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