Entrepreneurship Final

What is a skills profile and what is it used for?

* A skills profile is a chart that depicts the most important skills that are needed and where skills gaps exist in a new firm. * The idea is to see whether the skills that are needed to launch a firm are adequately covered by the members of the new venture team, or whether skills gaps exist that need to be filled. Also, it shows how current skills gaps are being dealt with.

When is franchising appropriate (from the business owner's point of view)? Provide an example of when franchising is appropriate and when it is inappropriate

* Franchising is most appropriate when a firm has a strong or potentially strong trademark, a well-designed business method, and a desire to grow. * In some instances franchising is not appropriate.

What is the difference between a heterogeneous and a homogeneous founding team? Which type of team has the advantage?

* Heterogeneous founding teams are diverse in terms of their abilities and experiences. Homogeneous founding teams are very similar on the same dimensions. * Heterogeneous teams typically have the advantage. The members of heterogeneous teams are likely to have different points of view about technology, hiring, decisions, competitive tactics, and other important activities. These different points of view are likely to generate debate and constructive conflict among the founders, reducing the likelihood that decisions will be made in haste or without the airing of alternative points of view.

Describe the term "liability of newness" and suggest several ways that a new venture can overcome this handicap.

* New ventures have a high propensity to fail. * The high failure rate is due in part to liabilities of newness, which refers to the fact that new companies often falter because the people involved can't adjust fast enough to their new roles and because the firm lacks a track record of success. * Ways a new venture can overcome this: * Assembling a talented and experienced management team is one path that firms can take to overcome these limitations. * Firms able to persuade high-quality individuals to join them as directors or advisors quickly gain legitimacy with a variety of people, such as some of those working inside the venture as well as some outside the venture (e.g. suppliers, customers, and investors). * Attending entrepreneurship-focused workshops and events, such as Startup Weekend, hackathons, boot camps, and so on.

What is a copyright? What is protected by a copyright?

A copyright is a form of intellectual property protection that grants to the owner of a work of authorship the legal right to determine how the work is used and to obtain the economic benefits from the work. A work does not have to have artistic merit to be eligible for copyright protection. As a result, things such as operating manuals and sales brochures are eligible for copyright protection. Protected by a copyright: * Literary works * Literary works * Pantomimes and choreographic works * Musical compositions * Dramatic works * Pictorial, graphic, and sculptural works

Describe what a joint venture is. Identify the types of joint ventures.

A joint venture is an entity created when two or more firms pool a portion of their resources to create a separate, jointly owned organization. The common reason to form a joint venture is to gain access to a foreign market. The types of joint ventures are a scale joint venture and link joint venture. A scale joint venture is when partners collaborate at a single point in the value chain to gain economies of scale in production or distribution. The link joint venture is the positions of the partners help each other access links in the value chain.

Describe the concept of guerrilla marketing. Why is guerrilla marketing particularly suitable for entrepreneurial firms?

A low budget approach of marketing that relies on ingenuity. Cleverness, ad surprise rather than traditional techniques. The point is to create awareness of a firm am dots products, often in unconventional and memorable ways. It suitable for entrepreneurs that are on a tight budget but have creativity, enthusiasm, and passion to draw from.

Identify and briefly describe the three types of patents.

A patent is a grant from the federal government conferring the rights to exclude others from making, selling, or using an invention for the term of the patent. Utility- new or useful process, machine, manufacturer, or composition of material or any new and useful improvement thereof. Duration:20 years from the date of the original application. Design- Invention of new, original, and ornamental design for manufactured products. Duration:14 years from the date of the original application. Plant- Any new varieties of plants that can be reproduced asexually. Duration: 20 years from the date of the original application.

What is a trademark? Why are trademarks important?

A trademark is any word, name, symbol, or device used to identify the source or origin of products or services and to distinguish those product or services from others. Trademarks also provide consumers with useful information. • For example, consumers know what to expect when they see a Macy's store. • Think how confusing it would be if any retail store could use the name Macy's.

Explain the difference between internal and external growth strategies. Provide examples of each.

Internal: Involve efforts taken within the firm itself, such as new product development, other product-related strategies, and international expansion Ex: New product development, product related strategies, and international expansion External: Rely on establishing relationships with third parties such as mergers, acquisitions, strategic alliances, joint ventures, licensing, and franchising

Describe the internal growth strategy of new product development. Why is it a competitive necessity in some industries that entrepreneurial firms focus on this form of growth?

