7. Small Business Strategies Entrepreneurship
Perceptual Map
A graphic display which positions products, services, brands, or companies according to their scores of important strategic dimensions
Decline
A life cycle stage in which sales and profits of the firm begin a falling trend
Boom
A type of life cycle growth stage marked by a very rapid increase in sales in a relatively short time
Shake-out
A type of life cycle stage following a boom in which there is a rapid decrease in the number of firms in an industry
Growth
An industry life cycle stage in which customer purchases increase at a dramatic rate
Magic Number
The post-tax income the entrepreneur personally seeks from the business
Maturity
The third life cycle stage, marked by a stabilization of demand, with firms in the industry moving to stabilize or improve profits through cost strategies
Strategy Process
the ideas and actions that explain how a firm will make its profit
Target Market
way to know which competitors to worry about most
(5 steps)
1. As owner, what do you expect out of the business? 2. What is your product or service idea (and its industry)? 3. For your product or service, how innovative or imitative will you be? 4. Who do you plan to sell to—everyone or targeted markets? 5. Where do you plan to sell—locally, regionally, nationally, globally?
Scope
1. Knowing your market scope helps deciding where to focus sales and advertising efforts Stitch Fix & Pinterest 2. Knowing your target market
Innovative Strategy
An overall strategic approach in which a firm seeks to do something that is very different from what others in the industry are doing
Imitative Strategy
An overall strategic approach in which the entrepreneur does more or less what others are already doing
Gross Profit
Funds left over after deducting the cost of goods sold
Net Profit
The amount of money left after operating expenses are deducted from the business
Introductory
The life cycle stage in which the product or service is being invented and initially developed
Market
business term for the population of customers for your product or service
Mass Market
large portions of the population
Niche Market
narrowly defined segment of the population that is likely to share interests or concerns
Retrenchment
organizational life cycle stage in which established firms must find new approaches to improve the business and its chances for survival
Scale
size of the market