Entrepreneurship Ch.4
Disadvantages of First Mover Advantage
-high cost -you may get it wrong -have to educate customers on why they need product at all
Tradeoffs of Geographic Expansion
-requires more time/effort -company needs more infrastructure -additional transportation costs
Factors to consider for Geographic Expansion
1) Are customers similar to those in area of existing operation? 2) Vendors: Can you continue to use same vendors? 4) Distribution: Can you continue to use same distribution channels?
2 Ways opportunities are formed
1) Discovered as entrepreneurs seize gaps in knowledge/service 2) Created through innovation
Startup Growth Strategies
1) Franchising 2) Expanding Product Mix 3) Geographic Expansion
Free as a Business Model
1) Free based on multi-sided platforms 2) Freemium 3) Bait and Hook Model
Types of global entrepreneurial firms
1) Gradual Globals 2) Born Global 3) Born-again globals
Building blocks of Business Model Canvas
1) Key Partnerships 2) Key activities 3) Value propositions 4) Customer Relationships 5) Customer Segments 6) Channels 7) Key resources 8) Cost structures 9) Revenue Streams
Lean Startup Canvas
1) Problem 2) Solution 3) Value Proposition 4) Unfair Advantage 5) Customer Segments 6) Key Metrics 7) Channels 8) Cost Structure 9) Revenue Streams
How to Succeed
1) Protect competitive Advantages 2) Learn from others 3) Identify firm's strategy 4) Don't prematurely release product
Submodels of Business Model
1) Revenue Model 2) Cost Model
Marketing Lessons From Candy Crush
1) Scarcity increases desire 2) Free motivates 3) Our brains like easy 4) Candy is likable 5) Rewards keep you going (gamifying) 6) Sense of community
International Expansion Process
1) Technology Transfer 2) Technology Licensing 3) Outsourcing 4) Exporting 5) Foreign Direct Investment 6) Franchising 7) Venture Financing 8) Merger and Acquisition
Business Model Patterns
1) Unbundling 2) Long Tail 3) Multi-sided 4) Free 5) Open
Work Culture Categories
1) Values: beliefs shared by all members 2) Selection: hiring people who fit and reinforce values 3) Structure: flexible, organizational structure that changes as company matures
10x solutions
10x cheaper, faster, better
Merger and Acquisition
Buying overseas firm
Adverse Selection
Difficult for you to confirm the claimed skills of a sales rep/agent
Technology Transfer
Have a partner firm in target country product/distribute your product
Born-Again globals
Moves into international markets only because of a triggering event
Franchising
Replicable business model that brings in new revenues through royalty, franchising and rights fees
Telepresence Systems
Set of technologies that allow people to feel as if they are physically present at a location other than true location
Venture Financing
Venture Capitalist capital allowing firm to go international
Unbundling Model
a model where the business is divided into separate entities, specifically: 1) Customer Relationship 2) Product Innovation 3) Infrastructure
Revenue Model
break down of the sources of revenue that business will generate
COGS
costs of raw materials and direct labour needed to create goods
Moral Hazard
difficult to ensure agent is honouring contract
Gradual Globals
enter international markets in stages
First Mover Advantage
first or early in the market
Geographic Expansion
growth based on assumption that customers should like your product in many different locations
Open Business Model
having a community-based business with open innovation (connecting, building and operating with smart people)
Multi-sided Platforms
model that brings together two or more distinct, interdependent groups of customers and creates facilitating interactions
Born Global
plan to enter international market right from outset
Technology Licensing
secure agent to represent company abroad
Long Tail Business Model
selling few product with high sales and many products with low sales
Cost Model
shows how resources are spent to make money -includes COGS + Operating expenses
Customer Pain Points
unmet wants/needs of current customers within existing markets
Saturation Point
when new expansion within region cannibalizes existing operations