Involves the creation and sale of new products (or services)as a means of increasing firm revenues. -In many fast-paced industries, new product development is a competitive necessity because product are rapidly changing so companies must be up to date with the markets' needs.

What is a brand? How does a new firm develop a brand?

Is the set of attributes-positive-or negative that people associate with a company. These attributes can be positive such as trustworthy, innovative, dependable. Or they can be negative such as arrogant, unreliable. The customer loyalty a creates through its brand is one of its most valuable assets. A new company can create a brand by first selecting a name. Create a strong personality for the firm, designed to to the chosen target market. It must create value to the customers. One can build their brand through advertising, public relations, sponsorships, and etc.

Describe what licensing is. What type of intellectual property can be licensed? Identify the two types of licensing pursued by entrepreneurial firms.

Licensing is a company granting permission to use a specific form of its intellectual property under clearly defined conditions. Virtually any intellectual property a company owns that is protected by a patent, trademark, or copyright can be licensed to a third party. The two types of licensing pursued by entrepreneurial firms are technology, merchandise, and character licensing. Technology licensing: the licensing of proprietary technology that the licensor typically controls by virtue of a utility patent. Merchandise and character licensing: licensing of a recognized trademark or brand that the licensor typically controls through a trademark or copyright.

Describe what a product line extension strategy is. What are the advantages of this strategy? Describe a company you are familiar with that utilizes a product line extension growth strategy.

Making additional variations of a product so it will appeal to a broader range of clientele. It is an advantage because it allows the a firm to take one product and extend it into several products without incurring significant additional development expense. It is also a way that companies can leverage their core competencies in related areas.

What is the purpose of market segmentation? How are markets typically segmented? Can a company segment its market on more than one dimension?

Market Segmentation: • Involves studying a firm's industry and determining the different target markets in that industry. • Markets can be segmented in a number of different ways, including: - Product type. - Geography (city, state, region). - Demographic variables.

Define the term "market leadership." Why do firms work hard to obtain market leadership?

Market leadership occurs when a firm holds the number one or the number two position in an industry or niche market in terms of sales volume. Firms work hard to obtain market leadership because larger businesses usually have more inclunce and power over smaller firms.

Do most firms want to grow or are they reluctant to grow? What are the advantages of growth?

Most firms are reluctant to grow because not all businesses have the potential to be aggressive growth firms or they could grow too fast. Also business success doesn't always scale. The advantages of growth are: reducing competition, Gaining access to proprietary products or services, Gaining access to new products and markets, Obtaining access to technical expertise, Gaining access to an established brand name, Economies of scale, and Diversification of business risk. Also incremental even-paced growth, Provides maximum control, Preserves organizational culture, Encourages internal entrepreneurship, Allows firms to promote from within

What is intellectual property? Why is it called "intellectual" property? Why is intellectual property such an important issue for entrepreneurial firms?

a. Intellectual property is any product of human intellect that is intangible but has value in the marketplace. b. It is called intellectual property because it is the product of human imagination, creativity, and inventiveness c. Intellectual property is such an important issue for entrepreneurial firms because firms need to be able to legally protect their property

What is the organizational life cycle and why is it important?

a. The organizational life cycle is a cycle of stages that a majority of businesses go through. These stages include introduction, early growth, continuous growth, maturity, and decline. It is important for an entrepreneur to be familiar with these stages, along with the unique opportunities and challenges that each stage entails.

What are the primary day-to-day challenges involved with growing a firm? Briefly describe each challenge.

a. The primary day-to-day challenges involved with growing a firm are cash flow management, price stability, quality control, and capital constraints. b. Cash flow management means a firm must carefully manage its cash on hand to make sure it maintain sufficient liquidity to meet its payroll and cover its other short-term obligations c. Price stability means being able to avoid price competition amongst existing firms by serving a different market and serving that market particularly well d. Quality control means to maintain high levels of product quality and customer service e. Capital constraints means to raise enough capital required for the firm whether through internally generated funds, through a bank, or from investors

What are the primary rules of thumb for determining whether intellectual property protection should be pursued for a particular intellectual asset?

a. The two primary rules of thumb is to 1) determine if the intellectual property in question is directly related to its competitive advantage and 2) determine whether an item has value in the marketplace

What are the primary advantages and disadvantages to establishing a franchise system (from the franchisor's point of view)?

o Advantages:Rapid low-cost market expansion, Income from franchise fees and royalties, Franchisee motivation, Access to ideas and suggestions, Cost savings, Increased buying power. o Disadvantages: Profit sharing, Loss of control, Friction with franchisees, Managing growth, Differences in required business skills, Legal expenses.