings
takeover
the seizing of control of a business by purchasing its stock to be able to select the board of directors
growth stage
the stage where customer purchases increase at a dramatic rate
decline stage
the stage where sales and profits begin a falling trend
churn
the turnover rate for your customers- the percentage of customers you typically lose after their first purchase from you (want to minimize it)
distinctive competencies
those features, benefits, or aspects of your business that are unique to your firm, or more strongly identified with your firm than with your competitors
differentiation strategy
type of generic strategy aimed at clarifying how one product is unlike another in a mass market; show how your firm offers some combination of value benefits that is different from others