ENT4934

Invading adjacent markets

entering a market that doesnt differ in cost structure, stakeholders, and required capabilities

Who is a serial entrepreneur

have multiple business ventures

cost leadership strategy

keep costs & prices low of broad products ex: Walmart

Lean Business Practices

lessen required capital & reduce cash outflows from the business -- renting, keeping in touch w customers, , standardizing

Focused cost leadership

narrow range of products & low prices ex: DGeneral

What is factor-driven economies

nations with little manufacturing have a lot of farming and extracting raw materials businesses

Retrenchment stage of ILC

new approaches must be made to improve business & chance of survival

Succesion

new owners from within or outside the owner family enter the business as owners & add new capital & resources that have consequences for firm processes & outcomes such as innovation, entrepreneurial orientation & growth

What is a heirs entrepreneur

people who inherit or are given a stake in the family business

What is a buyer entrepreneur

people who purchase an existing business

Resource Base Theory

possession of strategic resources provides an organization to develop a competitive advantage

Base retention

repeated customers increase profitability of existing customers more value in existing customers

Agency Problem III

shareholders & creditors

What is SME

small & medium enterprises - the international term for small business

What are the different terms for entrepreneurial small businesses

small & medium enterprises (SME) Independent small business Owner-managed firms

What is a franchisee entrepreneur

someone who buys or leases a franchise from a franchisor

Who is an entrepreneur

someone who owns a business and are self-employed

What is a founder entrepreneur

start the business whether is be new business or franchise

Forward vertical integration

supplier gets into industry

Argument against family firms

Nepotism Legacy Inheritance norms

Starting Cons

No initial name recognition Significant time & effort required Difficult to finance Lack of experience

Information asymmetry

the information gap between investor/buy & seller/startup

Corporate Governance

the reconciliation of conflicts of interest between various corporate claimholders

Family business

two or more family members exercise control

Bootstrapping

using low-cost or free techniques to minimize your cost of doing business -- no utilization of debt or equity

Resources in RBT must be

valuable rare difficult to imitate non substitutable (VRIO)

Market Share Gain

where the objective is to increase your number of customers relative to the total possible market and the competition.

What is innovation-driven economies

A large service sector providing high-end services to resident population & export

What is independent entrepreneurship

A person or group owns a for-profit business

What is the plan step of the entrepreneurial process

Getting idea to business by using part-time startups, lean business practice approaches, pilot testing, business modeling

What is efficiency-driven economies

Growing retail & wholesale sector that grows alongside business serving the needs of large industrial concerns

Franchising Pros

Having a fully developed system of doing business

Pro resources in family business

Human capital: well trained Social: connection in & outside fam Financial: use family $ to support business

Growth strategy of a lifestyle or part-time firm

- Sales of 25K or less - Stays small - Growth levels off quickly - What majority of business are

Growth strategy of a traditional small business

- Sales of 25K to 100K - Growth levels off after operations settle into a consistent money-making pattern

What is the overall growth strategy for high-performing small business

-100k to 1mil - Grow at rate of 5 to 15%

imitative strategies

cloning/franchising parallel comp (local)

Agency Problem I

conflict of owners & managers

Backwards vertical integration

Buyer gets into the industry

Agency Problem II

Controlling Family shareholders & noncontrolling shareholders

What is CSI entrepreneurship

Corporate Social Independent

Growth Stage of ILC

Customer purchases increase at a dramatic rate

Starting Pros

Do it your way Begin with a clean slate Provide different/unique products

Maturity stage of ILC

Stabilization of demand

What are the five paths to business ownership

Starting Purchasing Buying Working Inheriting

Arguments for family firms

Substitution: trust subd Human capital: transfer knowledge easier Politics: easier to maintain politics

What is social entrepreneurship

The creation of self-sustaining charitable & civic organizations, for-profit organizations that invest in charitable activities

What is the overall growth strategy for high-growth ventures?

- $1mil + - Growth rates of 25% +

What are the core principles of effectual reasoning

Affordable loss Strategic partnership Leveraging of contingencies

Bricolage

Analyzing the resources available & creating a product or service from them

Effectual Reasoning

Analyzing the resources available to create an attainable goal

market positioning

Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers

Porter's 5 Forces

Bargaining power of suppliers Bargaining power of Buyers Threat of New Entrants Threat of Substitution

What are the entry competencies

Boundary Resources Intention Exchange

What is the feel step of the entrepreneurial process

Entrepreneur has a feeling about starting a business or creating a product

Inheriting Pros

Establish Customers Immediate sales Cash Inflow

Buying Pros

Established customers immediate sales & cash inflows

Inheriting Cons

Family education Assuming family responsibilities

Agency problem IV

Family shareholders & family outsiders

What are the four steps of the entrepreneurial process

Feel Check Plan Do

Buying Cons

Finding a successful business for sale Information asymmetry

What is corporate entrepreneurship

Form of entrepreneurship that takes place in existing business around new products, services, or markets

What are the different types of entrepreneurs

Founders Franchisee Buyers Heirs

Innovation Strategies

Incremental (base on others) Pure/blue ocean

Industry Life Cycle

Intro Growth Maturity Decline Retrenchment

How can information asymmetry affect entrepreneurship

Investors will invest in legitimate firms over new businesses & investors has less information than owners so perseverance is important to earn external financing

Franchising Cons

Legal considerations

Cons resources in family business

Low human capital: few skills bc of nepotism Low social: distrust outside fam Low financial: using fam $ for own interest

What are the five Ps of entrepreneurial behavior

Passion Perseverance, Promotion/Prevention focus, Planning style Professionalization

What is the do step of the entrepreneurial process

Refining approach until successful

Decline stage of ILC

Sales & profits fall

Casual (predictive) reasoning

Setting a goal and determining the strategy & goals to attain it

What is the check step of the entrepreneurial process

Smart entrepreneurs check the likelihood or success of their idea

focused differentiation strategy

Unique products but not for everyone. ex: Anthropologie

Differentiation

Uniqueness of products for broad target ex: Nordstrom

sustainable competitive advantage

VRIO

Agency theory

When owners & managers are aligned there are few agency costs bc of low neglect, opportunism, adverse selection & moral hazard

Independent small business

a business owned by an individual or small group

Owner-managed firms

a business run by the individual who owns it

Intro stage of ILC

a few firms, small sales, customers are unaware of product offerings