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